Jun 2021 | General | Collections
By Posted by Bartłomiej Staszewski

Bartlomiej Staszewski, Senior Global Consultant at Experian, discusses the importance of truly understanding your customer’s circumstances before setting a collections strategy

Why would you place emphasis on customer experience in a collections cycle? Well, if your business truly understands its customers and may want to retain them for the future, there is no reason why not.

Attendees of this year’s Global Debt Collections & Recovery Forum reflected upon the unpredictability that Covid-19 has caused in economies across EMEA.

People who had never experienced financial difficulty before were unexpectedly dealing with the effects of unemployment, while conditions for businesses in many industries quickly became highly volatile.

In years gone past, collections departments would have had a simple status that labelled customers as either good or bad and treated them accordingly. But the pandemic has demonstrated that this is too simplistic.

Enriched data

At the conference, we heard from organisations using advanced segmentation and faring much better than their competitors.

For consumers, Open Banking combined with bureau data provides a richer understanding of personal finances. For example, who is experiencing a temporary loss of earnings, and what period would be reasonable for them to make repayments?

Business information can be supplemented with public registries and data from the internet, including notifications about the company’s board and posts on forums to create a more sophisticated view.

Armed with the best possible information, these organisations can decide upon the next best actions and the appropriate channels for their customers.

There will be customers who need to be accelerated through the collections process, while there will be others who may be longstanding partners who are experiencing temporary problems.

By handling a collections process with the knowledge of their financial situation and allowing them to choose their repayment pathway, there is no need to damage the relationship with the customer to the point they will not return in the future.

Indeed, it’s logical that a long-term customer will experience difficulties at some point in their time working with you.

At the conference, the most effective businesses I spoke to were using insights from data to understand ‘why’ before setting them on the right collections journey.

This improved customer experience, even in the collections cycle, provides them with the opportunity to maintain the relationship and keep customers in the long term.