Businesses and consumers are buckling up for a bumpy economic road in 2023, but your company doesn’t have to accept that these recovery roadblocks spell inevitable losses. With the right digital communication strategy you can turn challenges into opportunities and engagement into recovered revenue.
Let’s look at the roadblocks—and uncover the opportunities.
The Roadblocks Between Your Business and Better Recovery
Delinquencies have been rising (and show no signs of slowing down). According to the latest Experian’s Ascend Market Insights report released in January 2023:
- Overall balance delinquency rates increased 6.88% in December
- 30+ day past due accounts showed a 3.94% increase month over month
- Month over month views of roll rates show 1.05% of consumer accounts rolled into higher stages of delinquency in December 2022
And looking ahead, TransUnion forecasts serious delinquency rates of 2.6% on credit cards by the end of 2023, up from 2.1% at the end of 2022.
Additionally, it’s no secret that consumer preferences have changed. It’s becoming nearly impossible to reach consumers through traditional methods like outbound calling and letters.
- 94% of unidentified calls go unanswered
- 49.5% of consumers take no action after a collections phone call
But now “going digital” isn’t enough—consumers expect self-service, a dynamically personalized experience, and continuous optimization that helps them resolve debt on their own terms and according to their own preferences.
- 46% of consumers expect to communicate through preferred channels
- 72% of consumers say they only engage with personalized communications
- 90% of customers globally expect brands or organizations to have an online self-service support portal
Turning Roadblocks into Omnichannel Opportunities
These ongoing trends could be perceived as challenges, and as a result, many businesses accept losses as a “cost of doing business”—but with the right strategy these roadblocks can actually be opportunities to drive optimization and better engagement.
If your business has been relying on only call center operations, it’s time to shift gears and move to an omnichannel approach—a more effective way of maximizing repayment and conversion rates by offering a level of service and personalization that customers have come to expect from companies in the digital age. An omnichannel strategy facilitates engagement with customers and enables them to self-serve while freeing up agents to talk to customers that need more assistance.
McKinsey found in a study of 1,000 delinquent customers that digital channels such as emails and text messaging drove higher repayment action rates vs traditional channels, like outbound calling. In some cases, traditional outreach methods elicited 18% fewer responses from customers with accounts 30 days past due who prefer digital communications.
And the benefits of communicating with consumers digitally continues:
- 65% of consumers open at least one email
- 35% click at least one link in an email
- 25% visit links after 9PM and before 8AM “presumptively inconvenient times”
- And predictions show that 61% of total interactions with a brand will be through messaging by the end of 2023
At TrueAccord, we’ve found that 96% of consumers who resolve their debt with us do so via digital self-service, without any human interaction. But don’t just take our word for it:
“This audience [consumers in debt] may have already had experiences with incessant collection phone calls, and they are used to avoiding them. I wanted to find an agency that was doing things differently. I knew that TrueAccord was using technology and digital channels in a way that other providers weren’t. What we saw was almost 25-35% better performance with TrueAccord, compared to the accounts we placed with traditional agencies.”Todd Johnsen, Senior Manager of Collections Vendors, Snap Finance
Navigate 2023’s Roadblocks with Your Roadmap to Better Recovery
While the economic landscape may seem like there’s a rocky road ahead, consumers aren’t taking an entirely negative outlook. According to TransUnion’s Consumer Pulse study, 52% of U.S. consumers said they are optimistic about their financial future during the next 12 months.
Now is the time to focus on creating a better experience and supporting consumer optimism about their road to financial health. Discover your own path to helping customers move into repayment with our new eBook, Your Roadmap to Better Recovery in 2023 – available for download now»
Ready to get started? Schedule a consultation today!