“Collections is a service; if we can get that message across in a friendlier way we could drive a lot more engagement.”
– Flexys Refreshing Collections Podcast
Across the board, customer expectations are rising. When it comes to the water sector, those expectations are already formalised in the Ofwat Service Incentive Mechanism (SIM). As SIM is replaced by C-MeX, and satisfaction rates compared across other services, the pressure is likely to rise. With PR19 constraining budgets, water utilities are looking at every opportunity to extend the value of resources while improving and modernising service levels and consumer satisfaction.
As a result, forward-thinking organisations are innovating across customer services in advance of enhanced scrutiny and the debt collection function of these businesses had a significant part to play. The very particular relationship between water suppliers and their customers, and the regulatory obligations that apply, bring their own challenges and no more so than in collections. Being in arrears, with the associated anxiety and negative feelings it brings, raises the emotional stakes of the customer relationship, creating a tension that can become counterproductive.
There is often the preconception that the debt collection process will steamroll over personal difficulties and won’t offer any flex to those who feel defeated by their circumstances. Many organisations are taking a proactive, transparent approach to removing barriers, starting with making the disclosure of difficult circumstances as easy as possible. For example, customers may contact the ‘payment enablement team’ or ‘escalated care team’ in place of the ‘collections and recovery team’. If changing the terminology results in higher engagement, especially with hard to reach customers, it will prove worthwhile. Going further, if suppliers can remove the necessity (without removing the option) to talk in person, which remains a significant blocker for many people, the chance to resolve debt or disclose circumstances becomes easier for a wider cohort, including but not limited to, vulnerable customers.
Technology as a supporter
As well as the changes to external messaging, the collections process itself is evolving towards a more cost-effective, convenient and streamlined experience largely due to digitisation. In particular, this means making engagement as easy as possible using the channels customers know and prefer while making sure that those channels are accessible, flexible and low friction. The complexity of customers’ financial and social circumstances should be reflected in a multi-option, personalised experience that delivers a fair outcome based on what is known about the customer. Moving forward, each successful encounter improves the chances of further engagement, if and when that becomes necessary, as well as reducing frustration and raising satisfaction levels. The dividend for digitally-excluded customers is less competition to get through on the phones and less time pressure on agents fielding calls.
Moving beyond the average customer
In collections, the concept of the average or ideal customer is becoming less relevant. In a world of personalised services, it doesn’t help if a customer receives irrelevant, untimely, outdated or inflexible communications. Given that many debtors have more than one creditor, they are likely to pay the ones that get the message right and make it easy to engage.
Personalised service is now so common, think Amazon, Uber, Deliveroo and Google, that customers are used to things working specifically for them and barely notice it, but they do notice its absence. There is no reason why the water sector cannot benefit from a similar segment of one service model. As expectations rise, collections will need to be more dynamic and less dependent on creating stagnant segments that don’t reflect the changeable nature of modern life. Supporting technologies like machine learning are going to extract infinitely more value from existing data and more importantly, continually optimise outcomes as it learns from every encounter.
Debtors as advocates?
Is it realistic then, to expect debt collection services to positively influence net promoter scores? Can consumers in arrears be converted to advocates through an innovative and inclusive service ethic? The strongest and most enduring recommendations come from circumstances where difficult and sensitive situations are accommodated, respected and rectified and these situations are commonly found among those customers in economic or social difficulties.
It may constitute a relatively small section of all customers but one that rightly has an amplified and powerful voice and is sharply in focus amongst regulators across every industry and sector. Plus, it’s simply the right thing to do.