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LexopNov 17, 2023 3:45:14 PM45 min read

Webinar Recap: Mastering Empathetic Communication


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In a financial landscape where member preferences shift and technology is modernizing outdated approaches, mastering empathetic communication across multiple channels is no longer optional—it's necessary to build trust among members and improve recovery rates. 

In this webinar, we dive into how personalized, empathetic communication, convenience, and technology all play a part in improving your collections strategy, recovery rates and member satisfaction. Leave this session with a better understanding of how you can bridge the gap between empathy and technology for a stronger credit union future.

Topics & Timestamps

03:00 | The lesson of love languages and communication
05:54 | NPS and CSAT Scores
8:58 | Loan application process
20:08 | Communication blindspots and the role of empathy
29:59 | Tomorrow's member experience

Key Learnings and Takeaways

In this webinar we discuss:

  • The evolution of communication in banking
  • Adapting to technology across generations
  • The importance of communication in collections
  • Enhancing member satisfaction with quality of service, trust, convenience and reputation
  • The future of member experience in collections

Read the Transcript:

[00:00:00] Michael Pupil: Good afternoon. Good morning, everybody. Thank you for joining Lexops newest webinar mastering empathetic communications, leveraging technology and anticipating future trends. My name is Michael Pupil. I'm the vice president of sales of Lexop, and I'm glad that you guys can join us. And so today's mission is for us to have a little bit of.

[00:00:24] Michael Pupil: time together to discuss adapting and evolving preferences in communication, looking to encourage an empathetic approach and a balance to technology and empathy capitalizing on outreach to members and customers in order to engage them better and looking at the future of what technology is going to be providing in a number of different communication strategies.

[00:00:46] Michael Pupil: So appreciate everybody. Joining in today I guess where I'd like to start most. And I know that we point at a number of different customers across the board, but banking and financial services tends to be the one that we focus [00:01:00] on the most. And so I thought I'd start at the beginning in terms of the evolution of banking.

[00:01:04] Michael Pupil: And so back in time, the real only communication strategy was in branch or face to face. It was a very. Human approach of making sure that transactions were taking place. And if you wanted to deposit, withdraw, or make any type of transactions whatsoever, face to face was really the way to do that. Now that wasn't only true in banking.

[00:01:23] Michael Pupil: It was true in almost every enterprise until technology evolved where phone calls started to become a thing and creating call centers. And it's a technology that is still very heavily used today. In fact, most of us online today. have some sort of either internal or externally sourced group that is in a call center to communicate with our customers and members, especially when it comes to collections.

[00:01:48] Michael Pupil: Then the advent of technology propelled a little bit further where the dot com boom created a proliferation of websites and mobile technology to allow [00:02:00] customers to interact with the institution in the privacy of their own home in a laptop or a desktop and be able to log in and start to transact and make a couple of transactions.

[00:02:10] Michael Pupil: And as security increased, those transactions increased as well. Then the advent of apps. mobile apps that were in there. And for some of you that I've been around, I'll make a fun little joke a little bit later about mobile apps and making the move from www to simply clicking an icon on a smartphone.

[00:02:28] Michael Pupil: But you can see that over a period of time, the communication channels and how we interact with our members and our customers have obviously progressed. And with that comes new communication styles and new communication ways. If anybody has ever texted with anybody recently, most of the text message symbols tend to be emojis more than they become words.

[00:02:49] Michael Pupil: And so that's, that's a thing. And so this leads me to probably a little bit of a fun slide here. Communication is key to a healthy relationship. And so I've probably been sent this [00:03:00] book by three different partners of mine over the last couple of years. And obviously I'm, I do a.

[00:03:06] Michael Pupil: Terrible job of reading this, but there are five love languages according to Gary Chapman. Words of affirmation, acts of service, receiving gifts, quality time and physical touch. And of course the credit union partners that we work with today I would go so far to say that every single one of these love languages is obviously used on a day to day basis with every single of their members.

[00:03:29] Michael Pupil: And we'll start and I'll give you guys examples. Words of affirmation. Well, If you've spoken to a credit union and you start calling them customers I think it's it becomes almost borderline insulting. And the reason why is because they use the word member on purpose because of the definition of what that means.

[00:03:47] Michael Pupil: And that is a word of affirmation. And so right by its genesis of what our credit union is, there is that example of words of affirmation being used on a daily basis. And it is ingrained into the culture. Acts of [00:04:00] service. Every single credit union member that I've ever worked with has charity work and community work that is in their communities because that is who they serve.

