Debt, Data & Digital – How Customer Journeys Can Improve Debt Collection

Hand holding a smartphone showing a customer journey debt collection email
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Debt is a growing problem for customers and suppliers within the utility industry. As energy prices continue to rise and we experience large fluctuations in weather conditions, an increasing number of customers are finding themselves falling into arrears.

In fact, a GoCompare survey estimated that 1.4 million people in the UK have utility bill debts. To compound the problem, only 11 per cent of those customers have contacted their supplier to discuss the situation. Of those who did contact their supplier, 15 per cent felt pressured to pay more than they could afford. Debt owed to suppliers in October 2018 hit £393 million, which was an increase of a quarter on the same period in 2017.

The Customer Experience Collection Conundrum

Suppliers face the challenge of complying with stricter regulations, price caps, and rising customer demands – while also ensuring they deliver a customer experience that is engaging, compliant, and takes account of a person’s situation in every interaction. Utilities invest a substantial amount of resources establishing their reputation and are at risk of having it ruined by approaching customers too aggressively or being insensitive to their individual circumstances.

Woman holding a tablet showing a customer journey debt collection email.A successful collection strategy relies upon identifying why customers either can’t or won’t pay their bills. Therefore, it is key to have a well-thought-out customer journey that leverages customer data to highlight an individual’s motivation for not paying their outstanding debt. Visibility on issues earlier in the arrears process provides more control, making it easier for the customer to resolve the situation.

In this early phase, debt is typically small, so the ability to repay is higher. If we leverage digital channels to engage with the customer early on, we can alleviate embarrassment by allowing the customer to have control over what payment options they can manage while reducing the impact on operational costs. Also, supporting vulnerable customers early with alternative methods of payment, provides an opportunity to build trust with your customer and is likely to have a more positive result.

The Benefits of a Digital Approach

Mapping customer journeys with the correct digital solution for arrears and collections can enable your business to deliver a better customer experience even in a difficult situation. Key additional benefits to utility businesses also include:

  • Reduce the cost to collect by digitally enabling your customer and removing the need for collection letters.
  • Build customer loyalty and drive retention by providing two-way communication for debt resolution.
  • Decrease outstanding days as a result of creating alternative digital payment options.
  • Increase brand reputation by identifying vulnerable customers early and targeting them with support.

Putting the Customer First in Debt Collection

In order to deliver a great customer experience, it is customers and not money that needs to be the focus of every debt collection strategy. No longer can energy providers address debtors with a single customer profile and continue to cold call unhappy and embarrassed customers. Instead, energy providers need to leverage digital journeys to address the unique circumstances of each customer and provide personalised communication that is convenient and private. This provides the opportunity to not only deliver a better customer experience but also reduce the cost of debt recovery.

To see how we are helping energy providers deliver personalised digital customer journeys across marketing and operational communications, view our ‘Energy – Customer Journey’ page.

 

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