Be single-minded on debt collection
Expert commentary from Mark Cowan, head of business development, Arvato Financial Solutions, is featured in this week’s issue of Utility Week looking at how switching from a multi-provider model to engaging with one outsourcing partner is cheaper and more effective for the customer.
Mark explains that bad debt provision can be reduced by making the switch to a supplier with the scale and expertise to conduct an intense, non-linear contact strategy to drive early stage resolution of arrears. Having one supplier managing the entire arrears cycle from start to end opens up the possibility of targeted campaigns based on the specific requirements of each customer account at each point of their journey.
This is achieved by implementing deep segmentation models at the outset of the treatment, based on customer data (both external and internal), previous customer experiences, demographic data and residency data. These metrics can then be combined with the specific account characteristics to define the treatment for that customer, based on the approach that has historically proven to resolve such cases quickest.
Mark commented: “Protection of the customer relationship is a key concern during early intervention. Most early stage customers who have defaulted on a payment may only need gentle guidance and support to get them back on track. Engaging them with a targeted and empathetic attitude at an early stage can make a real difference, as opposed to taking a more stringent approach with customers further down the line.
“With one single credit management supplier the customer risk is vastly lowered because it removes the natural significant differences between competing recoveries organisations and ensures a consistent and easily manageable customer experience. Cost to serve is reduced too because management costs vary directly with the number of suppliers in the process – fewer outsourced partners means less management, audit and resource costs.”
You can read the article in full here.