Watch the Webinar On Demand
Infusing empathy in your collections approach can lead to more positive outcomes and improved relationships between you and your customers/members. Designing and employing an empathetic collections approach involves understanding and feeling what your customer is going through.
Everyone is talking about empathy these days, but it’s not a trend that you can jump on and off - it’s here to stay. This webinar will help you learn why empathy in collections matters, get insights into the behaviors of past-due customers and walk away with practical tips on where you can start infusing more empathy into your collections process, which also increases recovery success (because ultimately that’s the goal).
Topics & Timestamps
02:44 | Why Empathetic Collections Matter
03:57 |The Benefits of an Empathetic Approach
10:00 | 2023 Past-Due Consumer Survey Insights
21:38 | Generational Differences in Payment Preferences
26:33 | Bridging the gap between originations and collections
29:45| 4 Steps to Consider Including in Your Collections Process
The Definition of Empathy
It is the ability to understand and share the feelings of another.
Key Learnings and Takeaways
In this webinar we discuss:
- The current state of collections and changing consumer preferences
- Best practices for communicating with past-due accounts
- How to bridge the technology gap between originations and collections
- Actionable steps to improve your past-due member/customer experience and increase recovery
Read the Transcript:
[00:00:00] Michael Pupil: Good morning. Good afternoon. Welcome everyone. We're gonna give a minute or two as everybody is logging in online. We'll start shortly. I can see all the participants coming through.
I will give it another 30 seconds or so. Amazing. Well let's give it a start cuz we are recording this nonetheless. So good morning, good afternoon. Welcome everyone. It is wonderful to see so many actually online. This is great. Lovely to see some friendly names that I recognize some customers that are on board.
And if this is your first Lexop webinar, Welcome. Today we're gonna chat a little bit about the power of empathetic collections. So my name is [00:01:00] Michael Pupil. I'm the Vice President of Sales here at Lexop. And let's talk a little bit about what we're gonna cover today. First and foremost, this is not gonna be a demonstration about Lexop, but rather a discussion on empathy and how technology can provide an empathetic approach to collections.
And so we're also gonna talk a little bit about the changing consumer preferences. Best practices on communication, bridging a technology gap that we see today. And at the very least, we wanna make sure that everybody is walking away with at least one action item. So before we start, love to start with a poll.
I definitely want to get a little bit of participation here. So you know, first question to the group. Has your organization engaged in empathetic training for collection agents today? Yes or no? There is no right or wrong answer I'm expecting. I think I know what is going to come through, and so as we do this, I'll give about 30, 45 seconds for everybody to enter in their pick today.[00:02:00]
All right. I see some answers coming through.
Lovely. All right. A pretty 60/40 split. I actually thought it was gonna be higher on the yes side than the no side. But for those of you that have engaged in some empathetic training fantastic. I think this is going to be a little enlightening in terms of that next level. And for those that have not, I think some of the things that we're going to see today may actually encourage.
You know, a different outlook on collections and the experience for customers that are in a past due state. So first, before we start, let's define what empathy means, and the definition of empathy is defined as the ability to understand and share the feelings of another person. Now, why would that be important in terms of, you know, collections and the reason why is that an empathetic approach will most.
Certainly benefit the [00:03:00] member experience or the customer experience, and you're gonna hear me use those words interchangeably today. We have a number of credit unions that are you know, obviously in attendance. We have a number of different organizations, so I'll, I'll flip in and out of customer, consumer member.
But essentially what we're looking at is the lender. And so when you employ an empathetic approach, what you're effectively going to do is reduce the stress of that member experience. You're going to improve the satisfaction in terms of going through that journey. And of course, a result of that is that the consumer has a greater loyalty to the organization for helping them in what can be sometimes a very frustrating or an embarrassing, you know, situation.
And so the empathetic approach really speaks to your consumer. Now the benefits of that empathetic approach is that it's going to feed to the organization and what you see is a higher level of recoveries that take place. You'll see a positive reputation be [00:04:00] employed, you'll see lower default rates and a more productive team in terms of the collection agents that are there, that are engaging in that type of, of, you know, kind of communication.
And so there really is a two-sided approach, one for the consumer and the other one for the organization. When you are designing and employing an empathetic approach, I've been in lots of conversations. There was a, a phrase that was used yesterday in a conversation that I had with a credit union and they were talking about a personal experience and they made the comment to say, you know, bad things happen to good people, and while there are still some bad actors out there and we all have to make sure that our eyes are opened, the empathetic approach really speaks to those things where when a bad event happens to a good.
Person, this is where that empathy really resonates to help, you know, kind of solve the issue of that individual. So how do we design an empathetic collections process? Well, it's pretty simple and I like simple. What we'll do is we'll break it down into four very easy steps. The first step is you need to assess the [00:05:00] situation, right?
