Past-due customers are a vital component of any business. When times get difficult financially, a crucial thing to remember is that relationships with these individuals need to remain positive and intact no matter the circumstances. In life, and significantly since the onset of the pandemic, many people are going through difficult times, but showing compassion and empathy can help ease many people's stress and difficulties today.
A lot has changed since 2020, but one significant change has been at the forefront, reshaping how we live our lives, and that is COVID-19. The shutdowns and economic implications following the spread of the virus have left massive amounts of individuals unemployed. As a result, more and more consumers have become past-due as their ability to pay their bills has decreased. Our 2021 Consumer Repayment Preferences Survey shows that almost half of all respondent's (44%) payment ability has been reduced in the past year. This is an indicator that past-due customers are concerned about their financial well-being.
There is a need to update collections practices and show more compassion, specifically to align with current past-due customer needs and to help those having financial difficulties.
Outdated collection practices
Past-due customers are facing outdated and impersonal collection practices that include automated calls and letters. Accounts are often being sent to collection agencies with little to no warning. Using these outdated collections practices always ends up being unproductive and tone-deaf, especially in today's financial climate when many past-due customers are having issues finding ways to make payments and are behind on several bills.
Past-due customers need guidance, options, and empathy. Current collection practices are not sensitive to past-due customer's individual needs, and because of this, they often left them feeling defeated or undervalued. Our 2021 survey results show that over 67% of respondents stated that when contacted by phone about a past-due bill, the agent they spoke with was not empathetic or was not understanding of their situation.
Showing compassion digitally
In the seemingly never-ending pandemic world we live in, more than ever, past-due customers need empathy. Showing empathy can come in many forms, including providing personalized digital payment reminders. There is a common misconception that past-due customers don’t want to pay their bills or are not responsible, but that simply isn’t true. The main reason is usually a lack of funds or sometimes even just forgetting to make a payment. In the case of insufficient funds, past-due customers want customer service teams to understand their financial situation and want messaging that is hyper-personalized and empathizes with their situation, which can come in the form of digital reminders.
Our survey shows that more than 82% of our 2021 respondents stated that they would be more likely to pay their past-due bills if messaging was more personal and understanding. Digital reminders can serve as a gentle nudge to remind past-due customers of their payment obligations.
During these difficult times and the seemingly unending pandemic, having empathy is the key to understanding and helping past-due customers get through their situations. Taking different approaches, such as tailoring your digital messaging to show your willingness to understand and come to a solution together, is imperative to ensuring a better past-due customer experience.
Watch the webinar here to learn more and see the rest of the results from our survey.