For Effective Digital Collections, Channel Your Inner Digital Marketer

Digital marketing principles, used for years, now drive success in digital collections. This blog highlights the key principles that translate to collections and recovery efforts.

The Collections Industry Can Learn from the Success of Digital Marketing

Marketing does it…and does it really well for the most part. Operating effectively in the digital age for a while now, the marketing industry successfully blazed a trail for other industries. Many others now draw inspiration from the digital victories of marketing. Debt collections is no different; however, it’s still early in its digital journey.

We need to start by being real here, at its core, collections always involves “selling.” Collectors, trained in effective persuasion techniques, can encourage customers to prioritize past-due payments. Digital collections takes this one step further by removing the agent and persuading customers through digital channels, which can make the payment decision even easier.

Let’s explore key digital marketing principles and when applied correctly, how they would enhance digital collection efforts.

Digital Marketing Principle: Reach Consumers Where They Spend Screen Time

Before we go down this road, know that all our suggestions are made under the umbrella of communicating with customers in collections compliantly. Adherence to all collection’s rules and regs must be at the heart of any communication strategy for this customer cohort.

For marketing, social media has become a lucrative channel due to its widespread user retention and engagement. While digital collections has not fully made the leap into using social media, the underlying marketing principle applies: interact with customers where they spend their time.

In collections, the focus is on email and text messages.

For instance, according to Pathwire Research, 84% of consumers check email at least once per day. This combined with the fact that we live in the age of smartphones, puts two key digital contact channels (email and text), in the palm of the customer’s hand, nearly 24/7.

Emails and text messages (for most) are an easier, on-the-go and more convenient way of communicating. Compare this to a collections phone call, where time, a quiet location, and above all, patience, is required.

Compelling Content Captivates the Customer 👇

A catchy, alliterative header or well-placed emoji can prompt customers to open your message. The first hurdle in digital collections outreach is getting the customer to open the message using only the sender name and subject line.

Collections Messaging Tips to Avoid Being Ignored or Purged from Inboxes

• Ensure the subject line or opening lines clearly convey the purpose of your message.
• Use the appropriate tone to encourage customer engagement; avoid a stern, dunning approach, which quickly moves to trash.
• Offer self-service options within the digital message instead of directing customers to your call center.
• Consider using emojis strategically in subject lines or opening lines for added appeal, but choose them carefully if you go that route
  • Emojis such as fire, cannonball or alarmed face are highly inappropriate.
  • These emojis: typing text bubble, index finger pointing down or alarm clock could help your message get noticed
  • Note: the choice to use emojis also depends on your overall company branding and tone.
• Be mindful of how the message appears on smartwatches and wearables. Message text (especially emojis) may look differently on these devices.

Digital Collections Messages Should Make Taking Repayment Action Easy

Once the customer opens your digital collections message, ensure that it is easy to understand and includes clear instructions for taking action. Provide payment links or links to relevant (and digestible) hardship information for prompt self-service.

In the world of digital communication, attention spans are short. Success lies in quickly engaging the customer, stating your case concisely and facilitating self-service.

Use a Multi-Channel Collections Approach to Create a Seamless Experience

Multi-channel marketing creates a seamless experience for a customer to interact with and be aware of a company as they navigate from one channel to another. These channels can include social media, streaming services, website, email and/or text messages (among many others). For companies engaging in digital collections, the engagement channels might be limited, but the concept still rings true.

Creating a multi-channel experience for a customer is not easy, but it is achievable. Documenting customer journeys with a focus on their digital experience begins to frame a digital collections strategy. Capturing customers’ preferred contact channels represents a significant first step toward implementing a digital collections strategy.

To make a digital collections strategy truly shine, you can incorporate software that actively manages your multi-channel digital collections activities. Many software tools exist to help companies efficiently organize and execute digital collections strategies. Some of these applications boast surprisingly short implementation times expediting your digital collections deployment.

The Consent Standards in Marketing Also Apply to Collections

It would be irresponsible to discuss contacting customers via digital channels without addressing the ever-important concept of consent. Just as it applies in digital marketing, it applies to digital collections. The recent implementation of Reg F heightened the scrutiny on email and text communications for collections. However, it is not impossible to effectively use these channels to communicate.

Keep these 4 points in mind as it pertains to consent to keep yourself covered:

1. Collect it…Have a mechanism in place to collect consent. Make it a point to collect text and email consent through as many avenues as possible.
2. Store it…Collecting it without a central repository to store it will do you no good. Be sure that there is a “source of truth” system for all things consent related.
3. Confirm it…Be sure that all digital communications include the ability opt-out or unsubscribe.
4. Maintain it…Ensure that you can act on consent revocations or unsubscribe requests. The action must also be prompt, tracked and stored as above.

Bridgeforce Can Help Prepare, Deploy or Enhance Your Digital Collections Strategy

In the fast-paced world of digital advancements, new players are diving into the digital collections waters all the time. Those that do not adapt to the digital landscape will quickly fall behind their peers. A digitally savvy consumer will always prioritize their engagement with lenders that they can interact with digitally, versus those that continue to use only traditional methods.

Regardless of where you are in your digital collections journey, Bridgeforce can help you along the way and position you for success. Contact us today to find out how your digital collections strategy stacks up, and how we can help you become a key player in today’s digital world.

[Editor’s note: this article was written by Andrew Hopkins, former Bridgeforce Senior Program Manager]