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Five top tips on how to improve your debt collection rate

When it comes to debt collection letters and debt settlement offers, it’s not what you read but how you read them that matters. The impact of Covid-19 and the ongoing focus on maintaining regulatory principles makes this an even greater focus. Simple changes to the tone, language and design of a letter simply demanding payment can impact significantly on its success and debt recovery rates. Here, we outlines five ways to improve your customer communications, enhancing your customer engagement and debt collection rates in the process.

1. Don’t demand, consult

Attitudes to debt have changed, with what people think about debt varying with gender, age and even location. According to  research conducted by Payplan in 2017, more than a quarter of people now believe debt is part of everyday life.

People are also able to differentiate between what they perceive as good and bad debt. Mortgages, and student loans for example are perceived as good debt whilst credit card debt less so. What’s clear is that debt is now affecting a wider demographic than ever before. This means that if you’re a debt collection business, you really must think about how you are communicating with your debtors.

Long gone are the days of firing out ever increasingly demanding letters. You must find a new tone and approach to conversing with your customers. Technology makes it easier than ever to personalise and customise letters for each debtor. But more important is the tone of the letter – it needs to be friendly and personal.

Letters should be consultative in approach and provide key information that will allow the debtor to be fully informed. If it feels like a generic debt collection template letter, they may not engage with it. If they see their name clearly mentioned and specific details about their debt, they are more likely to pay attention and take the required action. Letters should not look to highlight problems, but provide solutions to the customer on how they can deal with their debt.

A customer communications provider which can evaluate your communication challenges in detail and provide consultative insights will enable better customer communications.

2. The right way for the right audience

There are now multiple ways for a debt collection business to contact people, and different channels can be utilised and matched appropriately to different demographics and campaign budgets. Businesses need to be smart with the channels they select and ensure all avenues are being explored to communicate with people. A multi-channel approach for a communication campaign provides more opportunity to connect with customers and be successful in delivering your vital message.

More informal routes of communication such as text and WhatsApp can open-up channels of two-way communication that the traditional letter failed to achieve. SMS also allows more timely information to be sent out more regularly.

A multi-channel approach should be considered the best way forward for a debt collection business wanting to operate with today’s technology-savvy consumers. Working with a customer communications provider who can provide an integrated solution is, therefore, essential.

3. An eye for design

Equally as important to the tone and language of a letter is its look, or more importantly how it is viewed. How information is presented is crucial to ensure the reader absorbs key information. Customer response can be influenced by combining creative designs with behavioural science. Lots of research has been conducted about how the human eye reads and interprets written data. “Eye-tracking” studies, which use special trackers to monitor and measure eye movement, have revealed some incredible facts about how we read.

When reading, the human eye is continually making rapid eye movements. For English readers, the direction of reading doesn’t purely follow from left-to-right but also involves right-to-left eye movements. This rapid back and forth mechanism allows us to gather more information and helps us understand where the eyes focus and the amount of dwell time each area receives.

The human eye also sees fixed points to anchor its movements, which makes certain fixations in sentences more prominent than others. As a consequence, how you write a debt letter and where you put key information in a sentence will affect how well the reader understands what is written and therefore reacts to the communication.

At Adare SEC, our SmartDesign solution uses science, data and design to create communications which combine great design and analytics to drive results. Simple changes to the design when informed by cutting edge eye-tracking technology can have a dramatic impact on how the reader engages with the communication. Changes in colour, shapes and highlighting areas can all ensure vital information isn’t lost to the reader.

4. Track and trace your communications

With today’s technology and campaign planning, its bad customer experience for any consumer to receive the same debt recovery letter twice. Duplication of communications, chasing the wrong person, mailing to an incorrect address, or losing contact with a debtor are all issues which can be avoided by the use of smart tools which allow a business to track exactly what communications they are sending out.

Data capture tools for inbound letters also allow agencies to keep an exact digital record on file of any communications sent to them by the customer. Such tools help create and improve customer experience and alleviate the stress and headache for both parties.

5. Think outside the box


Smart marketing campaigns can create interesting and novel ways of recovering debt which hasn’t been collected for several years. Call to actions, recovery plans and alternative ways to engage a consumer can all start a relationship with a debtor that might have been thought lost.

While it may sound absurd, Black Friday deals, for example, are now as commonplace in debt collection agencies. Deals which offer debtors the opportunity to pay back discounted rates of debt all at once rather than larger amounts over time, are an alternative strategy to help people consolidate and level debts.

The key to any good debt recovery communication is the call to action. It’s crucial to make sure that the consumer sees a way in which to act and to improve their circumstances. Good customer communications should always provide a route to a solution and not just highlight the problem.

Don’t get left behind

A successful debt collection business makes sure that no debtor gets left behind. In the same way, a business with ambitions to prosper in the future needs to make sure its customer communications don’t allow it to flounder. It has never been easier to communicate with one another nor to disseminate information. Yet, some collection businesses are still lagging behind when it comes to embracing the technological communication advancements that exist.

If you want to ensure that your business is proactive in recovering debt then assessing the content, the feel, the channel and the look of your customer communications is a critical place to start and just like the letters you send out, it shouldn’t be overlooked.