In the debt collection industry, customer retention is a key component to measuring success. For example, a bad collections experience can push debtors towards competitors and even affect your reputation as an agency. However, in many cases collection agencies are subconsciously viewed by the debtor as an extension of the client’s business. This means that any opinions or emotions the debtor develops towards your agency are often associated with the client’s business. So why is customer retention important to the collections industry?
Due to unprecedented unemployment levels caused by the COVID-19 pandemic, delinquency rates are at an all-time high, and many Americans are experiencing debt for the first time. Now more than ever before, collection agencies and financial institutions can reimagine the customer experience as they begin to collect upon these unresolved accounts, starting with their collection approach.
Historically, the typical collections customer’s credit history is filled with negative records of unsteady employment, bankruptcy filings, previous collections records, liens, and layers of debt. However, due to the current economic landscape, this isn’t profile is becoming less common. In fact, it reiterates the idea that collection strategies are not fit-for-all, and emphasizes the need for personalized collection methods.
For example, agencies can substitute aggressive collection methods with a customer-focused strategy. By leveraging personalized collection methods for each individual debtor, agents are given the opportunity to display empathy, build relationships, establish loyalty, and overall provide a quality customer experience. Because customers are much more likely to stick around after a pleasant experience, this also positively impacts the collection rate. For example, if a debtor is approached by an agent who shows empathy instead of aggression, the debtor is much more likely to converse with the agent, and eventually pay their debt.
In the end, the key to customer retention is communication and customer service. Helping your customers understand their debts and payment options while showing discipline will prove beneficial to preserving both your clients and relationships.
For more information on how Account Resolution Team can help YOU get your money, call 423-586-7613 or visit www.accountresolutionteam.com