With a series of cost of living hits landing, it’s hard to underestimate the impact on customers already raw from their experiences through the pandemic. Their financial resilience may be stretched to breaking point by additional tax and interest rate rises on top of energy price cap changes and the highest inflation rate for thirty years.For some, that point has already passed.
With affordability issues expanding significantly and rapidly, there are a number of pressures building on utility collections teams that, cumulatively, present a risk to revenue, customer service and regulatory compliance. These challenges will have the most impact where teams lack the tools to monitor, predict and manage pre-delinquency and early arrears, and where they are forced to fall back on a singular debt management process that lacks a differentiated, personalised approach.
For these collections teams working on the back foot, engagement will be heavily inbound and heavily agent dependent. This can force an overdependency on third party agencies as internal teams struggle to deal with high volumes using primarily manual processes.
- Mass cancellation of Direct Debits as customers try to hold off the price increases.
- A large and prolonged spike in inbound engagement.
- Previously sound arrangements breaking under pressure. These will need to be revisited, perhaps more than once.
- The danger that vulnerable customers will be inadvertently exposed to detriment.
Collections managers are looking for prompt measures to alleviate the pressure including harnessing technology to automate processes efficiently, managing customers proactively, and investing where the real expertise and commitment lies – in their internal debt management team.
Blockers to effectiveness
- Web pages or chatbots that don’t lead anywhere meaningful and can’t respond dynamically to information (submitted by customers or received from other systems or data sources) in real-time. Fed-up customers bounced back to the phones, work ultimately falls back on to agents.
- Lack of self-serve options to take advantage of the recent digital uplift and empower customers (including those experiencing indebtedness or vulnerability for the first time) to manage their own situation early on, making the process independent, low-stress and convenient.
- Lack of clarity, usability and freshness of data that causes actions to be poorly informed, inconsistent or based on generalisations, potentially exposing the organisation to regulatory penalties and negative publicity. Data that can’t be used creatively to model outcomes, leaving teams struggling to test new strategies quickly and operating behind the curve.
Help customers to help themselves
To take the engagement initiative, it makes sense to pre-emptively push out personalised and appropriate digital journeys to preserve capacity and improve operational KPIs. Self-service will also instantaneously extend customer service hours to 24/7/365.
Previously regarded as low-risk customers, Direct Debit payers vulnerable to cancelling will need to be swiftly identified and managed proactively using smart data analysis to identify those at risk of affordability difficulties.
Bolster the safety net
Where agents are performing standard tasks and manually filling forms, let automation take the strain to free up agents to dedicate their time to more complex cases. In addition, make use of digital Support Journeys that augments efforts to identify customers in difficulty or vulnerable circumstances, especially those who can’t speak comfortably on the phone.
Stay relevant to customers
As economic circumstances evolve, ensure that systems can continually respond and adapt to new information in real-time – whether that’s a change to customer circumstances, evolving Regulator guidance, Government intervention or business requirements. Make every engagement with customers timely, relevant, appropriate and of value, and leave them feeling impressed with the level of service they receive.
Pivot on a pinhead
Now is the time to equip your collections team with the ability to innovate and implement changes rapidly as the economic situation develops – with today’s technology, that means in hours and days, not weeks or months. This will enable you to anticipate business, regulatory and customer requirements, and to rapidly build and test strategies that manage them proactively, changing and adapting as often as is necessary. If changing your collections system is like turning an ocean liner, it will be difficult to implement changes in time to meet the challenges head-on.
*Flexys digital hardship journey delivered within one week
- Abandoned calls down from 30% to 2%.
- Engagements averaged 100 per hour, peaking at 280 per hour.
- Engagement across the whole 24hr period with 25% occurring outside normal opening hours.
- The Flexys solution processed a high volume of customer requests, corresponding to 20-30 FTE.
- Digital journey completion rate 73%.
- Requested changes delivered through to production within two days.
To find out how Flexys can help you to transform your collections operation and prepare for this difficult year,