It’s the customer, stupid! Not the debtor
A critical part of modernising the receivables and debt collection processes starts with the attitude towards the person that purchased a product or service and therefore has to pay an invoice. Terminology is key, and talking about your customer rather than debtor is a great place to start when the payment is delayed for instance.
You must convert that attitude into actions and processes – while doing so, change the culture internally first. Getting the team to talk about customers is important. Remember that attitude is bigger than behaviour, so the end consumer will clearly feel the “switch” in a positive way.
A fascinating recent discussion with a prospect from a lending company turned into the main differentiator from the client’s side: the attitude towards the customer. While everyone is interested in digitisation and automation combined with AI. He said;
“I am always telling my receivables team that they are in sales, and to treat the customer with respect”
He went on to say we were the first company he had spoken to that talks the same language, that talked about putting the customer at the centre of the process.
Too many receivables and debt collection companies start from the position that the customer is trying to avoid paying. That they are a fugitive that needs catching. It’s far better to start with the assumption that the customer has simply forgotten about the bill, or is unaware the bill hasn’t been settled and work forward from there. The reality is that most receivables and collection processes are well behind in terms of the basics.
If we break the process into two basics steps;
1) making the customer aware of the debt
2) helping them settle it
We can see in both these areas the traditional collections process is way out of date.
Communications. We encounter many processes that still rely on mass mailings. With an open-rate of less than 25% email may have delivered cost savings versus letters but for many has delivered a lower awareness rate. Using multiple communication methods is vital.
Settlements. Gone are the days when bank transfer was an acceptable sole payment method. A high proportion of reminders send will be opened on a smartphone. Have you ever tried to complete a bank transfer on screen that size? The reality is that most customers at that point postpone the settlement until they can access a computer to make the transfer.
Tackling these two key areas and treating the customer like a customer not a debtor are core to delivering a better receivables experience.