As recently as 15 years ago, consumer expectations about the debt collection experience looked starkly different than they do today. Back then, people expected debt collection communications to come as a piece of physical mail, and consumers were more likely to answer the phone for an unknown number before spam calls and call labeling and blocking became the norm. Companies who were looking to collect on a debt often used aggressive tactics, and customer satisfaction wasn’t a priority as long as some of the money owed was recovered.
Now, consumers want empathy, understanding and convenience from the companies they interact with, especially in financial services. These shifts in consumer expectations continue to spark changes in debt collection trends and have led to more businesses investing in digital strategies to better engage with consumers. Join us as we take a more in-depth look at how consumer expectations in debt collection have changed and what it means for your business.
Customer Satisfaction is a Key Debt Collection Trend
Consumers today want their problems in financial matters resolved sooner rather than later. A recent survey done by TCN on consumer expectations found that financial companies are seeing a decline in customer satisfaction. One of the main drivers of this trend is people reporting that customer service efforts aren’t solving their problems effectively. A key benchmark used in this survey looked at how often financial service businesses were able to solve customer problems on first contact.
Only 13% of survey respondents said that their problem is always solved the first time they reach out. The more someone is forced to call back or wait for a follow up, the less likely they’ll be to engage with the company moving forward. For debt collection, that means fewer payments the longer a consumer has to wait. These survey findings stem from the debt collection trend of consumers wanting to fix problems on the spot. This notion is part of the reason why self-service portals and mobile apps have become the preferred method of resolving financial matters.
One key digital debt collection strategy is offering your customers more options that are easily accessible to them. In fact, 59% of consumers in debt want more flexible payment options. If your business is trying to improve its debt collection performance, giving your customers more options will often lead to higher levels of satisfaction. The proof of this digital debt collection trend can be seen with TrueAccord. Roughly 98% of TrueAccord customers resolve their debts with self-serve options and don’t ever interact with a human in the process.
Preferred Communication Channels for Bill and Debt Notifications Have Changed
Today, there’s no shortage of ways to send customers bills and debt notifications. For many companies out there, these notifications are sent through channels that are convenient and/or familiar to them, which doesn’t always align with consumer preferences. The more in-tune businesses are with consumer preferences, the more likely their communications will be engaged with. For businesses looking to recover debt, that means better collections performance and happier customers.
Let’s walk through an example. According to the same TCN survey, 47% of consumers prefer to be contacted by email for bill and debt notifications. Around 25% of Gen Z and 22% of Millennial customers prefer to be notified by push notifications through mobile apps. Your digital debt collection strategies need to take these expectations into account to maximize engagement. Even though email was the most desired communication method, every consumer is an individual with their own preferences.
Some of the best digital debt collection strategies leverage AI and machine learning to test and uncover the best channel for every individual. TrueAccord uses its patented machine learning engine Heartbeat that learns from every customer interaction to determine the best step to take with each consumer. It’s a personalized approach to debt collection where consumer expectations and preferences are at the core of every communication. The result is collecting more from happier people.
Convenience is King in Digital Debt Collection Strategies
In financial industries like banking and debt collection, convenience has emerged as one of the most important consumer preferences. With how critical messages in these industries often are, consumers want ways to be able to easily address them so the problem doesn’t linger and cause prolonged stress. For further proof of this trend, a recent survey by the American Bankers Association showed that 55% of consumers prefer mobile banking. Only 8% of people surveyed go to a physical branch for their banking needs.
The consumer trend of wanting more convenience through self-serve options is carried through into the debt collection industry. TrueAccord, for example, has been able to honor this consumer trend with its self-service portal. It’s a low friction way consumers use to pay off debt and should be a key strategy leveraged for digital debt collection.
Based on research done by McKinsey, consumers who digitally self-serve resolve their debts at higher rates and are much more likely to pay off the debt in full. Plus, the customer satisfaction is much higher with self-service portals compared to making a payment over the phone. These trends emphasize the importance of convenience. But just don’t take it from us, here’s what a real TrueAccord customer had to say:
“Thank you for being patient and for having a portal that makes it easy to make the payment without filling out a bunch of stuff and having to make an account or something.”
Stay On Top of Consumer Expectations in Debt Collection with TrueAccord
It can be challenging to stay on top of consumer expectations in debt collection. But with the right partner, your business can improve debt collection performance while increasing customer satisfaction.
TrueAccord is a leading digital debt collection agency that’s powered by machine learning to provide a consumer-friendly experience that honors their preferences. Schedule a consultation today to learn more about how our platform can handle your delinquency needs.