You need to understand what is it that's happening, what are the days outstanding? And certainly you wouldn't speak to somebody who is five days late the same way that you would speak to them if they were 50 days late. There's obviously a difference in that approach. So we assess the situation. We need to be able to communicate effectively in terms of what it is that they're going through, provide various options.
And the options may be few, they may be plenty, but obviously having that flexibility and that approach is something of an empathetic approach. And of course, we need to adapt to the scenario of the consumer or the lender, right? And be able to provide different options to it. And so, Even more simple than that.
Well, what is the communication strategy that has to take place in order to effectively walk through those four steps? And the first part is to listen. One of the hardest things to do, I, I use this analogy all the time. Imagine walking into a Home Depot and you're there on the weekend and you're looking to buy something and you see the person in that yellow or orange vest, and you walk up to them and you say, [00:06:00] excuse me, do you work here?
Now imagine in that scenario, the person says yes, they turn around and they walk away. Well, that may have been my question to ask, do you work here? But what I'm really asking is, can you help me? And sometimes listening has the ability to not just be the words that you're hearing, but the implication of what it is that's being said as well.
And this is where. You empathize, right? And what was the definition of empathy? Well, the definition of empathy again, was to understand and feel what the other person is going through. And so, while my question may have been, do you work here? What I'm really asking for is help. And so can you listen? Can you empathize?
And of course, can you collaborate to get to a win-win situation? Now, when you employ those three, easy but very difficult steps. What most teams train on and you know where we can probably do this, and some of you that wrote that, no, you don't. You probably do this anyway without actually realizing that you are taking a little bit [00:07:00] more of an empathetic approach is, you know, active listening skills.
It's to be able to identify sometimes the nonverbal cues that are taking place to be able to help solve that scenario. What we can also do is sometimes use humor in order to build trust. Now, that I would say is also, we gotta be very careful. Sometimes humor is not the right time to crack a joke.
Sometimes there are some very serious times to go through. So while we don't necessarily want to act like clowns, there is sometimes the ability to really resonate with an individual depending on what has happened. I myself have gone into. State of arrears when my credit card expires. And so, you know, cracking a joke with that where I need people to remind me constantly throughout the day.
You know, remembering things is a little bit difficult for me, so I will crack a joke at myself. Don't be afraid to compromise. While this is leveraging the options that we were talking about before, the more options an individual has, the greater the path to [00:08:00] success, and above all else show respect.
And this is so incredibly important, especially when we talk about loyalty. When we talk about, you know, the, the satisfaction of the member or the consumer that's taking place, when we know that there are so many options out there, a bad experience can lead to somebody walking out the door or just not wanting to work with you, which is, which is not the right outcome.
And so showing respect is incredibly important in this entire process. I'm gonna pivot here a little bit. And so while we talked a little bit about the empathetic approach to collections, what Loff had done earlier this year was we conducted a survey of nearly 1500 individuals who were past due.
And we really wanted to dig into their habits, their preferences, their experience, the who, what, where, when, and why, and how they were going to resolve their debt. And so what we gleaned from that was a heck of a lot of [00:09:00] information. Before we dig, dig into that, I'll start poll number two. And here's a very easy question for everybody.
How have your delinquency rates changed this year? Have they A increased B decreased, or C pretty much stayed the same vis-a-vis last year. So I'll give everybody another 30, 45 seconds here before we we go through
amazing seeing all the answers pop in and let's see what pops out here. So, Increased nearly 70%, or let's call it two thirds. So kudos to those that have stayed the, the, the same as last year. That's, that's pretty good. A decrease is even better that's out there. But like we see 67% or an early two thirds of people are seeing an increase and we're seeing that pretty.[00:10:00]
Pretty consistently across the board Now, of those individuals it's probably not gonna be a surprise to most on this call that when we pulled them, and this was back in February roughly 79% of responses, eight outta 10. Would say that they're struggling in the short term financing just to keep up with bills and that they have missed payments, or if they miss a paycheck, they're going to be in severe trouble for having to budget and make sure that they cover the obligations that they're supposed to be obligated to.
And so that's, that's worrisome. That means that there's very little. Leeway between one paycheck to the next and keeping, you know, up with those obligations is important. This is where inflation becomes so pivotal and so impactful. That's not rocket science. I think everybody would you know, kind of equate that equation from one going into the next.
But as we started to, you know, kind of get the mentality or the prioritization of the individuals [00:11:00] who are late in the study, roughly those 1500, keeping up with bills was nearly half of what the respondents were looking at. And so if for 44% of those individuals just keeping up with their bills was the number one priority, while it could also tell us that not all bills have the same impact on a monthly basis.
From one another. And so where I'm going with all of this is something that we term and something that's been used in the industry, which is called bill prioritization. And so bill prioritization leads to you know, which bill gets paid first and if there isn't enough money in the pie, is there a bill that is going to be punted to the next month?
And we call this first to wallet. Right. And so we, we label this as well, who is going to get the first hundred? Who's going to get the second hundred? So on and so forth until money is out. And if you cannot cover all of these bills, there are bills that are going to be moved over to the side. And so we started to [00:12:00] ask those respondents, well, rate, in terms of priority, what is the most important bill that you can pay, you know, quickest, all the way down to the bottom.
