Multi-Channel Communication is Our Future – Drive Yours With These 5 Strategies

This article previously appeared on Ontario System's blog and is republished here with permission.

Traditionally, financial services organizations including the third-party debt collection industry have been slow to adopt technology that enhances communication with consumers. Complex and conflicting federal laws make letters and phone calls a crutch, and fear of lawsuits tend to cripple even the most savvy businesses. But consumers are demanding change, and it is time for the industry to step up its game.

According to Christoph Bene, Managing Director at Brock Capital Group speaking to Forbes, the ARM industry needs to take note:

“Fifty years ago, debt collection agencies relied on annoying phone calls and form letters sent through the mail to encourage people to pay their past due accounts. Today, with the ubiquitous use of smart phones, texting, email and social media, the debt collection industry… still mainly relies on annoying phone calls and form letters.”

Ask a millennial, and you will learn they could not agree more. Younger generations opt for a digital form of communication before answering a phone call. They will read many tens of text messages before listening to a single voicemail. They will visit a website before placing a return call to a financial services organization. They will chat before shooting off an email. And the very last thing they will ever do is write a letter and drop it in a big, blue, metal receptacle at the end of a driveway – the mailbox. In short, they will exhaust every form of person to person avoidance behavior before engaging in a phone conversation with a live person.

Equally significant is the fact users of one or more types of digital communication channels are more likely to engage using other media channels than those who avoid digital technology altogether. For example, those who use text messaging to communicate are also more likely to use the web, IVR or email. This means once you engage with a consumer digitally it’s more likely the consumer will employ the same or similar types of communication channels to communicate with you in the future.

So how do we evolve our business strategies to meet these new consumer communication preferences? The answer is simple. Use a variety of communication methodologies to meet the needs of your consumer population. Doing so means considering the following:

1. Multi-channel communication systems – If you have ever worked in education or marketing, you know adult learners do not all learn alike. Some prefer to read, some prefer to listen – It varies upon the person and the generation. But make no mistake, a single communication system will no longer reach all the consumers we need to reach for effective debt management. We need to provide options that meet people at their convenience and preference.
   
   
2. Integrated contact management – Siloed communication systems, at least in the world of financial services, have become dinosaurs. To effectively communicate with people and manage their preferences in terms of time, place and manner, we need integrated contact management systems that tie to an agency’s software and provide accurate and holistic information to the debt collector about each consumer’s behavior.
   
   
3. Individually-tailored communication – Combining analytics with Big Data will determine the best way to engage a debtor, as opposed to just addressing a general demographic category. Leveraging those sources of information means the ARM industry would be able to select the most appropriate mode of communication, the wording and tone of the message, the best time of day and frequency to engage, and even the type of payment options offered.
   
   
4. Intelligent rules engine – ARM operators today need rules engines that not only follow new collections rules and regulations, but also track and update changes in real time. Rules engines not only drive effective, compliant consumer communications, they help collect money.
   
   
5. Website as Communication Management Hub – Most debt collectors have websites, but few know how to employ one as a tool to manage consumer communication preferences. At minimum, a robust website should provide consumers with information about their rights under the law; a place to register complaints; a way to request documentation about the debt; a page to grant and revoke consent to dial, text and email; a portal to manage communication preferences, settlements and payment arrangements; and of course a page to authorize and make electronic payments.

Consumers are not the only ones demanding a menu of communication options to manage their debt. Regulators are working with industry groups to help companies better understand how to enhance consumer communications using a menu of technology driven communication channels. Do not be left behind. Take steps now to employ a multi-channel communication platform designed to meet the needs of your consumer population.

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Interested in learning more about this topic? Watch the replay of Rozanne Andersen’s webinar New Channels, New Tactics: Improving Performance with New Consumer Communication