[00:04:11] Michael Pupil: And that is something that every group is incredibly proud of. And most of the time it's actually on the homepage on a website that they, that they use. Receiving gifts. Has anybody ever put out a promotional kind of item where either if you open up deposit accounts, there's a special gift or have a rate change for certain members at a certain period of time, trying to give back to the membership quality time.

[00:04:34] Michael Pupil: If you've ever encouraged a member to come into branch, to spend an hour. To talk about financial planning, or maybe some of the goals of members, either to buy a house or to buy a car or to retire at a certain age. And you spend that time with the member to create that relationship. That is 100 percent quality time.

[00:04:52] Michael Pupil: And of course, physical touch. That is almost very obviously very obvious with the digital world that we have. [00:05:00] Now, I'm thinking about the mobile apps and the ATM, so I don't know where some of your mind was going, but physical touch is a little bit more on the digital side of things than anything else.

[00:05:09] Michael Pupil: Now, what happens when communication breaks down? I love this slide. Mostly because of that poor lady in the green who tries to get the high five. And if you look at her face when she realizes that the communication style has not gelled too well, there's that feeling of I, I, I missed out on it. But the more awkward these things are, the funnier they all become.

[00:05:29] Michael Pupil: And it really is just a missed communication. And it can be something very simple, but obviously very funny. And in some cases it could actually be pretty bad. So to keep things light, we'll, we'll keep it with the missed high fives and the missed. Pound the fist type of type of scenarios. But if we wanted to compare communication styles and technology, we want to take a look at the diagnosis between traditional banking and digital banking.

[00:05:54] Michael Pupil: And so what we see here, one of the stats that is covered by every single person across the board is [00:06:00] a customer satisfaction score or member satisfaction score. And what we see with traditional banking is roughly two thirds of individuals are Satisfied with the financial institutions that they are working with.

[00:06:11] Michael Pupil: They're satisfied in the service. They're satisfied in the product. They're satisfied in what it is that they're getting 2 out of 3. Not too bad. Now, while digital banking is becoming more and more thing, right? The neobanks that are coming up in the online banks that are coming up. There's only 27 percent of overall people that use an online bank only.

[00:06:28] Michael Pupil: However, the satisfaction score is a much higher reported number at 88%. Now, of course, when you're playing around with percentages, everybody can manipulate a little bit of data. But I think at its genesis, What we're saying is that the individuals that are drawn to online only are not those individuals that yearn for a face to face transaction and want to be able to empower themselves with self serve, with being able to leverage technology anytime, anywhere, any place on any device to be able to effectuate the transactions that are taking place.[00:07:00] 

[00:07:00] Michael Pupil: Now, this transcends financial institutions as a whole. I think that that is comes down to service. We're going to dive a little bit more into service and where these scores are really reflected. Now, I think that there is a little bit of a misconception that only the younger generations are really diving into technology.

[00:07:18] Michael Pupil: And I, I disagree. And that is not because despite how I may look, I don't feel like I'm a dinosaur. But if we look at something as simple as Gen Z in terms of utilizing technology to pay bills, we see that baby boomers outpass outpace them by about a 10 percent margin. Now I'm not part of the baby boomer generation, but I do like seeing some of the percentages that are here.

[00:07:41] Michael Pupil: And of course, the younger generation is always going to have an affinity to the newest products, and they're more apt at engaging in the technology that's there. Whereas. Some of the preexisting kind of I don't want to use the word traditions, but kind of the workflows that were being used before, we're obviously a little bit more accustomed to it.

[00:07:58] Michael Pupil: And we all know how people [00:08:00] love change. But I think that the adoption rates, if you spend two seconds looking at this slide is pretty impressive to see that it is a wide net that technology is absolutely being used in a number of different transactions to take place. We tend to focus on the pay a bill part of things.

[00:08:17] Michael Pupil: Now to flip this around, why communication is important. It's not just important when it comes to collections, but use a great kind of workflow that's here. And if there's a credit union that has a portfolio of loan lending normally there's a little bit of promotional material that is put out there.

[00:08:36] Michael Pupil: It could be a rate. It could be a special. There could be some sort of kind of incentive for individuals to go and. Look at potentially purchasing a car and using financing for it. Now we do make it pretty easy to put the application and originate that loan completely online, including an electronic signature and executing that piece.

[00:08:58] Michael Pupil: Now, where I think that there is a gap [00:09:00] today after many conversations with lots of different institutions, not just banks, but in this case here, our car loan, when that journey is an approval, That could be a good and bad thing. I'm often reminded about that adage about the Chinese farmer who has their horse run away.

[00:09:17] Michael Pupil: The villagers come by and they say, oh, that's so terrible, the horse has run away. And the farmer turns around and says, we'll see. The next day, the horse comes back with a friend and now the farmer has two horses. And the villagers come back and say, well, this is fantastic, you have two horses. And the farmer turns around and says, we'll see.

