Regulation F provides some guidance to first-party and third-party collections on how to use social media as part of a digital recovery or debt collection strategy. But in recovery and collections, where even email has not yet been universally accepted or leveraged as a customer communication channel, few organizations use social media for debt collection effectively. Many of those same organizations struggle to see how they can use social media as part of a consumer preference strategy.
In this article, you'll find out how social media can be an effective consumer communication channel in your recovery / digital debt collection strategy. But first…
Why Should You Care about Social?
Because many of your customers - particularly Millennial and Gen Z - are there already and they use social media to research and communicate with a wide range of companies, including financial services companies. In fact, nearly 84% of US adults between the ages of 18-29 use social media on a daily basis.
And, many financial institutions are already using social media as a communications channel as well as a marketing / branding channel. If consumers can research and communicate with their banks and credit card companies through social media now, it only makes sense that they will expect to find you and communicate with you via social channels, too.
So, what are some ways you can integrate social media into your operations now?
1. Create social media accounts (and use them!)
Okay, you might look at this first suggestion and say…”well, duh!” but for many first and, especially, third party collections operators, an online presence isn’t a given.
The social media platform(s) you choose to use will depend on your customer demographics, as well as your ability to create content and manage the page. Like with any other customer communication channel, your organization will need to manage the channel for it to work well.
Establishing an online presence and using social media to communicate basic, customer service related messages, like your business hours, directions to your web portal, etc., gives your business a legitimacy that it might not have otherwise. It’s also a good opportunity to build your brand. And, while most consumers wouldn’t ever declare brand loyalty to a debt collection agency, your clients are certainly looking for brand loyalty from consumers.
2. Field inbound messages from consumers
If you can offer account assistance through social media direct messaging, you should.
Of course, consumers still need to verify their information before communicating about a specific debt, so if you’re not ready to take that step, you can still serve inbound messages by providing the consumer with basic customer service information, and providing them with a good phone number to call or a link to your website for more information.
3. Prepare for inevitable operational and compliance challenges
Social media is certainly a new frontier for the debt collections and recoveries market, and there will be, without a doubt, a new set of challenges in starting to communicate with consumers via social media:
- Your CRM might not be ready to allow for seamless communication via social media, which might mean creating a process by which you can update account information with the details of a social media conversation. Start by talking with your CRM provider to see what kind of options are available and if they are considering adding new capabilities or connections.
- Create robust social media policies and procedures specifically about how you use those channels to communicate with consumers. Frankly, this is good advice anytime your organization is exploring new digital collections and recovery channels, and creating comprehensive, clear policies and procedures will help you send a consistent message to both your clients, staff, and potentially, regulators. Your policies and procedures should demonstrate that you understand the permissible use of social media.
- Train your staff to understand and operate within those policies and procedures. Those who use your social media will need to be trained differently than a typical frontline agent.
- Be careful and prepare to commit to social media consumer communication. A bad social channel is arguably worse than none at all. Simply creating social media accounts and never using them will likely lead to additional consumer complaints. 42% of consumers who communicate with a company via social media expect a response within one hour, so be prepared for that turnaround time.
Erin Kerr is the Director of Content at insideARM and the chair of iA Strategy & Tech - a digital resource for collections strategy executives. She is a seasoned receivables management professional, with recent experience in digital strategy and a passion for crafting digital solutions for a better customer experience.