Financial services companies are adding new communications channels and making significant progress towards a true omnichannel collections strategy for debt collection, but when it comes to consumer communication, does that mean that outbound calls are over? Not anytime soon.
Outbound will be with us for a while and will continue to be a key contributor to a robust omnichannel approach because consumers still want phone calls, especially for complicated conversations, says Jason Klotch, VP of Diversified Markets at TransUnion.
Want to make sure your outbound channel strategy meets consumer needs and performs as well as it could? Here are three things you need to know if you want to optimize your outbound calling strategy, improve your consumer experience, and increase right-party contacts.
Debt collection calls are limited, so contact precision is critical
Because Regulation F reduces the number of allowed outbound calls and because there are still some challenges with channels like SMS and email (more on that below), call contact precision is paramount, says Klotch.
Contact precision means calling the consumer on the best number to reach them at the time they are most likely to answer the phone. It reduces the number of calls you or your third party vendors need to make, and, according to Klotch, “improves the consumer experience,” by reducing the number of times the consumer's phone rings.
By calling consumers at the time and place they are most likely to be available, right-party contacts and liquidation should increase, and the cost to collect each account should decrease.
Call branding can help you establish consumer trust immediately
It can be confusing for consumers to receive calls from a third-party about their debt, but working with partners who use branded call displays can reduce that confusion and drive self-service and call backs. Branded call displays establish legitimacy with consumers by allowing consumers to research who is calling them before they have a conversation.
Compliance challenges still limit outbound channel competitors SMS and email
It’s a no-brainer to include texting and email in your collections & recovery strategy, whether it’s first-party collectors or third-party vendors. They are very inexpensive, especially in comparison with letters and calls, and they are a significant driver of self-service. Plus, consumers typically prefer these less invasive contact methods.
Nevertheless, many consumers still prefer calls for complicated questions. Plus, even though Regulation F provides some guidance around SMS and email for debt collection, there are still some complications and confusion regarding compliance for SMS and email that keep those channels from supplanting outbound, Klotch says.
Hurdles to using these channels to contact your customers about a debt, especially for third-party agencies, include:
- Misconceptions about consent, especially related to using text messages to reach customers about a debt.
- Major text message platforms and cell phone carriers have prohibited text messages about debt.
- Getting a collections & recovery email program up and running can be challenging. Check out our article How to Create an Email-First Digital Debt Recovery / Collection Strategy That Drives Revenue for more information about the challenges of an email collections & recovery strategy
Risk appetite and IT infrastructure will determine whether or not text messages or emails play a significant role in your debt collection strategy. And those channels are "necessities in the market," Klotch adds, but consumers still want phone calls.
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