You'd Be Well Advised to Uber Your Business Before it Gets "Kodak-ed"

This article is part of the iA Think Differently series. Written by members of the iA Innovation Council, the series showcases thought leadership in analytics, communications, payments, and compliance technology for the accounts receivable management industry.

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"Uber your business before it gets Kodak-ed."-ANONYMOUS"

Here is what we know for sure, the collection agency of the future will not look like today's collection agency. Heck, it won't look like the collection agency of 2019 thanks to COVID-19. Who knew we could effectively have collection agents work from home? There will be short-term and long-term changes like the ones mentioned in Amy Perkin's article "Immediate Collection Strategy Solutions for the Impacts of COVID-19". Change is nothing new for debt collection agencies because we have always been evolving. Looking at the history of debt collection shows us this is true.

Collection agencies used to be local with door to door collection agents and most used index cards to track their accounts. Once American households readily adopted landlines, we saw a change from local collections to regional call centers and the use of phone calls as the primary way of communicating with consumers. We evolved once again by using computer collection systems, dialers, analytics, and the explosion of mega call centers. So, you see, the collection industry has always been changing and evolving and now is no different. What has changed is the speed of change, an unwillingness to act without certainty (regulatory approval), and consumers now controlling their communication preferences.

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There are countless articles about right party contacts dropping, price compression, increasing litigation costs, and regulatory changes driving market uncertainty. These are real, and they are our reality. What we don't see in debt collection are a lot of articles on listening to what consumers are telling us and then giving consumers what they want. This consumer focus is happening in every industry, but not ours. Other industries have figured it out, "All things being equal, the customer will gravitate toward the option that is easiest to use."^[1]. 

In debt collection, if you say you are an organization that embraces technology and you are comparing yourself to your competitors, you are missing most of the technology that consumers are demanding. The technology that makes it easy for them. Some of these include, in no particular order:

• 24/7 365 days responses to their inquiries
• The ability to communicate on a channel of their choice
• The ability to switch channels multiple times during the same conversation
• Authentication that happens only once, ever, for that consumer
• Self-service for everything;
  • Payments including the ability to change payment dates and amounts
  • Dispute handling including validation within seconds
  • Updating information especially communication preferences
  • The ability to tie a payment account to their account where the payment will not run until the money is available, and
• Continually updating information.

In other words, they want everything that makes it convenient for them to do business with you. "People are more powerful, skeptical, and impatient today than they've ever been. They want what they want now through the device they have at hand now. People are extremely demanding these days, and it's only going to get worse."^[2] We have not given the consumer a reason to engage with us in a meaningful way because our communications tend to be one-way. Therefore, we need to start thinking about engaging in a two-way conversation that is no longer dependent on the consumer either answering our call or forcing them to call us.

Nowhere on the list above do you see consumers asking for a better way to be called. If you call a consumer and they do not want to talk to you, they not only have the option of sending you directly to voicemail, they can block your phone number forever and report it to their phone carrier as a robocall. This is assuming that your incoming call is not labeled or blocked as spam. How is that for consumer control, as in the consumer has the control, not the other way around. Yet the industry still believes that this is the best way to collect. We have to change, and we have to change today.

For years we have been afraid to take risks. We have become so fearful of losing what we have that we continue to hold on to the ever-shrinking piece of the pie. COIVD-19 is going to put some agencies out of business, which should be a wakeup call that it is time to do something different, rather than continue to do what we have always done. What we need to do today is fundamentally shift our business to be more consumer-focused. We can do this if we choose. Look what we did to get our employees the ability to work from home. Talk about risk-taking! It was also innovating and problem-solving like we have not seen for a very long time. We need to take this experience and now focus it on being consumer-driven with real innovation. This will not be easy.

We will get sued. We will have regulatory scrutiny. This is nothing new, and we are already well equipped to deal with it. We may, however, get sued less because a consumer does not go searching for a way to stop the calls and ultimately finds a plaintiff lawyer instead. We may also have fewer consumer complaints because they were able to solve their financial problem on their own. If we treat consumers the way they want to be treated and engage with them the way they want to be engaged with, then they will have less of a reason to want to sue us or file a complaint.

Today, more than ever, we have a chance to change and become consumer-focused before we cannot reverse the decline, and nothing can save us. The good news is we are not alone, and we do not have to do this by ourselves. We have thought leaders like those found at insideARM and its very fortunate members, like Joann Needleman, who is freely providing her time and thoughts on next steps with content like "Your Website, Your New Normal." There are countless others out there that can help us, but we also need to be listening to our consumers and be willing to take risks for them.

The wave of accounts that are coming cannot be serviced by debt collectors alone, and consumers today will not pay you if you don't engage with them the way they want to be engaged with. The organizations that will not only survive but thrive will be the ones that take risks to give consumers what they want. Those will be the organizations with a long-term future.

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^[1] The Convenience Revolution: How to Deliver a Customer Service Experience that Disrupts the Competition and Creates Fierce Loyalty by Shep Hyken

https://a.co/31gJlsh

^[2] https://gerrymcgovern.com/books/top-tasks-a-how-to-guide/read-the-first-chapter/

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The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2020 members include: