When it comes to debt collecting, it’s incredibly important to have a clear understanding of the people from whom you are attempting to collect. Everyone has a unique set of personal values and experiences which makes it important for agencies to locate methods that works for everyone. While this can be one of the most difficult tasks of collecting, it can be made easier by examining the differences between generations: Baby Boomers, Generation X, Millennials and Generation Z.
Begin by asking yourself the following questions:
- What is their financial situation?
- How familiar are they with updated technology?
- How do they prefer to communicate?
Of course, not all members of a generation will perfectly fit these definitions. However, establishing a general idea of how they behave could lead you to finding the most effective practices throughout the phases of collections.
Born between 1946 and 1964, Baby boomers are perhaps in the strongest financial positions compared to other generations. Their strong communication skills and work ethic suggest that this group is more likely to pay off their monthly balances. Additionally, many members of this generation are currently paying off their mortgage loans, giving them more financial liberty than they have had in the past.
Though they have been present for the rise of modern technology, most Baby Boomers prefer traditional methods of communication including physical letters and telephone calls. However, a select group of members have adopted more modern means of paying bills such as through online payment portals.
Born between 1965 and 1980, many members of this generation were buying new homes when the market crashed in 2008. Combined with their credit card debt, many Gen Xers are incredibly skeptical of institutions, making these members more difficult to collect from than baby boomers.
Like baby boomers, Gen Xers have been front and center for the modern shift of communication methods, giving them diverse communication preferences. While traditional practices remain effective, they prefer being contacted through email or cell phones.
Millennials and Generation Z
Millennials, also know as Generation Y, were born between 1981 and 1996. Millennials are the most indebted generation ever, as many have massive amounts of credit card debt and student loans. In addition, this generation is the most difficult generation to reach, as they stray away from traditional means of communication. This young generation prefers to be reached through email and text messaging.
Millennials, along with Generation Z who is just now entering adulthood, often require guidance and clear communication to see successful collection results. Millennials and Gen Z'ers place more emphasis on relationships than other generations, making collectors who also serve as financial counselors more successful.
Understanding the differences in mindsets, financial literacy, and communication preferences is crucial to establishing a successful collection process.
Looking for assistance in collecting unpaid debt or establishing the best collection strategy for your company? Account Resolution Team can help. Drop us a line to get started.