Billionaire Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Unfortunately, too many collectors don’t think about that, and as a result, they don’t do things differently. Many organizations and third-party agencies pursue short-term profits using shady tactics or approaches that damage relationships with customers. They prize results that, while financial advantageous, can be fiscally ruinous over time.
That’s because collections is a tough business, to begin with: debt collectors by virtue of their work are certainly not loved. Consumers don’t anticipate conversations or relationships with them. But this stereotype is compounded when collectors put unacceptable pressure on customers, communicate poorly, or deceive debtors.
Little do badly behaving collectors know, a good reputation is actually a critical competitive advantage. Here’s why.
Today’s collections landscape is much different from that of days gone by. No longer do consumers have a single relationship with banks. They instead carry multiple debt obligations with different providers. Debtors spend and communicate both offline and across myriad online platforms like web, mobile and social media.
This means the approach banks and third-party agencies take to collecting debts must change. They can’t rely anymore on pushy phone calls that pressure customers into a settlement. Instead, they must take a customer-centric, multi-channel approach to collections, emphasizing convenience, service and mutual respect.
Consumers expect this from online giants like Apple and Amazon. But as the rise of self-service collections portals proves, they also expect it from their credit providers. If consumers don’t receive the convenience and service they expect, they will honour other debt obligations from companies that do provide their desired experience. And with the rising cost of servicing non-performing loans, this is a delay many organizations would prefer not to endure.
Building a positive reputation a key way to ensure that consumer relationships are preserved throughout the collections and recovery process. Banks and agencies that prove they’re worth doing business withstand to benefit by collecting more from satisfied customers and achieving more settlements through mutual cooperation with debtors.
How can your organization or debt collection agency improve its reputation to collect more over time? There are a few ways to get started.
Centralize debt collection authority in your organization so that all directives, values and rules come from a single source.
Create common communication scripts that collectors can use across online and offline channels. These scripts ensure consistent communication with customers. As a result, you’ll receive consistent treatment of customers.
Use progressive pressure throughout the credit lifecycle. Not every interaction needs to have high pressure. Earlier stages of debtor delinquency can be better solved by a low-pressure, customer-oriented approach.
Provide self-service options when possible. Use a self-service portal to enable consumers to settle their own obligations on their own terms.
The others are collections and recovery best practices. Find out what they are and how to implement them for improved collections performance in this free ebook.
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