And so you see here, bill prioritization. I love that image of, you know, trying to figure out, okay, well, where is what going where? And while this is not gonna be a universal truth across the board for everybody, I think this does give a little bit of insight to those individuals that were late as to where they placed the priority in terms of payments.
And so with that comes decision making, right? And so maybe just to take a little bit of a tangent here chat, GPT has been in, in the news a lot and so I came across this really funny you know, kind of conversation where you know, an individual was, you know, communicating with chat GPT to say, you know, well chat GPT, how much is two plus five?
And of course Chad replies back that it's seven and the individual says, well, my wife, it's says it's eight. And chat GPT accurately responds well, two plus [00:13:00] five is actually seven, not eight. It could be that your wife has made a mistake or misunderstood the problem, and some would argue that correctly.
The husband says, well, my wife is always right, and chat GPT responds back with, I apologize. I must have made an error. My training data only goes back to 2021 and I may not have the most current information. If your wife says it's eight, Then it's eight. And so what I took from this is not only is chat GPT better at relationships than I've ever been because clearly that's the right answer, but sometimes, you know, two plus seven or two plus five does not equal seven.
And what you would think is the first priority bill. Doesn't necessarily mean that it has to be what it is. In reality, we all have our preferences, but each individual, each consumer, each member is going to take into account the variables that they have in order to come down to the solution or to the answer that they've got.
And while we may think it might be seven in reality, for [00:14:00] them it may be eight. And that's not a wrong answer. It is the right answer. So if decision making is such a, a big part of where this is going, well, let's dig into the reasons as to why those bills were late in the first place. Now, this might be data that is going to be a little bit shocking because 60% of respondents actually said that the reason why they were late on a bill had nothing to do with finances.
Let, repeat that again. 60% of consumers had the money to pay bills. Just the bills went unpaid. So the definition of empathy, we defined as the ability to understand and feel what the other person is going through. And so if 30%. Of individuals forgot 10% had an error on an invoice, 8% was because of a credit card that expired.
I've gone through that, you know, et cetera. It's more of an administrative tool and a small nudge, or moving them [00:15:00] down the line could be a very low hanging fruit for the resolution of that bad debt being taken care of. Now, 40% of individuals having a financial issue of covering a bill that's a little bit deeper of a problem, and sometimes those conversations can be a little bit.
You know, more plentiful than, oh, I just forgot to do this, or I wasn't able to be reached because I was on vacation. You know, those type of scenarios. But I thought that that was a mind blowing statistic that came through that all of a sudden started to talk about the mentality of the individual who is late on a bill and when they needed to pay it.
Now if that's the case, where we're gonna pivot to this is what are the best practices for communication to those individuals who are late, both financial and non-financial. So here's another question for the team. I'd love that you guys are so active into this, and thank you for everybody responding.
How soon do you follow up with a past due [00:16:00] consumer? A past due member, a past due customer. Is it one to seven days, eight to 15, 16 to 25 or more than 25? This is your first outreach. So DSO equals day one. Are you doing it day eight, day 16 or more than 25 days? And this one, I'll give a little more time for the, the group to, to respond here,
or should I say 25 days and beyond. All right. Excellent. Well, let's see what let's see what this comes up as. Aha. 40 20. 20. Perfect. So let's just leave this stat, this statistic up for a second here. So 40% of individuals are going within the first, the first week. And we're gonna pivot over to some numbers here in terms of the, the study that we had.
Looked at. 17% of you, however, are looking at more than [00:17:00] 25 days. Now, that might be very accurate based on the credit vehicle that we're looking at, for example, a credit card, right? When you're one day over typically I'm not getting a phone call, but you know, and each industry is going to be a little bit different, but this is very, very telling in terms of the spread of when outreach is taking place.
So, Now, this might be the organization's, you know, piece and, and a phrase that I hear so often is, we prefer our customers to do this. Well, I know that we may prefer them to do something, we prefer them to pay on time, which would be fantastic. But what does our customer want? What does our member want?
Right? What are they telling us? And so what are some of the communication channels that we use today? Well, in order to get to these individuals, day one, day eight, day 15, whatever the day is, we use call centers, right? We have agents that pick up the phone and they start to dial. Now we know that call rates have been dropping, so one of [00:18:00] the solutions that we've employed is robo dials, right?
In order to pump up those numbers so that we can get to more people over a period of time while still maintaining our regulations of who it is that we're supposed to talk to under a period of time. Email has been used more and more in order to reach out to people when they don't pick up the phone, even text messaging.
Is becoming a bigger thing and above all else, one of the oldest things that's out there is obviously Mike, the mailman, and I'll pick on Mike A. Little bit, only because he's the only one that doesn't have a K P I. And nobody can tell me what the open rate to mail is. However, we still send out mail today.
