Once you’ve decided to optimize your debt collection process, it’s time to select the best tools. Organizations often look for integrated solutions that support personalized messaging at scale. Your debt recovery software should fit seamlessly into the past-due customer journey and your back-office collection workflows.
However, not every application offers a significant, swift return on investment (ROI). Financial, telecommunications, utility companies, and other service providers should determine their business requirements and select debt recovery software that checks off all the boxes. Here’s how to start.
Determining what’s best for your business
You recognize there’s a problem with your current debt collection system. Perhaps you rely heavily on third-party recovery services or struggle to staff your ever-growing collections department. You may have noticed a decline in customer retention and an increase in days sales outstanding (DSO).
Something needs to change. But what? Before exploring debt collection software solutions, think about your current strategy and how changes to payment compliance in your industry affect operations.
Current vs. future collections strategy
The current linear contact strategy is ineffective. It may lack segmentation or scalability, or make it difficult to focus on high-value accounts at the various debt collection stages.
This inefficient process snowballs into customer loss, productivity reductions, and higher operational costs. Modernizing your approach can alleviate these issues.
Take stock of your existing plan. Your historical reports can show how your performance has changed and will reveal areas for improvement.
Questions to consider include:
- Do you contact clients using their preferred method?
- What is your early-stage collections engagement rate?
- How much does your company spend on debt recovery?
- What payment methods do you accept?
- Have customer satisfaction or retention rates decreased?
- Is your collections strategy future-proof?
- Can customers self-cure?
- What is the overall customer experience?
Now, what does an ideal collections strategy look like? A digital-first plan incorporates automation to increase efficiency and lower costs. It supports digital channels and payment methods, personalizes communications, and aligns with your organization’s mission, values, and goals.
Altering your strategy can produce significant bottom-line value, resulting in more repayments and fewer write-offs. Moreover, a humane approach decreases risks related to brand reputation and compliance.
Payment compliance considerations
Every industry, from Financial Services to Utilities, must understand how different regulators view collections processes. It's also important to know what your customers expect. Consumers often turn to the Federal Trade Commission and the Government of Canada for guidance when dealing with collections.
Yet, McKinsey & Company highlights an increased “emphasis on fair outcomes.” This includes “offering customers every opportunity to find a solution” and using “tailored messaging.” McKinsey & Company calls these measures the “minimum requirements in many markets.”
However, complying with new guidelines is challenging when relying on manual processes. Your playbook for digital collections should consider the impact of regulations and customer expectations, detailing how your optimal approach improves performance across all areas.
Early-stage debt collection software requirements
You likely uncovered processes that debt collection software could improve during your strategy review. Telecommunications, Utilities, Financial Services, and other service providers want to keep customers, recover more revenue, and lessen reliance on agencies.
When buying collections and recovery software, consider how different features affect the past-due customer journey and in-house collections processes. Specific capabilities such as API integration, automation, and analytics improve performance in multiple areas, allowing your organization to achieve several goals simultaneously. Likewise, white-label solutions can help you achieve a faster, more significant return on investment (ROI).
Automating digital reminders lets you scale communication quickly. When combined with behavioral intelligence, Service providers can automatically send thousands of personalized messages, including automated invoice reminders.
This capability means your team spends less time making phone calls and leaving voicemails. On average, Financial Service providers using Lexop improve productivity by 30% and save up to 25 hours of agent time weekly.
Yet, automating the process doesn’t result in robotic, impersonal customer experiences. Choose debt recovery software that offers custom templates and a delivery cadence based on your customer’s past interactions and preferences. Doing so keeps the personal touch that your brand is known for without driving up costs.
Automation features also give your agents more time to focus on high-touch accounts. Furthermore, customers welcome personalized messages, convenience, and control. By offering a self-cure portal and flexible repayment options, you can ensure your process complies with collections regulations and aligns with your company’s mission and values.
It's essential to track and analyze customer interactions, as well as key performance indicators (KPIs) for monitoring software performance. Like automation features, analytics save your organization time. Instead of manually inputting responses to communications, debt collections software monitors engagement in real time.
It can account for emails and text reminders, showing how many were sent, delivered, and opened. Use the information to tweak your message templates and determine the best delivery times. Also, consider how software analytics tools can help you assess KPIs and metrics related to your collections process. For your software implementation to be successful, you must be able to show its value.
White-label implementation vs. in-house builds
A pain point of many collections solutions is that users must jump through hoops to make a payment or view their options. And with consumers increasingly concerned about privacy and online security, they may feel uncomfortable submitting a repayment to a system that lacks your company’s branding.
Building software in-house is also complicated. It requires developer expertise and ongoing maintenance, costing your organization time and money. In the buy vs. build debate, a third option exists: white-label software.
Software as a Service (SaaS) solutions can cost less than building add-ons in-house, connect seamlessly with existing payment gateways, and reduce friction in the repayment journey. Lexop sits on top of your current systems, letting you scale outreach without straining your IT or collections department.
Ensuring optimal customer service
By following the best practices for debt collection, you can improve past-due customer experiences and get paid. Software solutions and a modern contact strategy support digital-first communication, like email and text, which nearly 70% of Lexop survey respondents desire.
These personalized messages via Lexop’s white-label service ensure that your customers feel valued by your organization.
Proactively reach past-due customers
With overdue accounts expected to increase, companies must take steps now to reduce risks. Lexop’s white-label solution automates early-stage collections, allowing you to send personalized reminders at scale. An engagement funnel shows past-due customer actions in real time, while behavioral data inform your strategy. Talk to an expert to learn how Lexop can increase your self-cure rate and quickly improve your recovery process.