In debt collection, the more friction consumers run into when trying to make a repayment, the less likely they are to follow through. For a long time, the debt collection industry has faced engagement hurdles like not using digital channels or forcing consumers to call in directly to make a payment. However, when a collector makes the payment process easier and more approachable, it’s common for their recovery rates to improve.
The process of reducing consumer friction might seem daunting at first, but we’ve curated three strategies your business can put into practice to get started. Ready to take a closer look?
1. Practice Positive Debt Collection Messaging and Tone
Many traditional debt collection messages often rely on penalties or aggression to spark action. For many consumers, this creates a level of emotional friction that they want to avoid. In general, people are more likely to follow through with a repayment if they see a direct benefit. For example, let’s say that a consumer is behind on their credit card account and compare these two approaches:
- Traditional messaging: Your balance is past due, please make a payment or a late fee will be applied and we’ll take further action.
- Positive messaging: We want to help you pay your balance and get your account back in good standing today.
Instead of leading with a consequence that puts extra pressure on the consumer, empathetic and collaborative messaging makes it easier to take the next step. The positive message also clearly communicates a benefit, which can help reduce friction and the initial burst of apprehension consumers feel when they first see a debt collection message.
2. Offer Self-Service Through an Omnichannel Debt Collection Strategy
More consumers than ever before prefer to be contacted through digital channels. For collectors that are only using direct mail or phone calls, this means they could be creating additional friction to the process. When you reach out to a consumer on their preferred channel, they’re much more likely to engage with your message. Plus, digital channels have the ability to include links or buttons to a self-service portal.
By having a button or link consumers can click to submit payment on their terms, your collection strategy is reducing friction. Self-service takes less steps than following instructions on a letter or going through an interaction with a human agent on the phone.
It’s also important for omnichannel collection messages and self-service options to be quick. The goal is to require the least amount of “actions” for a consumer to take. The user experience should be simple and self-service buttons/links should be clear and easy to see. A simple payment process also gives consumers confidence that their payments will be processed without issues.
Self-service also gives consumers the ability to make a payment at any time without adding unneeded friction with human agents since consumers can easily see all their information and take action with ease. It’s one of the reasons why roughly 98% of TrueAccord customers resolve their debts through self-service.
3. More Payment Options Matter for Consumers
For a consumer, few things cause more friction than trying to make a payment and realizing their preferred payment method isn’t accepted. It’s important for collectors (especially those using digital channels) to offer more payment options to consumers. It’s recommended to at least give consumers the option to pay by ACH and debit cards. Your business should also look into allowing digital wallets like Apple Pay and Google Pay as an option as well. Not only are more consumers preferring this method of payment, digital wallets often auto fill billing information when they’re used adding convenience.
Since mobile devices and digital wallets go-hand-in-hand, your payment experience should be optimized for mobile. Even though it takes some extra effort ensuring the user experience is seamless, an issue-free mobile experience is a must for engaging modern consumers.
TrueAccord Specializes in Low Friction & High Performance
TrueAccord is a premier omnichannel debt collection agency that puts consumers first by offering a low-friction experience that gets results. With full-lifecycle recovery solutions, our team helps your business put consumers first so that every dollar recovered makes a difference. Learn more about how you can unlock scalable and reliable performance recovery by contacting us today.