While many other industries have experienced massive digital transformation, the debt collection industry in general still needs to wake up to the fact that customers’ preferences are shifting massively to digital channels and the future of collections is digital.
There are many challenges with traditional debt agencies’ processes. In addition to high operational costs, it is also fairly common for businesses to lose their long-term clients due to one bad collection call. That is why it is important to be conscious about the benefits of digital debt collection to your customer relationship, which in the future will drive your business performance.
Traditional Collections Strategies are outdated
There are many problems with traditional debt collection processes. It mostly results in notoriously bad customer experience because of aggressive chasing and the use of irrelevant archaic communication channels. Thus, the traditional debt collection process involved a tremendous amount of manual work and most of the times result in an unpleasant experience for both parties involved. That leads to negative brand reputations and worse collection rates.
Moreover, the research shows that most customers expressed a general preference for digital contact – primarily by email and followed by text message. However, they also reported that issues mainly contact them via traditional channels, nonetheless.
Digital Collections build trust with your customer
Today’s customers are seeking authentic and personalised communication, with genuine compassion and empathy. Contacting your clients via the right channel, with the right message, and at the right time allows your client to feel more in control of the interaction. They would also feel more trusted and respected, which leads to a higher trust in your company. This can make a huge impact on your business’ long-term reputation and customer retention.
In addition to personalised communication strategy, the use of digital tools can make a tremendous difference in terms of empowering your clients to pay on time. For example, online portals and payment systems will give your clients a very simple way to complete the outstanding payment.
Digital Collections generate valuable Data Insights
Digital debt collection does not only allow you to establish an open line of communication with your clients but also aggregate and analyse valuable data about their behaviours. The use of data insights will allow you to present better repayment plans to your clients and business fuelled by insights are capable to test and measure new collection strategies, manage performance, and personalise communications. As a result, it will empower your business to increase your payment recovery rates even further.
Overall, a collection strategy becomes more heavily oriented towards interactive and personalised digital communications. That allows businesses to be more in control over what and how is being said, to monitor conversations better, and increase customer experience.
Are you looking to centralize your payments, collections and reconciliation in one place? Book a demo to learn how Kolleno helps businesses to free up resources and focus on core priorities.
April 23, 2021 