[00:09:34] Michael Pupil: Now, the second horse has not broken in, so the son of the farmer now decides to ride the horse and try to break him in, but in the process falls off the horse and breaks his leg. The villagers come back and say, oh, that's so terrible. And the farmer says, we'll see. About a week later, the warlord or the king of the region decides that they're going to go to war to a neighboring kind of place.

[00:09:55] Michael Pupil: And they're drafting every able bodied male to jump into the [00:10:00] war. But seeing that the boy has a broken leg, they skip him and the war goes as wars normally go. And the villagers come around and say, well, that's fantastic that he didn't have to go. The villager responds, we'll see. And so the, we'll see the whole moral of this story is we'll, we'll see.

[00:10:15] Michael Pupil: When you get an approval for a loan, while we may think that that is a good thing, if the member is overextending themselves and while they may qualify for that loan on paper and through mathematics, is it the best choice or is it the best strategy for that individual? And if we've not had communication with them, who knows?

[00:10:32] Michael Pupil: On the flip side, when it comes to a decline, Do we have the proper processes in place to have the conversation as to why and put in context why that loan application had gone down the path that it had gone. And unfortunately, and surprisingly, that is not a true statement for every single organization that when I try to engage with a company in a digital channel, if I am denied the service or the product, That there is an adequate amount of [00:11:00] communication that leads me to that piece.

[00:11:02] Michael Pupil: And so if I was applying for a car, maybe the car that I was applying for is 150, 000 and I can't necessarily afford a 150, 000 car, but maybe I can afford a 50, 000 car. And so can we work with the member in order to be able to. get to the goals of what the member looks like and still provide them with that, that service.

[00:11:23] Michael Pupil: And then of course, the big one that everybody has been looking at is rate increases. And so are we advising our customers and our members in the right way based on what we feel and think the future is going to hold and while nobody is going to be able to have a crystal ball, that journey really does need to be complete.

[00:11:41] Michael Pupil: So hopefully that was a little bit of food for thought for, for some of us on, on the line as to how your workflows look today. Now, the reason why I spent so much time on that was because this feeds very, very highly into the Net Promoter Score, the NPS, or CSAT or MSAT, which is the Member Satisfaction Score.[00:12:00] 

[00:12:00] Michael Pupil: And there are. Five particular drivers of that score and how they are rated. And a lot of organizations over the last couple of years have been really diving deep into trying to improve both the net promoter score and the CSAT score. And there's a reason for it because it breeds loyalty and it also attracts new members into the organizations that we have.

[00:12:21] Michael Pupil: And the biggest down pressure that we see on NPS and CSAT is when there is poor communication, not enough. or non pointed. Lack of personalization. If I get something that says to whom it may concern, I'm not really paying attention too much to it because I'm not really concerned with who it may concern because it's not me personally.

[00:12:43] Michael Pupil: Limited digital services has to do with access. If I want to be able to do something very easily and I'm not afforded that kind of friendly workflow, I may look somewhere else to go be able to do the transactions that I'm looking for difficulty in resolving [00:13:00] issues. Well, I think that's true across the board.

[00:13:02] Michael Pupil: When there's something that goes wrong, that is the perfect test of a relationship. Can you overcome that difficulty? And most of the time, how you get over that is with solid communication. And of course, gaps in education. If we don't know, we talked about the 150, 000 car and the 50, 000 car, while I may want to drive a certain thing, it may kind of play with my financial health, where I'm putting the rest of my livelihood at risk, and I may not know that, I may just really want the car, and so are we You know, making sure that we're educating our, our customers, our members, as to what the ramifications are of the decisions that we're making.

[00:13:42] Michael Pupil: Not everybody is going to listen, but we should try our best in order to apply all of those love languages in order to engage those that we serve. We do this as part and parcel, especially in financial services. The KYC, the know your client is meant primarily [00:14:00] mostly on the investment side as well as the borrowing side so that we can instill trust the more that we know about the member of the goals and what it is that we're doing.

[00:14:08] Michael Pupil: Not only are we confirming the identity of the individual and making sure that we are following process for anti money laundering or kind of some nefarious kind of. Actors that are out there, but it does help understand the vision and the desire of each one of our members and our customers.

[00:14:25] Michael Pupil: And that allows us to find the right product or service to be able to help them in ultimately what their goal is. And that's the point of everybody. Now I talked about the downward pressure. Well, what is the upward pressure for NPS and the CSAT score? And very simply. It's boiled down to four categories.