Now, I know in certain circumstances, It's mandatory, right? And it's obligatory to send out paper copy that's in there. But a lot of the other channels that we use have results that we can lean on in order to be able to figure out what it is that we want to do. Now the next image that I'm gonna show you, I have to say, is not an advertisement for, for lof.
In fact, our head of marketing is gonna absolutely kill me. [00:19:00] I'm a huge hockey fan. And sometimes we have to collect a little bit more violently. This is not an empathetic approach or maybe an image to show the non-empathetic approach, but this is certainly from a guy coming from Montreal who's a massive Boston Brew fan.
That's just what, it's a little bit of fun today. So to get a little bit more serious, When do we remind consumers? How do we outreach to them and when do we outreach to them? Would it be shocking to everybody to hear that over 50% of the respondents of the 1500 people that we had probed back in February said that they want to get notices a week before they're due?
In fact, even notices three days before or a day before the day of communication through a digital channel was something that they wanted. So while we may prefer them to take a channel of choice, what our members want, what our consumers want sometimes is a little bit different than how we are [00:20:00] organized today.
And that is a really big disconnect that I think technology can help bridge and provide them the communication of choice, which is the definition of empathy. Empathy is the ability to understand and feel what our, what the person is going through. And so if we're communicating with them in the channel of choice, we are thereby giving them the path to success.
So that's, that's pretty big. So. Now of the channels. We ran the same study last year in 2022, and here are the results that we see with, of those channels being used here are what our customers saying in terms of the amount of communication that's that's taking place. And so we see Mike, the mailman.
Making 7% less deliveries. We see phone being heavily reduced while email very quickly, you know, growing and text messaging actually growing at a, at a pretty substantial rate as [00:21:00] well, either for notices or even text by payment, email by payment, or email notices. And that shouldn't be too, too surprising for everybody because as time goes on, the digital channel becomes a bigger channel all the way across, and there's lots of reasons for that.
Gens, gen Z, millennials, gen Y, you know, gen X, all the rest of the stuff. There is more convenience to those digital channels, and we're starting to see those generational differences really start to take impact to the portfolios that we have. And we should be segmenting those portfolios based on characteristics of what it is that we're looking at.
So let's pick on generational differences for a second here. And a little bit of a sidebar. I came across this quote and I thought it was really funny. The children now love luxury. They have bad manners, contempt for authority. They show disrespect for elders, love chatter in place of exercise. Now, what I thought was really funny about that was the person who is credited for this quote is actually Socrates.
So the [00:22:00] next generation has been bashed by every generation for the last. 2,500 years. So this is nothing new. And so those generational changes, the next generation always snowplows for the one behind it. And there are new challenges, new things that are coming up much to the bigger end of the, of the generation.
Before I also saw a really funny quote where it says, if you think you're smarter than the previous generation, 50 years ago, an owner's manual to a car showed how to adjust the valves. Today it warns you not to drink the fluids in a car battery. I think back to that Tide pod challenge and I can't believe it.
Hopefully some of you are laughing. I am not picking on any of the younger generations here. It just we happen to, to always pick on generations as generations go through. But here's where it becomes really important and really serious. Younger generations or individuals that want the digital journey.
Are pretty noisy. And so there are, you know the Gen Zs, the [00:23:00] millennials, even the Gen X and the boomers, there is still a significant portion of that population that is expecting and prefer a digital first journey. Now, the flip side to that, when things get a little bit more intense, you see customer service agents being demanded by the older generations in order to make sure that they're covering, you know, what it is that they need to cover.
And so while I advocate for a digital first, you know, channel or journey, I am certainly not saying eliminate, you know, voice to voice or person to person interaction. That is not what, you know, I'm, I'm getting at here. In terms of conclusion, the conclusion that I am drawing is that it is a team sport. We need to have multiple channels, multiple technologies, multiple, you know, options, put forward to our, you know, customer base, our member base, and allow them to take the journey of choice, the definition of empathy.
Is to understand and feel what the other person is [00:24:00] going through, and sometimes the person doesn't want to speak. In fact, regardless of those generations across the board, you can see here that just about 50% of individuals when they are past due, feel frustrated. They feel embarrassed. They feel anxious, or they feel overwhelmed.
And so regardless of whether this is Gen Z or Boomer, that experience in and of itself can be a negative one. All the more reason. Earlier in the conversation when I said showing respect is important and worse, yet, if there is a bad experience, especially for younger generations, there is a high likelihood that they walk out the door and you lose that customer, you lose that member, right?
And so what we want to be able to do is provide them with the easiest path for them to be able to get from point A to point B. Bad things happen to good people. And so sometimes, you know, extending an arm, especially if there's communication [00:25:00] back and forth, will help alleviate a lot of those feelings, right?
We want to see that front part that, you know, highly valued. 8% piece really start to increase, and that's the goal of, of where we really all want to be. And I'd be shocked if any of you guys on the line today would say otherwise. So taking a proactive approach to late bill communication, what I loved is that I think the highest statistic in there was, you know, one to seven days, and I'd agree with you.
