Tagged in accounts receivable management

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Customer Retention: How Great Customer Service Can Retain Past Due Customers

November 20, 2018

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As costs to acquire new customers increase, it has become even more important for businesses to retain customers, and that includes those with delinquent accounts. Going past due shouldn’t negate their future revenue potential once they’re back in good standing. But a bad collections experience can push them towards your competitors and impact your reputation. Understanding the factors that play into your customers’ satisfaction, especially during the nerve-wracking collections process, is essential for developing a customer retention strategy that’s right for you. Strengthening quality control is the perfect place to start.

Usually when people think about quality control in relation to collections, they think of regulatory compliance, but quality control goes beyond ensuring adherence to rules and regulations. It’s a commitment to providing a quality customer experience regardless of account balance or how many days past due. There are endless ways that quality control feeds into customer retention strategies, but here are a few to get you started.

  1. Change the way customers think about collections

Being in debt is a major stressor and getting a collections call is scary. Poor customer service during the collections process, like vague answers or demanding language, compounds fear and sours their impression of you, however positive it was before. Taking a financial counselor approach to resolving debt is a great way to subvert their expectations about collections. By helping consumers understand the pros and cons of different repayment options and helping them stay on track with payments, you can show your customers that caring about them is more than rhetoric. Be the helpful hand with customer care solutions that help pull consumers out from under the weight of debt and win big loyalty points.

  1. Improve your online reputation

Collection agencies and collection departments get a bad rap, especially online. When a strange number pops up on someone’s phone, they tend to look it up online before answering or they send it to voicemail. If their search results show many negative comments about rude agents and long holds, the chances of them calling you back significantly decrease. That extra time across multiple customer segments can translate into additional hits to your cash flow and compound problems for the consumer. There will always be unsatisfied customers, but having equally positive reviews about helpful, knowledgeable staff can balance out the negative ones and prompt consumers to return the call rather than ignore it.

  1. Leverage data to prevent delinquencies

A major component of quality control is data analytics. Beyond improving internal processes, data can also be used to prevent delinquencies by analyzing traits of delinquent customers. That information can then be used to proactively reach out to customers who are at risk of missing payments. A reminder call about upcoming payments adds a personal touch to your customer lifecycle and encourages the consumer to address any issues they might have in making that payment. It’s also a way to help avoid collection disputes later while also keeping your cash flow a little more predictable and steadier.

  1. Establish shared goals and expectations to improve agent performance

Customer satisfaction is inherently a qualitative measurement—are your customers happy or not? But, quality control allows you measure that satisfaction with actionable, qualitative data. The data you gather largely depends on what challenges you’re trying to address, but the options are vast. There’s call recording, call monitoring, voice capture technology, and workforce management tools that can analyze call volumes to help you better staff to manage spikes, just to name a few. How you gather that data depends on your budget. With more advanced ways of measuring satisfaction (and measuring more precisely), you can expand your definition of agent performance, reset expectations, and create a more customer-centered collections process.

  1. Discover new and meaningful training opportunities

The lessons gleaned from customer satisfaction and quality control measurements should carry over into your training program—both new hire training and refresher training. Perhaps there’s language you need to change in your scripts, or you want to pull samples of good and bad calls to set clear expectations from the outset. Maybe some of your existing agents need additional training on a specific topic to increase performance. Quality control brings those areas of improvement to light.

Debt collection is a crucial part of the customer lifecycle. High-quality service and compliance during the collections process helps retain those customers after the delinquency is resolved, using the collections process to strengthen a customer relationship rather than tarnish it.

Want to reap the benefits of quality control but not sure you can take on the extra task of managing the program yourself? Consider outsourcing your collection of accounts receivable. Whether your struggle with early-stage or late-stage collections, a revenue management partner like Windham Professionals can provide you all the benefits of high-performing quality control initiatives without breaking your budget.

 

Featured Image: Shutterstock/Olivier Le Moal
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Millennials and Debt: 5 Strategies for Accounts Receivable Management

October 22, 2018

millennials-debt-accounts-receivable-management

At 83 million, Millennials are now the largest population segment in the United States, surpassing Baby Boomers by 8 million. Born between 1981 and 1996 (ages 22-37 in 2018), this younger generation is upending the way businesses communicate with, attract, and retain Millennial customers. They’re tech savvy, crave instant gratification, and place a higher value on experience over price. Those demands carry over into the way businesses approach their collection processes, too. While existing accounts receivable management strategies like letters series and phone calls are effective when collecting from Baby Boomers and Generation X, Millennials present new challenges for collection teams.

We offer up 5 things to consider so you can collect accounts receivable more efficiently and successfully from Millennials.

  1. Tech-centered, on-demand solutions drive results

Largely prompted by a growing reliance on smartphones, most companies—and even higher education institutions—are investing in more tech-centered communications and advertising. These same principles should apply when trying to collect a debt. Enabling chat on your website, using email to send and receive requests/back up documentation are just a couple of methods to help shorten the collection cycle, build trust with Millennials, and get over that initial hurdle of making contact to discuss the past due account.

  1. Focus on relationship-based collections practices

Though more Millennials are formally educated than their predecessors, many still lack the financial literacy to manage their money properly. It’s a big reason why nearly half of all Millennials are 90 days past due on at least one of their bills.

This financial learning curve makes it difficult for them to stick to repayment plans or even to fully understand the pros/cons of each repayment option they’re presented with. Student loan repayment is a classic example. Because of this lack of financial literacy, collections representatives now need to take on a financial counselor role to help educate each consumer to ensure they understand their financial obligations, what their options are, and that they have all the information they need to make an informed decision about how to proceed.