[00:14:44] Michael Pupil: There's probably many others, but the four primary categories here is service quality, but quality of service is really, really important. And everybody can both recall a terrific experience where the service quality was outstanding, that you [00:15:00] wanted to go the extra mile and leave that review where the person just.

[00:15:04] Michael Pupil: Really had a terrific experience and everybody can certainly remember a time where we called in or met face to face with an issue. And the person was absolutely anti helpful in that process and more than anything probably frustrating and irate and escalated the situation when they didn't have to.

[00:15:23] Michael Pupil: Trust is a massive key to this of course. And there are a few things in the world that are incredibly personal to individuals, financial. Situations are one of them. And so trusting individuals with that financial piece is incredibly important. Convenience. We talked about anywhere, anytime, any place.

[00:15:44] Michael Pupil: So allowing me to choose my own path when I want to do this is important. And of course the reputation. So we see this a lot with cyber attacks or, what's the adage? It takes a lifetime to build a relationship and it takes 10 seconds to destroy it. And so [00:16:00] every single one of us on the line today.

[00:16:02] Michael Pupil: Regardless of if it's a professional or a personal reputation that we have, we all work diligently in our path over the course of our life to try and thread that needle to be on the right side of things in order to have that convenience, have that trust and deliver a service of quality that is a high one.

[00:16:21] Michael Pupil: So that's the upward pressure across the board. Now, if I'm going to switch gears. The empathy efficiency balance. It is not always easy to do this. And so most of us are going to ask, well, where do you start? And we think that we're already being empathetic. And that I believe is going to be a hundred percent true, but it's always great to take an audit of what it is that you're doing.

[00:16:42] Michael Pupil: And is there a process that is put in place by design? And so we can. put together an empathetic process and start to detail it out. And we can boil it down to a couple of easy points. I like easy. The first thing that we need to do is assess who it is that we're speaking to and what [00:17:00] the situation is.

[00:17:01] Michael Pupil: Is it a problem or is it an opportunity that is looking to be seized? And based on that assessment, It'll lead you to a different branch or a different tree to different branches of outcomes that we can, we can take place. So understanding and assessing the issue is really important. Don't forget the definition of empathy is to understand and feel what the other person is going through.

[00:17:22] Michael Pupil: And the only way to do that. First, you need to assess the issue so that you can have that understanding of what the person in front of you is actually going through or trying to achieve. When we communicate, we want to be able to build that rapport, have that trust. How many of us have had a conversation with somebody where we don't know all the details?

[00:17:41] Michael Pupil: We make a decision based on the limited amount of information that we have, and then fast forward the clock and we realize that maybe the decision wasn't the greatest one, but it is also because we didn't have as much data. That we could have used that would have obviously skewed the decision making process.

[00:17:57] Michael Pupil: So communication and rapport building is so [00:18:00] incredibly important to really understand what the variables are in the story so that that way we have all of the information to make the best choice. That being said, there are very few times there's only one option or one choice to be made. And obviously having multiple options is an advantage to individuals.

[00:18:21] Michael Pupil: So the more often we're able to offer different options to individuals, the more comfortable they are and the better off it's going to be. And of course, you want to be able to adapt and change. The market is always changing. Life is always changing. And can we incorporate that and understand that other people's situations are changing constantly?

[00:18:43] Michael Pupil: People are passing away. People lose jobs. People get promoted. People have babies. There are lots of different things that end up changing somebody's life. Excuse me. Now, why am I harping so much on empathy? Sounds very strange from a technology [00:19:00] company's perspective. Why empathy is such a, a tagline that we kind of, or a banner that we kind of champion around.

[00:19:07] Michael Pupil: Well, the reason why is because very simply, It decreases the stress level of the member or the customer that we have whenever and again, Lexa tends to focus on preventative communication and a little bit more on the debt collection side when somebody is in a state of past due or dead the emotional.

[00:19:29] Michael Pupil: State of that individual is never an excited one. Nobody is ever happy about being 10 days overdue on a car payment And so if there is an empathetic approach It tends to decrease the stress level of that individual and that's important and the reason why is because it'll improve the member Satisfaction of how we are trying to deal with that issue the biggest advantage or the biggest thing that we can have as a team, especially when we're communicating with members is to actually communicate with them, to get them on the phone, to get them on the [00:20:00] line, to have them respond, to be able to communicate back and forth so that we can understand what they're going for and then be able to figure out, okay, well, where do we go from here?

[00:20:08] Michael Pupil: The hardest part of the job is when they don't answer the phone. When they don't answer the emails or text messages or letters that we send and we have a blind spot as to what's going on. And as those days late increase, the messaging gets more and more pointed and sometimes more and more aggressive, but we don't even know what's going on.

[00:20:28] Michael Pupil: And so check By having that empathetic approach and communicating correctly, we're decreasing stress. Hopefully there's a better experience with members where communication go through. And the end result of that is increased member loyalty. We can get you through a rough patch and we've gone through some stuff together.

[00:20:45] Michael Pupil: There normally is a little bit more loyalty that is built. Now, that was on the member side, the customer side. Excuse me. Now, why is that important for an organization? Well, we were touching about this before in [00:21:00] terms of the cause and effect, while by engaging in that type of behavior, what we tend to see is higher recovery rates, very important, lower defaults, by definition, a greater positive reputation, don't forget, reputation was one of those uplifts to NPS and customer satisfaction scores, and so by helping them out with that Empathetic approach, it will push up the positive reputation and of course, more productive teams.

[00:21:27] Michael Pupil: I have yet to find a customer support team or a collections team that receives a phone call. And my favorite is always to pick on the airlines. Cause I think we've all had these courses, but how many of us on this webinar today had called up Delta or JetBlue or anybody on the one 800 number to say, Hey, by the way, I just wanted to give you a call.

[00:21:47] Michael Pupil: The plane took off on time. I landed and the flight was smooth. My bag came out perfectly conditioned and no problems. And I just wanted to call you guys to say a great job, keep it up. And [00:22:00] the unfortunate reality is that not many of us have made that call. If anything, it is. frustration and anxiety because we're about to miss our next flight.

[00:22:08] Michael Pupil: The bag is missing. The luggage has been beaten up something fierce where it must've gotten to a fight with a bear. And I've seen some funky things over my days in terms of traveling, and there's always that, that level of anxiety. Now, when we are able to approach that with empathy and we have higher recovery rates, lower default rates, there's a greater positive reputation.

[00:22:30] Michael Pupil: The internal feeling of our team members is high. It is very difficult to be empathetic when we are in a bad mood, right? And when we are weighed on heavily, and that's what we tackle every day. It really is a special gift for the teams that are tackling this day in and day out, much like teachers. I don't know if I could personally be able to handle little kids all day every day would drive me crazy, but that's me.

[00:22:57] Michael Pupil: I have a lot of value in that, in that piece. And I have a lot of [00:23:00] value for the teams that are tackling this. Now, why I'm saying that this is so important on the internal side, there's a story that I love. I use it a lot. I'm not necessarily a big basketball fan, but for those of you that recognize who this is, this is coach Popovich of the San Antonio Spurs.

[00:23:14] Michael Pupil: He's an incredibly well gifted coach, he's in fact won five championships, his overall winning percentage in all the years that he has coached is 642. And this includes the last couple of years where the team has really been weak. He's also a gold medal winner at the Olympics, but what I think he's going to be remembered for most overall, and if any of you have come across this coach, and if you haven't Googled him, I think he's wildly very interesting as a leader is that he is going to be world renowned for his.

[00:23:45] Michael Pupil: knowledge of wine and food. And the reason why a number of years ago, they were in the finals, they were playing and they were up a certain amount of points going into the fourth quarter and the team blew it in game six [00:24:00] and the team was disheartened. Unmotivated. They felt like they let an opportunity slip through their fingers and now going into game seven for anybody who's a sports fan, the momentum has now changed and they thought that they had let their coach down and what he did was is that he took the entire team to an Italian restaurant in the area, spent a whole bunch of money on wine and food and had the whole, all the families come in and they spent the entire night, not trying to diagnose the game, but they just wanted to be together.

[00:24:28] Michael Pupil: as a group. And he knew that they were so hard on themselves that they were never going to be able to mentally get over this hurdle of this loss. And it was almost going to be a foregone conclusion that in game seven, they were going to come out flat, unmotivated and kind of discombobulated and the team would have fallen apart.

[00:24:47] Michael Pupil: And so what he did was, is that he recognized at this moment in time, what is needed. Is a little bit of healing internally and something that is outside now probably doesn't hurt that he loves wine and loves [00:25:00] expensive wines and certainly has the budget to do it. So not necessarily telling all of you guys that you need to spend millions on it, but sometimes recognizing the emotional state of those that are internal.

[00:25:10] Michael Pupil: Can be game changing. By the way, they did win the final game into that one. Capitalizing on digital outreach. So let's move away from that, that, that warm hearted piece. And where is this technology lending us to the future trends and outreach to this? And I've got some weird thoughts around this.

[00:25:30] Michael Pupil: I've been in technology for a number of years. I've certainly seen where we've been, where we're headed. And it always astounds me that we Go to conferences. We have events and there's so much information about creating virtual banks and meeting customers in the metaverse. That was a thing.