I like that you guys had said that, because what we were seeing is that roughly 60% of those individuals were taking care of that bill when it was non-financial within the first one to seven days. And so for those of you that are waiting a little bit longer, maybe that's appropriate for the, the credit vehicle that you guys have.
But what's really interesting is that number can go up to 85% within the first 30 days. And so all we need to do is be able to reach, capture the attention of the [00:26:00] member or the customer, and be able to move them down an easy path to repayment with as little steps as possible, as little friction as possible, and we'll resolve a significant portion of that.
Now, of course, we can't stop bad players in the market or you know, ex, you know, extenuating circumstances that are a little bit more were those financial needs. May extend that piece, but there's a lot there to be taken if we organize and scale a digital first journey. So how do we bridge the gap between origination and collections?
This is always a fun conversation. I in a prior life was more on the origination side of things, and even today, when I look at conferences that are out there, I see topics like meeting your customer in the metaverse, right? Improving customer loyalty with NFTs. Remember those little. You know, pictures of, of apes that went for zillion dollars using AI to streamline customer experience.
I do like that one. That one is a little bit [00:27:00] interesting. Or even something like wearing wearables for banking. An ideal partnership. Question mark. I saw that one. And what, what's insane to me is that at the front end, there is a, a significant investment in technology to put money out the door. And then once it gets into arrears, we result on the technology.
Of Mike, the mailman. So that's not true. I'm picking on Mike the mailman. I said I was gonna pick on him a little bit, but there are obviously other technologies, but as you can see, mail is still something. So when you're talking about wearables and metaverse and we're still licking a stamp, stuffing an envelope and sending it in the mail as a reminder there is definitely a gap to technology.
What's interesting is that there's also a lack of flexibility in terms of the types of payment arrangements that are there, and. One third of consumers that were in this bucket had the only option of paying in full. And for some that may be the only option that is available [00:28:00] for those individuals. That is true.
But what we would highly encourage is taking a look at flexibility. Again, the definition of empathy is to understand and feel what the other person is going through, and so perhaps payment in full isn't the only option that is available to them. Not that they want to be a bad player, but that there could be something else that is taking place and providing them with the ability to communicate in the digital channel without having to explain their story.
Might be the empathetic approach. And so what are those respondents saying to us? Well, with that, more payment options was the biggest category. Almost half of those individuals said, I want to have the choice to engage in a payment arrangement, a minimum payment, something that allows me to choose my own adventure through a digital channel without telling the story and be able to do what I need to do.
30% of people were asking for digital reminders to keep them up to date. People like me that forget everything that's in there. [00:29:00] And third, and I'll cap it here, is more payment methods. Ask yourself what the, what the customer journey or what the member journey would be. If they needed to pay a bill in all of the ways that you were able to collect a bill, and if that journey is an easy one, a frictionless one, then you're, you're going down the right path.
If it is complicated, requires multiple steps and even takes a number of days before it is regulated, then there's a problem. There's something there that is going to result in drop off, and drop off means out of sight, out of mind. Then we move on to the next thing. Capture the attention, be able to convert them.
It's the most important thing that we can do. So what do we do now? Right. Well, let's go into the action item for this. The first thing that I'm going to say is, well, we want to make sure that we have a digital first contact strategy. Right. We wanna be able to reach out to clients in the communication channel of their [00:30:00] choice.
We wanna make sure that if this is technology that let's say our collection staff is using, that they feel empowered and become more efficient. For example, I get this a lot. If you have collection agents today trying to communicate with your customers and members on past due debt, one of the technologies that came out was a robo dialer.
Now, I don't know how many of you have those or have experienced robo dialers, but what is the difference between me dialing and getting somebody on the phone or a robo dialer doing it? And the answer is, well, the system is going to make more efficiency for those staff members in order to be able. To connect with those individuals so you're augmenting the ability of your reps.
And so that's what technology should do. It should augment the ability of your in-house team or even your outhouse team if you're, if you're outsourcing this, but that technology is supposed to make it more efficient. It's supposed to allow [00:31:00] users to pick the payment method of choice, and while we may prefer certain avenues, what our customers want may be something very different, and that's who we need to speak to if we want to get to the end goal of making sure that they're paying on time and above everything else, simplify the payment experience.
Make it easy. Right. And so that's the first step that we need to look at. And so really an accounting of what your department looks like and how you are doing this, and be very honest with yourself and be open to, am I doing it the right way? Do I need to adapt? Can I make a change? And what that change will, will ultimately lead to step two, automate wherever possible.
I'm not saying automate everywhere. I'm saying automate wherever possible. And so I think I. You know, technology has done a wonderful job of making the world very noisy with so many options that are out there, right? And so many technologies, and [00:32:00] everybody's the best, and everybody's the fastest.
