Technology is making consumers and brands more interconnected than ever before. We walk around with mobile banking in the palm of our hand, we can remotely communicate with others via an app, and we can purchase new insurance policies in just a few quick clicks.
But despite the strides that have been made to more closely embed products into consumers’ lives, that is only one side of the coin. Companies must also work to embed payments into their consumers’ lives. Otherwise, they risk wasting unnecessary time and effort chasing money they are rightfully owed.
So how big is this issue? Mull over the following statistics:
- 6.1% of European households are in arrears of their utility bills;
- 4.7 million UK homes struggled to pay their telecoms bills in 2020;
- 38% of European consumers are concerned about being able to pay their bills.
This article will examine why companies across a range of industries need to implement enterprise collection software. Specifically, it will examine how collections software can help insurance companies, utility providers, and telecommunications companies (among others) more easily recoup their outstanding debts.
Collections software is needed for every industry
Customers want their lives to be as easy as possible. They want to be able to sign up for a new phone plan themselves, open a utilities account without having to jump through a ton of hoops, and add themselves onto a car insurance policy in minutes.
In an effort to continually keep up with this pace of change and to serve their growing demand, banks, insurance companies, telecommunications providers, utilities and others have rapidly scaled up the products they offer (and how they serve consumers these products).
However, they have ignored one key aspect: how they are paid, and what happens if they are not paid on time. It is all well and good if consumers are enjoying a greater CX—but if you are not being paid for your products and services, it is all for nothing.
This means that companies often rely on paying massive amounts of money to debt collection agencies (DCAs) to chase up past-due customers. They might even end up selling their outstanding debts to third parties in the hope of mitigating potential risks. However, not only is this unnecessary expenditure, but the process is also time-consuming and often not very consumer-friendly. Your company might be paid what you are owed, but you might also lose customers if too aggressive approaches are adopted.
The democratisation of access to key services (be they utilities, insurance, or telecommunications) has been great for consumers, and is not set to stop any time soon. The global utility market is predicted to enjoy a compound annual growth rate (CAGR) of 7.2% this year, with telecommunications rising 5.4% per year until 2028 and the insurance market enjoying a 15.1% CAGR until 2026.
However, to keep up with this growth, providers must have a plan in place to ensure that they are paid on time, every time. That is where collections management software comes in.
Collections management software provides companies with a smart, data-driven, automated, and customer-friendly means of collecting what they are owed. This means that companies do not have to deal with third-party providers. They can minimise the costs of employing an external DCA, and they can recover more money in the most customer-friendly environment. In turn, companies can then invest this money into providing even more innovative products and services to their customers in the future.
How software will help power your collections strategy
You might be thinking: “Sure, that all sounds great—but what does collections software actually do?” Let us dive into a few key features that explain how software helps companies optimise their collections approach.
If you are a high-growth company that attracts new customers by the second, it can be tricky staying on top of who owes how much and when it is due. You probably have the raw dataset somewhere—but it is virtually impossible to gain quick insights from a mammoth, incredibly data-heavy spreadsheet.
The best collections management software provides you with clear dashboards that display your collections data in an easy-to-view, visually appealing manner. You can assess a variety of macro-level metrics, such as the total number of active claims and their total value, as well as diving into key digital marketing KPIs (open rate, click-through rate, etc.) for each of your outreach approaches.
Drag-and-drop content builders
If you want to optimise your dunning approaches on an ongoing basis, you need to give individual strategists and agents a certain level of control. We spoke to one leading collections expert who said that the cost of changing a single line in their outreach emails cost somewhere around €1,500 - 2,000, with agents/strategists first having to consult with IT and wait for them to make the necessary changes.
This is pouring money down the drain—it is as simple as that. Collections management software allows agents/strategists to take the reins. With drag-and-drop builders, they can easily craft new landing pages, emails, SMS messages, or whatever else in a matter of minutes.
Every consumer responds differently to your dunning approaches. So how do you know which approach to use for which particular segment? You could of course conduct a series of A/B tests, refining and tweaking your approach going forward. Alternatively, you could use software to combine A/B testing with multi-armed bandit (MAB) optimisation, an automatic machine learning (ML)-based algorithm.
Devise a series of potential templates according to your target segments. Then, send out your dunning messages, watch the results pour in, and let the MAB algorithm automatically prioritise your most successful efforts—delivering more of these messages out to customers going forward.
There is no need to throw out the rulebook and start again from scratch. Instead, you can simply opt to work with a cloud-based/cloud native collections management software that easily integrates with your existing tools, letting you simply plug and play.
Unify all your separate data into one centralised system. Gain increased visibility over the entirety of your collections approach and forget about dealing with disparate data sources spread across different tools.
Do not underestimate collections management software in 2021
How can your business not only keep up with increased demand, but fuel even further growth in the future? How can you spend less time, money and effort chasing up past-due customers?
By implementing a piece of collections management software.
Collections management software will put your business in the driver’s seat. You can devise customer-friendly dunning approaches that are in keeping with your wider CX efforts. Once customers are able to repay the bill in a manner that suits them, they will be willing to go ahead and pay you back.
The right collections management software seamlessly integrates with your other existing systems, allows you to devise your own dunning messages using a simple drag-and-drop builder, automatically optimises your outreach approach, and lets you analyse the results in an easy-to-view dashboard.
The sooner you start, the sooner you will reap the rewards. Book a demo to learn more about how receeve puts companies across all industries in control of their own collections approaches.