[00:25:48] Michael Pupil: Maybe it's dying out a little bit and rightly so using AI to streamline customer experience. And that is becoming a bigger thing. across the board. And lots of organizations are looking at how to incorporate that. I even [00:26:00] saw once upon a time improving customer loyalty with NFTs when those things was a flash in the, in the pan.

[00:26:06] Michael Pupil: It may come back. It may not, I don't know. But even things like wearables and banking as an ideal partnership to things like watches and glasses and a whole bunch of different things to make that convenience a little bit better. None of these are bad ideas. I don't think any of them are good or bad.

[00:26:22] Michael Pupil: That that's not the point to it. But what I do think is very interesting is the consistency of the message. And we tend to look at a lot of these technologies at the front end, make it very easy for me to get the product. But then when we look at some of the workflows on the backend. We lick a stamp, we stuff an envelope, and we send it in the mail.

[00:26:42] Michael Pupil: Now, that's not the only process that we have. Of course, we use some digital channels to collect, and I have no problem with any mailman or mailwoman that delivers that as a service. But we can see that if this is the primary piece of communication or a significant piece of the communication, there is a gap between delivery and [00:27:00] expectation.

[00:27:01] Michael Pupil: And so, Going back to the member satisfaction score, what we really want to be able to do is promote more and more the user friendly digital tools that we've got. Technology moves forward, it does not move back. Rotary phones are not going to be making a massive comeback, the fax machine is not going to be making a big comeback, and so some of the newer technologies that we might be snickering and laughing at, and by we, primarily me, Those may become a reality in the short term future.

[00:27:28] Michael Pupil: And so exploring those ideas is always a good thing. But unless the tool is user friendly and easy, not only to use from the organization standpoint, but also customer or the member standpoint, you're never going to get a lift in those satisfaction scores. There needs to be a proactive communication strategy, and it should absolutely be personalized.

[00:27:49] Michael Pupil: And of course, what we're trying to do is leverage data and analytics as much as possible to help us with those decisions. We're going to come back to leveraging data and analytics because that ties very much [00:28:00] into AI and machine learning. And I'm not quite convinced that we're at that threshold yet that this whole kind of idea really works to take a step to the side and maybe just paint the picture on terms of the collection side.

[00:28:13] Michael Pupil: This was a recent article that came out their credit card debt had hit over a trillion dollars. And what we see here in terms of the communication strategies, McKinsey and company came out with a survey to find what, where. Are the communication channels for those that are past due on credit cards and what is it that they prefer and what you can see is that emailing and text messaging tend to be some of the higher percentages across the board from low balance, low risk to high balance, high risk cardholders.

[00:28:41] Michael Pupil: across the board. And what that tells us is that regardless of where you are, regardless of what your risk tolerance is or what the balance level is, digital channels tend to be outweighing some of the slower channels like mail or face to face interactions. Where it gets deeper in the same study that McKinsey [00:29:00] put together, they broke it down into three categories of zero to nine, 10 to 29 or 30 days and more.

[00:29:05] Michael Pupil: And they started to analyze what the traditional channels versus the digital channels are. Those traditional channels being the phone calls and the face to face, the digital channels being email, texting things like portals. And what you'll notice in every single one of these segments is that the digital channels outpace the traditional channels in both partial payment And full payment.

[00:29:27] Michael Pupil: That is a huge insight. And so I'd encourage everybody to take a look at that report with McKinsey. If you guys have any questions or want to be pointed to it, happy to do that. It supports it, whether it's Lexop or somebody else. I think that this is a very telling piece and these numbers, by the way, are going to continue to increase over time.

[00:29:44] Michael Pupil: Just like I said, rotary phones are not going to be coming back. Now we will never eliminate the pure face to face forever. I think that is one of the characteristics that make us human, but we can certainly take a look and take inventory of the digital channels that we have. And are we using them effectively?

[00:29:59] Michael Pupil: [00:30:00] So let's talk about tomorrow's member experience. We talked about the in branch. We talked about the call centers, websites, and mobile apps. Well, what's next? Well, that's a really good question. I think there's an argument to be made about AI. I think that there's an argument to be made about a number of different things and where we see them most is AI being applied in text messaging and emailing and voice powered messages and voice.

[00:30:24] Michael Pupil: voice powered systems. I know myself whenever I call in and I get one of these 1 800 numbers where it has the call routing, press 1 for this, press 2 for that. I am probably the most impatient person ever where I start saying, agent, Reception just give me a person and I start throwing a tantrum because I don't want to listen to the messages.

[00:30:45] Michael Pupil: I don't want to listen to the prompts. I just want to be able to speak to somebody to take care of what it is that I need to do. And so what we thought was going to be helpfully corralling people to get into the spot that they do and maybe that's an exercise I need [00:31:00] to practice with a little bit more on myself about being patient.

