Digital channels for debt collection agencies

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3 Ways Debt Collection Agencies Can Use Digital Channels


When communicating something as serious as debt, you might think paper is the only way to go – and often, you’d be right. But here are three creative ways debt collection agencies can use digital communications alongside mail to cut costs, improve response rates and reduce DSO.

1: Email first, send paper later. Result: lower mailing costs.

When communicating with customers about debt, you want to show them they are valued and respected – and for them to take the matter seriously. Generally, that’s something only paper can do.

But even when it’s obvious you’ll need to send most customers a physical letter, adding a digital stream can help to improve your targeting and reduce costs.

After all, while many would prefer to receive transactional communications by mail, plenty are happy receiving such communications over email. A report produced as part of the Keep Me Posted Campaign found that while 80% of adults age 65 and over preferred postal communications, only 36% of 15 to 24-year olds preferred physical mail.

But even if 80% of your audience prefer paper, emailing first can save you the cost of writing to the 20% who don’t.

2: Prompt with letter, remind by digital. Result: better response rates.

In debt collection, the implied seriousness of a paper communication is a powerful response driver. But even though they’ve called and negotiated a payment date, many customers will then forget, or otherwise not stick to agreed timelines.

Digital reminders can help you to reduce the number of missed payment dates. By adding email and SMS into a traditional, offline debt collection process, you can add timely, less formal reminders that result in better payment outcomes.

Sending your debtor a gentle reminder that you haven’t forgotten your arrangement is an easy, effective and inexpensive way to improve payment reliability.

3: Use intelligent invoice reminders

With traditional, paper-based invoicing, there is often no way to know if an invoice has been processed until the due date. But what if you could see whether or not someone has opened and reacted to your invoice before payment falls due?

For some time, marketers have been tracking open and click-through rates to better understand customer buying cycles. And exactly the same principles apply to digital invoicing.

If you send a digital invoice, you can see if, and when, it’s opened. This means that if it isn’t opened for some time, you can send a second copy – and default to paper if necessary – effectively chasing the payment before it becomes late.

Importantly, if the reminder email and fall back letter are activated as part of a pre-agreed system logic, this whole process can be completely automatic. The result is a decrease in DSO, without any extra pressure on your credit control team.

The best of both worlds

Debt-collection is a serious business, and it needs a serious form of communication as a result. Paper mail will likely always be the main part of debt communications with its implied seriousness, and natural ability to generate a response.

Paper also is more likely to drive customers to channels such as phone (and away from one-way digital channels), allowing for deeper discussions of repayment plans.

But by combining paper with digital communications, you can enhance your mail and achieve better outcomes, while reducing costs.

If you’re interested in making the most of a multichannel mail approach – and discovering the many other benefits it can offer – we’re always happy to chat. Please feel free to download our eBook ‘Customer communications: using paper and digital together’.