Transforming Your Debt Collection Strategy with a Customer-Centric Approach
When it comes to debt collection, the traditional focus has been on recovering delinquent accounts with a one-size-fits-all collection strategy. However, the landscape of debt collection is evolving, and collection agencies and creditors are recognizing the value of adopting a customer-centric approach. This shift is not just about being more empathetic to Consumers; it can also lead to improved debt recovery rates and member retention.
Here’s how your credit union can improve debt collection by embracing this customer-centric approach:
Fostering Financial FreedomⓇ
The foundation of a customer-centric approach is understanding that Consumers are individuals facing financial difficulties. By taking the time to understand their situation, your employees can then educate the Consumer on the options available to resolve their account. At ConServe, we call this Fostering Financial FreedomⓇ®. Our track record of success stems from our belief that Consumers need understanding, guidance, and a plan for achieving financial freedom. Most importantly, they deserve to be treated with dignity, integrity, and respect. This type of empathetic philosophy can lead to debtors feeling more comfortable discussing their issues and increase their willingness to resolve their debt.
Train Employees on Communication Techniques
Effective communication is key to a successful customer-centric approach. Train your employees to always be respectful and courteous when discussing an overdue account with a Consumer. Delivering clear and transparent communication helps build trust and encourages Consumers to work with you to find a solution. Your employees truly are the difference between a good and great collections call. They are the face of your organization, and it is their responsibility to bring your mission, vision, and values to life with every customer interaction.
Focusing on Financial Literacy
Many Consumers may not fully understand their financial situation or how to manage their debt. Offering educational resources and access to financial counseling can be a valuable part of a customer-centric approach. These efforts not only help improve financial literacy in general but can also help change future behavior, all while positioning your credit union as a great resource.
Compliance and Ethics
A customer-centric approach should always be conducted in compliance with all industry laws and regulations. Ongoing training for your employees around collection techniques, listening skills, and compliance with applicable regulations regarding privacy and confidentiality (e.g., Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), Personal Privacy Act of 1974, Gramm Leach Bliley Act (GLBA), and Family Educational Rights and Privacy Act (FERPA)) can all help contribute to a better customer experience.
Conclusion
Adopting a customer-centric approach when collecting will be a mutually beneficial strategy. By understanding your Consumers, offering financial literacy resources, and maintaining compliant and ethical practices, you will not only improve your chances of debt recovery but also strengthen your credit union’s member retention.
At ConServe, we’re dedicated to developing win-win strategies for both our Clients and their Consumers. Our Debt Counselors are real-time problem solvers, dedicated to helping Consumers find solutions that preserve a sense of control and individual self-esteem. Schedule a meeting with our collection experts today to learn how ConServe can help your members achieve financial freedom and optimize your returns.
Source: https://www.experian.com/blogs/insights/2018/03/improving-debt-collection-process-consumers/
