The effects of the pandemic seem to have worn off on a lot of industries as things have started to stabilize. However, some industries, like debt collection, are still struggling to get back on track. The increased financial crisis caused during the pandemic has caused a severe strain on the debt collection industry. Now, debt collection services need to find innovative methods to collect debts from debtors.
Here are some success tips to improve your debt collection process post-pandemic.
Collect data to identify the vulnerable debtors
Many late payments occurring after the pandemic primarily have the same reason. Many people have either lost their jobs or have got a pay cut. These factors have increased the number of BNPL borrowing. These are not typical reasons, and digital debt collection agencies need to identify and separate such debtors from others. Treat them as low-risk customers affected by situations who will likely pay up as soon as things get better.
Identify the best engagement strategy
Every customer is different, and you need to identify what works best for each customer. Usually, the best strategy is determined when you let the customer lead after taking an Omni channel approach in the beginning. You give customers several options to communicate, pay, and connect. It increases customer satisfaction and enhances the chances of timely collections.
Find ways to segment your customers better
Segmentation of your customers is crucial for debt collection strategies to work. To know your customers better, you need to work on your pre-delinquency, payment, and post-payment protection segmentation. Learning more about each segment will help you make better decisions regarding debt collection.
Create data-driven strategies
Optimizing the collection process is crucial to making the overall customer experience better. It is also essential to increase the collection amount. We can only achieve optimizations by collecting the correct data and analyzing it properly using various advanced technological and analytical tools.
In the early stage of collection, the focus is to optimize the recess so that the accounts don’t turn into high-risk ones. In the late stage of collection, the focus is on forbearance and debt resolution. Hence, each stage requires different types of optimization for better results. You need to create strategies driven by data for every step of the collection process.
Review your operations
It is not enough to make policies and strategies and let things work out for themselves. After creating policies and procedures, you need to set up a comprehensive review mechanism in your business to review all important factors, including people, policy strategies, tools, etc.
Doing so will help you determine what is missing and how you can improve for the next cycle of collections. It also lets you find out what works well and doesn’t need to be changed.
DebtCo is the only all-service digital collection company you need for your payment collection woes. We have developed an innovative digital debt collection platform that can take care of all your collection problems, regardless of your industry. You can reach out to us at 01376 800 592 or request a meeting to know more.