The rise of customer-focused collections
Achieving the best customer outcomes requires changes to business structure and staff training, attention to detail and intelligent use of data.
Author: Natalie Tate, Head of Agency Performance, Quality & Delivery at TDX Group (an Equifax company).
Type of debt is irrelevant when it comes to customer treatment – or at least it should be. While utilities and telecoms debts fall under different regulations to financial services, best practice in dealing with indebted individuals doesn’t change.
At a customer level, affordability, vulnerability and disputes don’t change according to debt type. Getting it right at challenging times creates loyal customers and advocates for your brand.
Collections isn’t about meeting a minimum standard. We must all set standards that exceed the Financial Conduct Authority expectations, and should be explicit about what we expect agencies to achieve: from business structure to agent training and call content. Their focus needs to be on driving the fair customer outcomes.
There are undoubtedly challenges as the industry consolidates its customer-focused approach. The skillset of an ideal agent has changed significantly, as have training requirements. A decade ago, debt negotiation skills were paramount; now we need agents to listen for triggers and devise the right treatment plan. They need to have very difficult conversations with consumers about life events such as bereavement, divorce and mental health, which is a huge responsibility for any agent to have to manage. This means that the old patterns of short tenure, minimum wage, low-skilled call centre workers aren’t right for today’s world. We need people with life experience who can be empathetic, pick up on nuances and use open questioning to get to the heart of the issue.
It’s important to recognise that even with the best training in the world, the right corporate culture and the right incentive schemes, it’s not appropriate for an agent to continue certain conversations unless they are highly trained. Identifying the correct moment to deploy expertise and experience is vital.
Great conversations are the key to achieving fair customer outcomes, but so much lies behind that seemingly-simple guidance. We find that using data and scorecards to profile consumers allows us to identify potentially vulnerable individuals before contacting them. This knowledge is invaluable in matching consumers with staff members at the most suitable agencies; determining the language to use in correspondence; and deciding how best to approach them.
Traditional methods of contacting a customer don’t work as they used to. Someone with anxiety or mental health problems will struggle to do something as simple as submitting a meter reading for a gas bill. If you call them unexpectedly or a letter lands on the mat, the chances of them feeling able to engage are slim. We need to think differently.
That means offering multiple channels of communication, especially for demographics that prefer to engage digitally. Someone may not be able to talk to you but may feel able to have a web chat conversation – or use social media channels, something we are increasingly exploring.
Meanwhile, advances in income and expenditure assessments, such as the use of open banking to determine affordability, promises to make engagement far easier and information more accurate. We believe moving in this direction will not only reduce the burden of assessment for consumers and organisations, but will result in more realistic and sustainable arrangements.
The future of debt collection requires a different approach. Standard digital options will work for straightforward circumstances, offering an easy and consistent journey for the customer. The remaining cases of vulnerability, complaint or hardship require fewer agents but with much greater skills than in the past.
We use an Oversight Model to ensure our agencies meet high standards – their measures must align with ours and their success defines the quantity of debt we pass to them. Likewise, our Vulnerability Standard is definitive on what we expect from our agencies. With the landscape continuing to shift from rules-based regulation to principles of genuine responsibility, businesses that are behind the curve will find it impossible to hide.