Debt Collections are always tricky. Debt recovery agencies have to be cautious to not to invade the personal space of payees and at the same time need to send frequent follow-ups reminders. There are multiple media sources (emails, calls, and SMS) that are used in debt collection software to communicate with late payers. But choosing the right strategy to connect in combination with the right technology is the key to saving time and costs.
Gone are the days where debt collection software solutions used manual reminders or made manual connects with customers to bring in desired results. In today’s world of digitization, automatic payment reminders to the late payers tend to incur lower collection costs and result in high collection rates. These manifold benefits of auto payment reminders help achieve a balanced cash flow in the business.
The Do’s and Don’ts of Reminders with Debt Collection Software
Connecting with late payers via the right channel to connect, at the right time, is a herculean task that businesses have to take care of. Your debt collection and recovery software has to have a mix of channels to connect with customers. Businesses have to keep in mind to respect the customers’ private space. Threatening or harassing clients with numerous bombardment of reminders is a Big NO NO. Having the right tone and the right frequency to convey your message irrespective of the channel to connect is the prime factor. Now there are many hurdles on the way of making the right connections.
With numerous apps like Truecaller etc available in the market to track callers, people often put the agents or reps into a blocklist or stop taking unnecessary calls. Staying connected via emails is not everyone’s cup of tea. A layman businessman who took up a loan to support his family might not check his emails on a daily basis. After all the retorts, what seems feasible and easiest to engage with a larger set of people instantly are SMS reminders.
When Can an SMS Reminder Save Your Life?
SMS is one of the critical requirements of debt collection management system. The purpose of sending an SMS is to send a reminder for PTP. In case the customer is busy when tried via calls, the organization wants to inform the customer that they tried reaching and the number was busy. SMS reminders can be sent manually or automatically depending upon the business’s need. The agents can either directly click and send a templatized reminder right from the CRM or can send an automatic reminder message to all the customers who promised to pay tomorrow. Just after the shift ends. Debt Collection Automation can be imbibed in to trigger SMS to all the customers who didn’t pick the call. SMS help in reaching maximum clients in minimal time by letting agents send bulk messages in a single instance.
Ready to share templatized messages are a lifesaver. Quick and instant engagement and no human intervention saves time and effort eventually saving costs.
Now before going ahead, let’s look into a few use cases and some standard quick templates for SMS reminders in a loan recovery software:
- Insurance Premium Due Reminder
Your renewal payment is now overdue. Please contact us on URGENTLY to discuss your policy.
- Loan Due Date Reminder
Notice: you have missed your last monthly payment. Please call this number: . APNABANK.
- Defaulted Loan Reminder
Your loan is now in default. We want to help you get this paid by offering a 20% discount off the balance. Please call us on . Quick Loans Ltd.
- Payment Plan Reminder
Despite several reminders, your loan balance is still outstanding. Please contact us to repay the loan or arrange a payment plan. Quick Loans Ltd.
- Unpaid Invoice Reminder
We have not received payment for invoice , dated . Please contact us on immediately. Quick Loans Ltd
Now, What Next?
Now you may be confused if SMS is the only channel to put in all your stakes. Not all customers are the same, every customer has his/her own set of reasons for not paying. The recovery strategy needs to be tailored as per their unique circumstance. The best way to manage the customer experience well throughout the collections cycle needs communication with borrowers in the way they prefer.
An intelligent strategy is to put in the right amount of resources in all the channels to ripe in the best benefits. As per a McKinsey survey, application of efficient & effective collections strategies on high-risk accounts can decrease collection losses by half from the accounts which are at high risk of charge offs. SMS plays a major role in collections but turning a blind eye to other channels i.e. calls or emails won’t be a smart way of communication. A debt collection and recovery software with a combination of channels working in the right direction can help you boost your bottom line and reduce your efforts. Automated, intelligent, omnichannel communication is the way to go for the collection of every penny while reducing the cost of customer coverage for loan collections by 70%. Now that you are aware of the key factors to take care of, get set to modernize your debt collection with a smarter outreach.