[00:31:03] Michael Pupil: I think that there are probably a few of you on the line that have probably done the same thing after maybe clicking one or two options. Just give me a person so I can take care of this. AI is going to be trying to help in terms of personalizing the messages, making sure that they're connecting to the individual based on their data points based on their data points.

[00:31:22] Michael Pupil: So this is where I'm going to pick on this a little bit. And while I love that this technology is being created, I think I still think we're a few steps away from this. And here's why. Let's play a little game. We're going to pick on data points right now. And for anybody that has explored AI, AI works by feeding the machine data points in order to become smarter and ultimately make decisions.

[00:31:44] Michael Pupil: And so that is the piece that we're going to be playing on here. So let's take... member A. We're going to give it some data points and we're going to see what's going on. And so the person we're going to reach out to is male. The person is going to be born in 1948, so we can put an approximate age and group them [00:32:00] into a category.

[00:32:01] Michael Pupil: The person was raised in the United Kingdom. They've been married twice. They live in a castle and incredibly wealthy and famous. Now, I'm putting in a couple of data points here because this individual is going to be unique. At least, I was not in a castle, I'm not rich and famous, I'm not born in the United Kingdom not born in 1948, so there's obviously some differences between this individual, member A and myself, and so this, this person would be unique.

[00:32:29] Michael Pupil: Well, now let's take member B. Thank you. And member B will also be male, also born in 1948, raised in the United Kingdom, married twice, also lives in a castle, and wealthy and famous. Now, the exact same demographics, the exact same information that we're putting through. And so, if you guys are trying to guess who this is, I'd love to see if anybody gets this.

[00:32:53] Michael Pupil: One person would be King Charles, the other person, Ossie Osborne. And so I don't know about you, I have a [00:33:00] feeling the communication styles and methodology between these two individuals might be a little bit different. Maybe I am making an assumption that is wildly wrong, but in my opinion, personas shouldn't be about the demographics.

[00:33:14] Michael Pupil: Personas are more about the individual. And so data points can be sometimes a little bit misleading. And this is where the human interaction still trumps I think just taking data, plugging it into an algorithm and then, you having it spit out. And so there is something to be said about that.

[00:33:30] Michael Pupil: I'm gonna keep this open here. This is adapting to evolving preferences. We do a report that you can scan if you want this QR code or if you want this report afterwards and you don't have a chance to scan this, just let me know. There'll be my contact information later, but it is a wonderful report to kind of take a look at.

[00:33:49] Michael Pupil: And that really leads us to the end of the slide. And in fact, I'll leave that open for a little bit and see if you guys have any questions or any comments [00:34:00] that you wanted to fire my way. So I'm going to open up the webinar chat and and thank you for entertaining me on, on allowing me to speak here today, guys.

[00:34:09] Michael Pupil: I'm just going to open this up here.

[00:34:15] Michael Pupil: All right, looking at questions. So where do we start? Good question. I think if I had to point at where do we start? In a previous slide, I had talked about taking an assessment of, you know you know, what is it that you do today? Like, what are the, what are the communication channels that you use?

[00:34:41] Michael Pupil: When was the last time that you've uploaded or reviewed templates? When have you taken a look at how the process works today? Have you run a net promoter score or a customer satisfaction score with what's going on? And are you taking some of that feedback? And of course, that is where I [00:35:00] would focus on most in order to take inventory first.

[00:35:04] Michael Pupil: Taking inventory is the first step in making any type of change change for changes sake is not necessarily a strong thing. What I would be looking for is more for you to do your self diagnosis and then what you can do is you can benchmark it. With what other people are doing, and you can benchmark that with other vendors with others of, let's say, if you're a credit union with what other credit unions are doing and trying to glean in best practices of communication.

[00:35:32] Michael Pupil: So that that would be the 1st place that I would. I would go into hopefully that helps. And if you're curious as to where to start please reach out to me. I'd love to, to help kind of put that together and and, and focus it in on where, where should we start? Maybe there's a couple of introductions that we can, we can make that you can have with other organizations that are doing something that is similar.

[00:35:57] Michael Pupil: Next question here this one,[00:36:00] 

[00:36:03] Michael Pupil: how does how does Lex up fit into this? Well, it's a great question. Because I talk a little bit about face to face and I talk about internal teams and being empathetic. And what, what would seem. Counterintuitive to a digital company that, that provides a technology that tries to really self empower an individual without involving another human being.

[00:36:28] Michael Pupil: So how Lexop fits into that actually is in that last part of the sentence, which was the word empower. And so... It becomes an incredibly useful and powerful tool when an individual is able to conduct business themselves, the flip side to that coin is, is the individual well educated enough to make the right decisions?