Everybody's the biggest. But what we want to look at is where. Can we automate steps in order to get efficiencies? Because if you are going to look at scalability, and scalability is a term that is used so often, and I think incorrectly more often than not, when we're looking at automating certain workflows, you should be able to very accurately pinpoint.
You know what the impact is when you turn a dial up or down when it comes to automation. And so that in and of itself is something that we need to you know, kind of look at across the board. And so automate wherever possible. Where are you automated to today? Where are you not, and are you speaking to potential vendors out there that can help in that particular area?
Not everywhere can be automated. Not yet anyway. Although Chat GPT made a pretty good argument to there, at least on the relationship side. The third piece I'd say is segmentation [00:33:00] based on likelihood to self cure and prioritization. We talked a lot about, you know, those different generational you know, kind of care characteristics we talked about, you know, how certain individuals want to communicate in a certain way.
How many of you have a customer or a member. That if you are tracking KPIs, you have a thousand calls logged with zero pickups. If you make the thousand and one phone call to that individual, what makes today different? And that definition of insanity definitely starts ringing in my head where it says, well, if you know that there's a segment of the population that wants to communicate via text, I know you prefer something else, but if the customer wants a different method, it is up to us to make sure that we're employing the right type of channels and segmenting them in the right spots.
And then of course, through. Efficiencies and automations and working with your vendors, making sure the cost of loan servicing is really at [00:34:00] its lowest part, so that obviously profitability is, is maintained. And if you can do that while, you know, increasing, you know, customer satisfaction or the member experience in that, I mean, that's the holy grail of what we're looking for.
So segmenting your base and the likelihood of self cure. Absolutely will resonate in a lower cost of loan servicing a better customer experience across the board. And if you can automate that and scale it to multiple lines, you are absolutely going to see a big impact, you know, to your, to your bottom line and to the overall performance of the team.
Last, but not least, we want to give the customer options. We want to be able to have the ability to pay with payment histories, you know, give options. Not all people are going to get the same treatment that I don't think is unfair. I think if you are, you know, a first time late on your bill [00:35:00] versus somebody who is late on the bill every month, a, a reoccurring, you know, kind of theme.
There should be communication that is going to be different to those two individuals, and I think that that is fair. If I have a pre-authorized payment going through, and this is the first time that I've been late in three years, I certainly don't want to be treated as if I am late all the time, and I think that that is fair.
Think about your own journey if that were to happen to you. So maybe length of relationship is something that we're going to consider. The reason for being delinquent, the reason for being delinquent, the definition of empathy. Is to understand and feel what the other person is going through. So the reason is a really important one, right?
And so having these options available to them, to all of our customers, you can do that with either our call center agents that are there, or with technology that is reading in terms of the, the machine learning that you've got as to how to communicate to them. So [00:36:00] this brings us towards the end. I've got one more poll for you guys, and that is essentially, you know, was this the greatest webinar in the history of webinars?
And so your three options are yes, this was fun. I learned a lot. Yes, I'm excited to do more research on digital collection channels. Or three, no, but just kidding. Obviously the answer is yes, and this is the best webinar that you've ever seen. I'm kidding. That's not actually a poll, but I wanted to end this with a little bit of a smile in case it got a little bit heavy on our, on our channels of communication.
If you liked today's webinar Lexop tries to put out a lot of information that is not necessarily product related, but we have a podcast that I host called Connect and Collect. We're on episode seven. Our latest one is actually with Microsoft, looking at speed, scalability, and security in the cloud.
For those that are looking for digital channels across the board, we interview. Leaders in the collection space from credit unions, banks, different financial institutions and lenders to talk about what they [00:37:00] are really going through. And so I'd encourage you guys to take a look at it. And so with that, we're gonna flip to some questions and I want to thank you.
We'll flip it open and we'll open up some questions here. And of course, on behalf of myself, Lex, and no doubt, Mike, the mailman will we'll open it up to questions now. And so I'll give a minute or two here. All right. I see some questions coming through. All right, so I see question number one. Here.
I like this one. How can I sell this internally? I'm with a credit. I'm with a cu, I'm with a credit union, and we're very conservative. I like that. Definitely I, I would I'll, I'll put it in context of a credit union, but maybe this also resonates with other listeners on the line, and I would imagine that the reason for the conservative.
Approach to technology is perhaps because of your member base or your customer base, [00:38:00] right? If they happen to be majority boomers where the, they prefer to have voice interaction, well, how do I make sure that a digital journey is gonna really resonate with them? Well, what I would say is, You know, don't sell the boomers short on the use of technology.
They may love voice to voice communication more than anything else, but there's still a significant number of, you know, the baby boomer generation that is absolutely, you know, technology literate. You know, I wouldn't, I wouldn't put them in the point of they're not able to do it. They certainly are. What I would also say is that if you do have a demographic of a more conservative or an older generation, Well, what has been the succession planning for the upcoming years, right?
