Don't overlook the value of SMS as a key part of your digital recovery or debt collection strategy.
The accounts receivable management (ARM) industry tends to move slower than most when it comes to adopting new technologies. This is partly - but not entirely - due to the enormous regulation of the industry. But also, agencies must overcome the hurdle of convincing their creditor clients to adopt the same technology and to trust their agency to use it in a compliant and consumer-friendly way. The future of the ARM industry must include meeting customers where they want to be met, and that means adding more communications channels like email, interactive websites, and, yes, two-way texting.
Some companies in the ARM industry have successfully integrated outbound SMS messaging into their collections strategies. These agencies are driving calls and website traffic via SMS. Opening this channel of communication for two-way conversations with customers is key to the success of the ARM industry in 2021 and beyond. According to The Local Project, 64% of consumers are likely to have a positive perception of businesses that offer communication via text message, and unsurprisingly, 44% of consumers would prefer to push a button and initiate a conversation rather than waiting on hold for an agent. As more industries evolve to integrate two-way texting into their available communications channels, more consumers will come to expect that type of service from the ARM industry.
How can the ARM industry open the text channel to customers?
1. Recruiting and train a different type of agent
Agents will now be required to have a strong grasp of written communication, and they will have to avoid the temptation of using shorthand in their conversations with customers. They will also need the ability to carry on multiple conversations at once without getting the conversations crossed. Of course, conversations with customers will play out differently than they do today, with customers having more time to consider offers, and having the ability to respond at their leisure, instead of being pressed for immediate responses over the phone. Agents will need to be patient, and agencies will have to re-evaluate their payment offer hierarchies. This might also mean re-evaluating commission structures, too.
2. Be willing to set precedents
While the new CFPB rule provides some instruction around texting, opening this channel also opens up new risks that agencies (and their third-party clients) must be willing to absorb. Developing robust policies and procedures can help agencies protect themselves from some of that risk.
3. Truly integrate technology into your strategies
This integration means ensuring letters, phone calls, emails, interactive websites, and text messages are all working together. Allowing customers to access a two-way text conversation via a letter or email will be key to the successful implementation of this channel.
Two-way texting will be a game-changer in the ARM industry, and not just by providing a boost in income. As Millennials and other tech-savvy generations increasingly comprise the majority of consumers, texting and other channels that accommodate communication preferences will no longer be "nice to have." They will be essential to survival.
Erin Kerr is the Director of Content at insideARM and the chair of iA Strategy & Tech - a conference 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.