Many in the collection business have fallen on bad times. For some, it’s the first time they’ve been in this position, and they’re looking to lenders for collaborative solutions to help manage their debt.

By tailoring collection efforts to each consumer with the most convenient and respectful options, innovative organizations can reach a greater level of recovery success, reduce costs and, in the process, grow customer loyalty.

Traditionally, this has meant using predictive dialers and training phone collection representatives to be friendly and accommodating. But technological advances have produced a much different consumer. Answering machines and caller ID provide convenient buffers to telephone collection efforts.

Meanwhile, the number of U.S. residential landlines has declined for years as more households switch to cell phones as their primary phone. Today, 12 million U.S. households have mobile-only phone service according to telecom industry expert SNL Kagan, which expects that number to more than double to 26 million by 2012.

Add to this the rise and ease of online banking, e-mail and texting as increasingly preferred modes of communication – along with escalating pressure to comply with consumer protection regulations – and it’s easy to see why we need to become more nimble, flexible, customer-focused and open to changing the way things have always been done.

In response to these evolving consumer demands for choice and a growing aversion to traditional collection methods, a large number of collection organizations have begun to explore alternative contact channels to reach consumers.

But how do you know which channel – e-mail, texting or SMS, web self-service, personalized voice messages or others – will work best for your own customers? As you begin to ponder your options for alternative contact channels, here are some important points to consider: \

Understand the Benefits and Costs

We know that it’s not efficient or cost-effective to deploy technology for technology’s sake. Each of the available options come with a different set of benefits and can range in implementation and operating costs. It’s critical that you create a strategy with consistent and reliable mechanisms to track the costs of strategy and connect those costs to the true benefits.

Test Each Option

While the concept of Champion/Challenger strategy testing isn’t new, today’s economy warrants a closer look at each contact channel to determine the mix that works best for each of your segments or customers.

Using a sample segment, conduct a test of the options you believe might be most successful in achieving your collections goals. Then, carefully track the successes and challenges of each channel to learn which strategies and technology are most effective. This critical step will help you understand the value of new strategies, provide data for any needed improvements to your collection approaches and enable you to modify your strategy based on changes in your customers’ behaviors.

Avoid Message Overload

While customers like choice, they don’t like being bombarded with messages. To a customer, over-communication feels like harassment and may even be illegal.

If you decide to deploy more than one of the available contact options, make sure your systems and processes are integrated to provide an overall view of the number of contacts that have been made over time and by which channel. Differentiating each customer’s needs by clearly defining tailored treatment strategies will be an important key to success.

Partner With An Expert

There are experts that can help you define your comprehensive debt strategy. Using rigorous ROI analyses, pilot programs and integrated results reporting, these companies can help you best determine which channel(s) will work most effectively for your unique business and customer.

In addition, many partners offer bolt-on or modular services to your existing collections technology to help keep your initial capital outlays low. In fact, many models for contracting these services include pay-as-you-go type arrangements.

By following these steps, you leverage technology and processes that will help your organization automate operations and, at the same time, optimize treatment strategies to drive cost savings and maximize efficiencies. In the end, your customers will remember a company that cared about their needs during one of their most challenging economic times.

Paul Gallucci is the collections offering manager at CGI Technologies and Solutions. He has management consulting expertise in the areas of business process automation, process improvement and the implementation of effective practices within the banking and investments industry.


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