What is the organization doing in 10 years and 15 years when the demographics are going to absolutely flip, and are you able to attract those new customers and those new members? And if you're competing against organizations who make things easy [00:39:00] versus older technology and a little bit harder. Why would they pick you versus, you know, somebody else.
So this isn't even, you know, a play on, you know, why would you buy op? It's more of a play on, well, how do you get the organization to turn? And, and it's really the forward looking planning of, you know, how are we doing this in five years from now? While it's difficult to predict the future, I think it's absolutely worthwhile of conversation to make sure that you are providing the best member experience, regardless of if you're conservative or not.
There's nothing, you know, wild about communicating to a member in the channel that the member is looking for, right? So, again, I know you prefer maybe to be a little more conservative, but what are your members asking for? And that's where I'd start. Second question here that I'm getting is two-way texting.
Empathetic. That's interesting. Is two-way texting empathetic? [00:40:00] It can be I think any communication that you have back and forth Is, is the starting point, right? Like, that's, that's what everybody is chasing. That's what everybody wants. You want to be able to communicate, especially back and forth with your, your customer, with your member.
What I would say is, is that that's where it is really important that the agent who is in the process of texting back and forth with, you know, your, your, your lender or the person who has borrowed. Is actively listening is able to imply employee, you know, empathy and being able to negotiate with them in order to get them from point A to point B.
What I would say is that, you know, texting is just a form of communication, like the telephone, like emailing back and forth, and so it's a conversation. It is not. Ensuring that the transaction is taking place, and that would be the one caveat that I would throw to, if you're employing two-way texting, it doesn't [00:41:00] really solve anything.
It means you're communicating with them, but you need that extra step to make sure that the payment is going to go through. It's like asking, well, is a phone call? Empathetic, and it can be if the agent is employing empathy, but we need to make sure that the agent is actually making sure that the person is going to make that payment go through.
And so what I would add to the two-way texting is do you have the ability to make sure that the person goes through the process and executes the transaction for repayment, and then you get the, the next piece to this. Let's see here. Anana and I can get another one here for the survey that outlined the numbers on when consumers want bill notification, why do customers pay late?
Is this for all of their financial products as a whole, or do these numbers change depending on which product they're looking at? Excellent question. I would assume, and we did not dig that deep into this, so. Lex [00:42:00] Op today has and serves a number of different industries, credit unions, banks, certainly financial services is an avenue that we service.
We also service telecommunications, auto lenders utilities some b2b, you know, applications as well. So we, we've got a pretty broad you know, area to this and again, A credit card. If I'm one day late, I don't think anybody is communicating with them to say, Hey, by the way, you're, you're a day late on your Visa bill.
But there are some products that you possibly would get, you know, notification like we saw between one to seven days. So I would assume that it definitely does. Depend on the product. And so this might be a great you know, question that I don't necessarily have the perfect answer for, but leads us into our 2024 that we can obviously, you know, take a look at and, and add to our next data point.
I've got one here. Answer live anonymous. What are your thoughts on payment reminders, [00:43:00] opening the door for customers to delay and attempt to ask for options not to pay? Yeah. Look, I think you know, painful is always the pinnacle of what we want to go after, right? And so We don't wanna necessarily condition, you know, our, our customers to constantly pay late.
I, I don't think that that would be, you know, the, the behavior that takes place. I think what we're really looking for are those players and by players. Those customers, those members that are good people, that something potentially had happened to them, whether it's bad or something forgetful. Those individuals that have the finances to pay.
The 60% of which that have the finances to pay, but because of an administrative piece, like they forgot or they didn't get the bill, or they have a question on the bill or that a credit card was late. Like there's a lot of low hanging fruit where they have no intention to necessarily. [00:44:00] You know, delay payment or want a payment option, or make a minimum payment rather than payment in full.
And so you always start the negotiation at Painful if they require payment options. I think that's where you need to then assess what the reason for those payment options are, and then go down the road of is it available to that individual based on relationship demographic, you know, who they are, what they are, et cetera.
So there's no. Right or wrong. I think it's a lot of decision making that has to take place. This is why training is so important and you can absolutely let technology kind of dig into, you know, that, that choose your own adventure. Ooh, Doring has a question here. Hi, Doring. It's good to see you or see you virtually.
Of course. Why is there such hesitation among banks and credit unions to implement more assertive borrower member outreach solutions? Are they afraid of losing customers [00:45:00] and bad press? Yeah. I, I I agree with you. I'll give a a great example. This is years ago and I'm probably dating myself, but I can remember when the mobile app was becoming a thing, right, ju at the start of it.
And for those of us that have been around for, for a little while, you can remember when mobile apps were, you know, starting off and at that point, Banks, credit unions, lenders, everybody had a website and everybody could go online and everybody can, you know, do some financial transactions. Now, there is nothing that prevents you from doing anything.
When you walk into a branch, you're identified and you're authenticated, and then you could pretty much do whatever it is that you want. And the web was the, or the, the website portal was supposed to be that next level and. With that came risk. Well, what happens if you're not the person that you say you are?