[00:36:53] Michael Pupil: And are we helping them on that journey? And are we giving them the right tools to make the right decisions? And that's the [00:37:00] balance that we have to kind of. Kind of work on and so where Lex up fits into the empathetic style of communications is that we tried to provide that convenience upward pressure to the stats.

[00:37:13] Michael Pupil: We tried to provide the ability to engage in different options of. Repayment and we try to allow them to be able to have a plethora of different ability of communication. So we're not preventing them from calling in or going in. We're simply offering them additional service across the board. Now, when that service is safe.

[00:37:38] Michael Pupil: easy to use on both sides. What you get is a greater engagement level. The greater engagement level feeds into that reputational piece that we were talking about before. And all of that will kind of drive up the number of the engagement or the experience being a positive one. We focus a lot on the member experience part of things.

[00:37:58] Michael Pupil: So that, that is a, [00:38:00] an important piece to us. Where does Lexop see the future of collections going? Well, I think it's, that's interesting. So it's the future of collections instead of just the future of technology or communication. Future of collections, I do think, is going to incorporate more technology with machine learning, with AI.

[00:38:21] Michael Pupil: Whether we're going to go down the road of metaverse or wearables and stuff like that. Be very cool. Everybody has probably seen the movie free guy where he puts on the glasses and you can see everything in the world. It's kind of neat. But I, I, I do think that the, the goal is to really leverage the data that we've got with having the right type of screening to it and being able to reach out personally in scale.

[00:38:48] Michael Pupil: That has always been the hardest part of any organization is that the bigger you get, the harder it is to, to focus on the individual. And then we try to use words like automate where you want to try to group [00:39:00] everybody together and send it out. And unfortunately, sometimes it gets a little bit too big and then you lose that personal touch and you kind of just feel like a number rather than somebody that is valued.

[00:39:11] Michael Pupil: And so I think that personally, the future of collections is getting far more personal. With the ability to scale, and so there's lots of companies out there that will try to kind of go down that path in various different ways. And I think most organizations try to engage in that, but then there's also the balance of what the budget can afford.

[00:39:33] Michael Pupil: And can you do that with the resources that you have and what is available to you? So not everybody can buy every single toy that's out there, but it's using the right tool at the right time. You know for for what it is that we're trying to do. So I think personalization at scale is really going to be the The future of collections and maybe i'll transcend that to communication as a whole how do I get my credit [00:40:00] union to incorporate empathy?

[00:40:02] Michael Pupil: across more departments and not just at the branch level. It's interesting. So I think empathy at the branch level is incredibly important because that is the face to face. That probably has the largest impact because it's a, it's a very personal one. How do you get your credit union to incorporate empathy across more departments?

[00:40:26] Michael Pupil: That's a tricky one because I would say that like any organization, what you're Effectively asking is how do we make sure that the culture of empathy resonates across the organization as a whole? And like any culture, I think it needs to be led from the top down, right? There has to be the managerial and leadership commitment to applying empathy in communication, not just in collections, but.

[00:40:54] Michael Pupil: Across the board. And don't forget, we talked about it before. The definition of empathy is to understand and feel [00:41:00] what the other person is going through. And so that doesn't only apply to a collections use case. It applies to any communications use case. And so I would highly encourage. You know that if this is a strategy moving forward, you have the effects of empathy to an individual where you're decreasing stress or increasing the satisfaction and ultimately the loyalty of the member.

[00:41:24] Michael Pupil: And then on the flip side, here are the benefits that you are getting as a result of that workflow. I would think that. By using that to management and to leadership to say that this is why we want to have this top down approach that we want to effectively have that go down right down to every single employee that interacts with a, with a member or with a customer becomes part of your DNA.

[00:41:47] Michael Pupil: And that's how the culture changes. I will say, I think credit unions do a fantastic job of already applying. empathy because they are community serving and community based. But I think this is [00:42:00] a terrific question to try and amplify whatever path you guys are going through or where you see potentially a gap.

[00:42:09] Michael Pupil: Very cool. All right. At the risk of putting this in, I know that we're coming towards time here. If there are any other questions that you have please, my contact details are there if you wanted access to that McKinsey report or even the, the research that Lexop does, or even interested in learning a little bit more about what Lexop does please feel free to reach out.

[00:42:31] Michael Pupil: It was an absolute pleasure speaking with you today, and hopefully you guys got a little bit of of extra stuff that we were able to throw onto your plate today. Have a great day. Thank you so much. See you again soon.



Lexop helps companies retain past-due customers by facilitating payment and empowering them to self-serve.