Commercial Protection: A Case Study on Debt Recovery and Collection

Debt outbound and inbound collection can be difficult or stressful for your customers. No one wants to have money troubles, so being able to manage these conversations and find resolutions quickly that work for both your company and your customers is important for customer retention and the best collection of any arrears.

Understanding debt recovery and collection

There are various methods of debt collection and recovery. Outbound and inbound calls are the only two ways that companies can try to contact their customers or offer platforms for customers to contact their debt collection teams. This is vital for many industries where customers might get into arrears or miss payments, and it can be especially important in the finance industry, where loans and larger debt might accrue.

What is debt recovery and collection?

Debt recovery and collection is the process of retrieving arrears and overdue payments from customers. This can be especially important in the finance sector, where repayments can be larger and more daunting for customers to deal with. Whether it is a late mortgage payment, where the threat of inaction could be repossession, or simply the start of a loan repayment that needs organising, having a dedicated team can make communication between customer and company easier during sensitive or even difficult conversations.

Debt collectors employ a variety of methods to pursue repayment, such as sending letters, making phone calls, negotiating payment plans, and, in some cases, initiating legal action to recover outstanding debts. To streamline these efforts, companies are increasingly adopting debt collection software and outsourcing collection agents on behalf of the company. By instilling a strong advisory team of debt collectors, you’ll better be able to connect with your customers and ensure the right support, guidance, education, and processes are being put in place to start repayments.

The role of call centres in debt recovery

Outsourcing call centre activity for debt collection and recovery is an important step for many businesses needing assistance. Not only do we have teams of expert advisors trained in debt collection and sensitive information handling, but we also ensure that you’ve got the scalability and flexibility you need to manage call volumes and ensure that no repayment or debt is forgotten.

The benefits of BPO debt collection for finance

There are multiple benefits when it comes to outsourcing your debt collection activity. From scaling your efforts to cutting costs, there is plenty that outsourcing your debt collection can do for your finance company.

Scalability

The main benefit is your ability to scale your activity depending on your business needs. If you’re experiencing a ramp period of inbound debt call volume, an outsourcing company can assist in maintaining call volume and reducing callbacks through one-stop resolutions, including setting up repayment plans that work for all parties.

Improve customer experience

Outsourcing your debt collection can also be the best option for your customer experience. Financial trouble is a difficult, and often sensitive, situation, so you will want to make sure that you’ve got advisors on hand who can handle difficult conversations with empathy and compassion while still having your business goals in mind. This way, your customers can feel comfortable and supported in their decisions through the debt collection process, even during difficult conversations.

Having compassionate advisors with the right responses is important for the ease of conversation and getting a resolution in place, that is why we provide our advisors with 150,000 hours of training to ensure that they’re comfortable and confident in each situation.

Cut costs

Debt collection is vital for the cash flow of your business, so when your debt collection needs rise, it is also important to consider cost-effective ways of achieving great customer service and debt recovery. By outsourcing your initiatives, you’ll better be able to manage your budget for debt recovery. Setting up in-house, dedicated debt recovery teams can cost time, money, and resources as you will need the people with the right skills, as well as the technology, to achieve what you need. However, by outsourcing, you can work with a trusted debt collection partner who already has the teams and resources in place to achieve your debt recovery needs.

Key strategies for debt collection and recovery

There are some key strategies that contact centres might employ for the benefit of your debt recovery and collection initiatives. By using these tried and tested approaches, we can drive down complaints, call volume, and ensure one-stop resolutions for your customers while still getting the funds and arrears needed by your company.

Some approaches we might take include:

Proactive engagement

Proactive engagement is one strategy that not only assists with debt recovery but can also flag customers at risk of getting into arrears. In this way, you can set up reminders and follow-ups to prevent late repayments and ensure the quick and efficient repayment of your funds. Using account information, as well as geographical and socio-economic data, we can better assess accounts for risks and vulnerabilities with their funds and ensure the support is in place early to prevent debt buildup with intervening strategies and proactive resolutions.

Scripting strategies

How your advisors communicate with your customers is vital, especially when the topic is as sensitive as money and debt collection. Scripting strategies involve looking at the real-time data of scripts and how customers react in order to better create scripts that not only engage with the customer and ensure all information that is needed is collected, but that also encourages empathy and compassion through the call.

AI and technology

Technology and AI are vital in debt collection and recovery. Omnichannel support can ensure that all customer notes from any communication are readily available in their CRM account and that advisors have the history they need to better communicate and offer resolutions for your customers.

AI can also be used to better assess, interpret, and understand your customers’ frustration so that advisors can reach a better resolution that works for both your company and the customer. By using technology to understand customers’ needs, even the needs that go unsaid, our advisors can better support individual cases or escalate appropriately.

Customer education

Another approach is to include customer education. Debt, and difficulties collecting, can happen due to misinformation or a lack of financial education. Providing better customer education around money and debt, and tailoring it to individual accounts, can better help customers understand the gravity of the situation or even the next steps if they’re worried about their finances.

Debt recovery and collection excellence with Kura

At Kura, we have a history of providing excellence in debt recovery and collection. One of our clients wanted to become number one in the company for customer service through excellent complaints management while collecting payment arrears from customers. This can often be a difficult and sensitive situation for many customers, leading to higher emotions and frustrations, so it was key for us to appeal to and empathise with our customers in order to better understand their financial needs.

Our approach to resolving this was by recruiting and training a team of 30 new advisors over a one-month period to ensure they have the confidence and skills needed to be a dedicated collection team. Through training to recognise and identify opportunities for payment collection, as well as dedicating time for account reviews so that each advisor could better understand the customer and their individual needs, we were able to improve collections while maintaining a great quality customer experience.

Through this, Kura achieved £75,000 in card payment collections, with an average of 2,700 direct debits set up per month. We also achieved 14,700 positive payment outcomes, showing that our excellence in customer experience can be maintained through debt collection initiatives.

Read the full payment collection case study here, and to see our payment support and debt collection solutions, see here.