Right? [00:46:00] And now you're starting to, you know, engage in transactions. And as you know, those, those security products became stronger and stronger. There was a greater likelihood for banks, credit unions to adopt that technology. Mobile apps was, well, I already have a website. I prefer my customer to go to my website because I have all that security.
I don't need a mobile app. And unfortunately, credit unions were actually. You know, slower to adopt the, the mobile app. No knock to credit unions, but they were more conservative, right? And so once they saw that, members really demanded the point and click and make it easy. And even to this day, not just credit unions, but you can't do absolutely everything, all the transactions on a mobile app, you can still do more on your online banking and you can do the most when you walk into the branch.
So I would say the reason why. You know, financial institutions are a little bit less assertive when it comes to borrowing and member outreach, especially when it comes to collections is the [00:47:00] experience. So, Right. We know that when somebody falls into arrears, we saw that over 50% felt embarrassed. They felt ashamed, they felt anxiety, they felt stressed.
And if we're not employing an empathetic approach, it can be a very negative experience and most people will avoid that experience, which means not only am I not paying, but I'm not communicating. And so it's kind of a, a catch 22 where for sure on. The Lexop side, we would say stop, engage with your members, right?
Even if it's not a voice to voice, give them different outlets so that they can, you know, release some of that anxiety or that stress with the channels of choice. And there's nothing that prevents you within your technology stack to say. And by the way, if you'd rather have a conversation, call us here, which would be great, then you can overcome it and your agents can, can kind of go through.
So do excellent [00:48:00] question. We see that a lot. We would certainly encourage you know, the, the, the audit that I was talking about in step one to say, how are you doing this today? So, You know, forget about what it is that you prefer. What are your members, you know, what are your customers really advocating for?
What is the, the data, you know, kind of show and, you know, you gotta push forward. It's, it's certainly not going backwards, right? We're, we're not gonna move to rotary phones in five years. It's, it's going to be the opposite approach. So I really like that one. And another question that we've got here is, can you give me an example of empathy in collections technology that actually works?
I like that one. Because it's all, it's situational. So can you give an example of empathy in collections technology that actually works? Sure. I would say that the payment arrangement is, is [00:49:00] a really good one. I think, you know, I. You have to evaluate that as long as they take part in the payment arrangement, right?
If I owe $300 and I say, I'll pay you a hundred, you know, a week every week, and I do, that is going to be an excellent experience for me. As the person who owes, and it should be an excellent outcome for you. Who's lent out that money, right? You've gotten to the end point, which is what you've wanted to get to.
You've allowed me to get there in the path that I have chosen. And it is executed with the lowest cost, you know, of, of. Of loan servicing. And so I would absolutely say that that is a perfect example of empathy because you're allowing me to choose my own path. Again, the definition of empathy is to understand and feel what the other person is going through.
And while an individual may not necessarily be feeling it, you can absolutely allow the technology to [00:50:00] resonate with the member or the customer. I would definitely say that. Jessica, will this recording be available to us later? Absolutely. We will. Anybody who has registered, even if you were on but had to drop off or you registered and you weren't there, we will be sending to everybody that has registered.
Certainly we'll have this up on our website as well. If any of any of you wanted to, to refer back to it. Or send it to colleagues or, you know, those within your organization to see. And of course you can always reach out to us you know, for, for the rest of the group. Jessica, I would like to share it to the lending team.
Hopefully they're not going down the path of meeting customers in the metaverse and employing NFTs. I'm sorry if they are, and I've offended them. I think it's a viable path in the future. I was poking fun a little bit at them, but for sure, it's amazing how, how successful we could be that when we work together with the lending team, right.
How [00:51:00] successful the collections. Group can be very few times do I see the collections group have a, you know, a decision making say with some of the lending practices. I'm not saying never, I'm just saying it's, it's less likely that the collections team is really influencing how lending is going out and over the last 15 years.
I think the response to, you know, greater, you know arrears or greater loss was to originate more. We see that very different today with increasing, you know, interest rates. There's been a lot less origination, which means we have to be safer in terms of what it is that we're putting out there with some of the bad things that are happening.
The collections team needs to work even tighter with the lending team in order to ensure that everything that is going out the door comes back in the door to make sure that we hit our numbers in terms of the expected revenue that we have. Otherwise, there's a lot of dominoes that fall with that. So, Jessica, thank you for offering to, to share that with your team.
I would [00:52:00] employ, you know, all of you guys to, to do that. All right, there's about eight minutes left before we have to, to close up. I'll offer it open to the, the rest of the group here. Did I miss any? I don't think I missed any. If there's any last questions you know, feel free to put it in here, but I want to thank everybody for carving out the time I know how valuable everybody's time is.
On that note, I may hand back a few minutes before everybody's next call at one o'clock Eastern time or. Wherever you're dialing in from. Thank you for spending time with us and look forward to speaking with you guys soon. Take care.