  1. Provide effortless account management options

74% of Millennials have reported preferring self-serve options. Things like FAQs on your website, virtual interactions via chat and text, and online portals to make payments and pull account history are a few examples. There are many hypotheses related to this phenomenon. It could be that this age group reports higher levels of anxiety and stress. It could have something to do with their lack of interpersonal skills because they’re used to interacting online versus in-person. Whatever the reason, Millennials want to be in control of their account management and be able to troubleshoot and research issues on their own before calling support.

  1. Update your skip tracing process

One of the hardest parts of the collection process is tracking down consumers, but Millennials prove to be increasingly challenging. For one thing, a 2018 survey reported that 32.1% of Millennials live at home with their parents/legal guardians. Pair that with the fact that Millennials that live on their own are more likely to rent than own while almost exclusively using cell phones over landlines, and you’ll see that finding these consumers becomes extremely difficult. A typical skip tracing process will yield very little.

Being proactive at the beginning of the relationship can pay big dividends into the future.  For example, obtaining permission from consumers to communicate via text and email during the buying process helps you stay top of mind not both during the buying process and when payment is due.  When getting that permission isn’t possible, leveraging social media, switching to more advanced internet searches, and using scoring models to prioritize your efforts can garner better results.

  1. Leverage electronic reminders

Though this is technically related to #1, it’s an easy win that’s often overlooked. Pairing Millennials’ love of technology with their lack of financial management skills, including electronic reminders—particularly text/SMS—in your communication toolbox ensures payments are received on time. It also prompts consumers to be more proactive and reach out to you if issues arise. This means less time following up on missed payments while creating more predicable cash flow. Just make sure you have the proper authorizations in place to communicate via text and email.

But this same technology can be leveraged in other ways once the consumer is back in good standing, such as discount notifications and new product announcements.

Overcoming these challenges requires some service flexibility, a commitment to technology-driven communication, and an emphasis on financial literacy. Making the changes that appeal to Millennials now will help prepare companies for Generation Y, who are more tech-focused and struggle even more with money management as they enter the workforce, build credit, take control of their finances, and continue to redefine accounts receivable collection.

Past due A/R dragging down your bottom line? Learn more about Windham’s accounts receivable management solutions.

Featured Image: Shutterstock/GaudiLab

 

 

 

 

delinquency-root-cause-analysis

4 Reasons Why Delinquency Root Cause Analysis Matters

August 15, 2018

delinquency-root-cause-analysis

Most companies are quick to resolve payment issues on a case-by-case basis but solving these issues more holistically through delinquency root cause analysis is more effective and efficient in the long-run. This proactive approach to accounts receivable management isolates the most common delinquency factors, so businesses can take the necessary steps in resolving them. While delinquency root cause analysis solves some of your immediate accounts receivable issues, it can also improve other crucial areas of your business, like customer satisfaction and resource allocation.

  1. Solve billing issues for good

You can’t control whether a customer has the funds to pay you, but you can address internally-driven accounts receivable management issues that impede speedy repayment like late bills, unclear terms, or hard-to-read invoices. These simple but often overlooked factors are very common and often cited by customers. These internal issues can push your bill to the bottom of a customer’s to do list and decrease your wallet share, especially if resolution requires a call to your customer service department. It’s simple, really: The easier you make it for customers to understand what they owe and when it’s due, the more likely they are to pay you back on-time and in full.

  1. Improve Customer Satisfaction Levels

Once your delinquency troubles are remedied, you can begin focusing on other relationship-building initiatives for your customers. The process it takes to discover and implement the changes discussed in #1 can hold more value for you than just its immediate revenue outcomes. To uncover the friction points impeding payment, most companies conduct customer satisfaction surveys and leverage technology to identify patterns in customer speech and behavior, like their most frequently asked questions. As you learn more about your customers, you’ll discover more than just what it takes to resolve payments quicker.  You’ll better understand the demographic makeup of your customer base and what attributes matter most to keep them happy, which you can use to improve your offerings and service performance.

  1. Increase Growth

When you take the time to analyze and address customer issues, you’re making an investment in growing your business. The short-term goal may be to get more money in your pocket quicker, but it requires a long-term companion goal of improving customer loyalty. The more satisfied a customer is with your products and services, the more likely they are to pay their bill or recommend you to friends and family. Reoccurring billing confusion and long hold times do not beget loyalty but demonstrating that you understand the customer’s viewpoint, respect their time, and are actively trying to resolve their issue quickly and permanently does.

  1. Reduce Operational Costs

Tracking down payments can be a major drain on your personnel and answering the same invoice questions can slow down your customer service center. Reducing the number of delinquencies in a long-term, strategic manner increases efficiency while reducing spend in some operational areas over time. This frees up cash to invest in other areas of your business, like multi-channel support to drive even higher customer satisfaction or marketing to acquire new customers. It’s one of the reasons why this approach is recommended by forward-thinking first party outsourcing vendors and customer service agencies.

If you’re still trying to cure issues on a case-by-case basis, you could be wasting a lot of time and resources. Figuring out that’s preventing on-time payments is only one use of delinquency root cause analysis. This process is a great starting point for building a culture of continuous improvement for your organization. By taking advantage of delinquency root cause analysis, you’re able to learn more about reoccurring issues and quickly identify the most effective and impactful remedies for your business’ and customers’ unique needs.

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