Bringing voice collections into 2024

When most people hear the term ‘debt collection’, the scenario of unknown calls and a not-so-friendly voice on the other end of the line quickly starts to emerge. 

There’s no doubt that voice has a part to play in a successful recoveries strategy, but it’s about time to shake off poor outbound calling practices and misaligned incentives tainting the collections industry. Let’s get into exactly how you can evolve your voice collections in 2024.

Misaligned KPIs & incentives

Before digital communication became widespread, calling people to have an open conversation regarding their accounts has always been a viable channel in any collections strategy. It’s how these calls are incentivised that’s the root of the problem, and largely responsible for negative perceptions surrounding the collections industry. 

Being on the receiving end of unknown number calls multiple times a day, horror stories of consumers experiencing harassing or pressuring conversations, and compliance breaches of daily call limits are still all too common. But why?

There’s two key KPIs that can often lead to less-than-ideal customer outcomes. RPC (right party contact) rates, and payment collected. Let’s explain why. 

• RPC rates form the foundation for many voice based collections strategies - this measures the ratio of all outbound calls made against successful contact with the person who owns the account. A common KPI in traditional collections, RPC rates place performance targets around calling people simply until they answer the phone. 
• Once successful contact has been made, the agent is incentivised around negotiating the highest payment possible from the customer, in return for a bonus or commission. This translates to options that may not be affordable for the customer, such as offering only payment in full rather than a payment plan. 

These misaligned practices create persistent calling and pressuring tactics - as they incentivise around making contact and obtaining payment at any cost, irrespective of customer experience or wellbeing. 

To protect consumers from harassment or even aggressive treatment, regulators around the world are continuing to tighten the guidance around collections communications. Only last year in the United States, we saw the CFPB introduce Regulation F which implemented even stricter boundaries for outbound calls, and reinforced its support of the use of digital channels:

• “…a debt collector must not place telephone calls or engage any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass…”
• No more than seven phone calls within seven days is permitted 
• Calls must be made between 8am and 9pm

So what is the place for voice collections in today’s strategy? Omnichannel.

Given the context, what’s the case for integrating voice in a modern day collections strategy? 

Well, customers still want the option. While we’ve gone into detail on how we believe the traditional strategy, measurement and incentivisation of voice to be misaligned and outdated, the truth is, it’s still a viable channel that consumers use.

On average, for every 24 customers who engage with our Customer Experience team digitally (through live chat, email or SMS), one picks up the phone. Even with this rise in digital engagement, it’s still important to support every individual who prefers voice so they can:

• Discuss their overdue account in more detail, for example if the debt is a few years old and they can’t recall the origin
• Resolve the account over the phone if they prefer to speak with someone directly, instead of using digital methods such as a payment portal
• Talk through a difficult financial situation or specific vulnerabilities to explore available support options

The above are just a few of the common scenarios our Customer Experience team encounters daily. In all of these situations, with every single customer, our objective is to create an environment that encourages, supports and empowers.

Using voice responsibly, with the right measurement and incentives for success

To redefine the industry’s historic misuse of outbound calling and improve customer experience, your collections partner should govern their practice with clear principles. This includes:

1. Starting from a place of trust and respect

Before any number is dialled, the priority for every conversation must be building trust and a positive rapport. The goal is to support customers to engage voluntarily, because they feel encouraged and understood - not pressured or shamed. They should feel that the agent is on their side, helping them to resolve their debt in a way that works best for them. 

2. Ethical training and incentivising

Providing the right training and reward programmes for team members to act as allies is a sure method to guarantee customer centricity. Giving agents the confidence to offer solutions and support, without exerting unnecessary pressure can be achieved through healthy incentive structures. For example, we reward our team members based on five-star Google reviews. This ensures that every call is focused on maximising a customer’s experience, which naturally leads to positive conversations and elevated conversion rates, and better consumer outcomes. 

3. Using the data to improve continuously

A focus on continuous improvement is demonstrated by a keen eye for data. Expect your collections partner to build-in a structured programme of regular reviews, bespoke training schedules and 1:1 coaching sessions to support the development of team members. They should look at key indicators such as customer engagement rates, call length and customer outcomes to understand where the areas of opportunity are. These data points can be used to enhance scripting, call flows and training modules to ensure your customers are always receiving a positive call experience.

How technology is changing the face of voice collections

Here’s where voice collections are getting exciting. Using advanced technology such as AI and data science, the channel is being truly transformed. Here’s what to quiz your collections partner about when it comes to taking their voice collections into the future: 

Voice AI

As you can tell, we’re big on the ethical and considerate use of voice in collections - and voice AI is no exception to this. Believe it or not, when used correctly, voice AI poses a safer, more compassionate, and entirely personalised way of calling when compared to human agents. 

Our own use of voice AI is implemented with this in mind. Currently, we use voice AI to create targeted conversations that are designed around specific points of the customer journey. For example, using voice AI to contact customers if their payment plan breaks. 

How does it work? We’ll contact the customer firstly by SMS to notify them of the failed payment, then our voice AI will give them a follow-up call to walk them through why their plan broke, how to set up a new one, and how to maintain their new plan moving forward. In the first week of release, the impact was astonishing - out of those who engaged, 91.9% restarted their payment plan, and 8.1% resolved their entire balance with a full payment. This enables us to support more customers in real-time, and frees up our human agents to focus on more complex queries.

Balancing automation and human intervention 

There’s a fine balance that needs to be struck between technology and real-life conversations. Especially when it comes to supporting customers financially - many will still prefer that little bit of small talk or friendly chat you can only find from a real person.

Any third-party collections provider who is taking advantage of advanced voice capabilities should evidence where and how human intervention steps in. In our case, we’ve programmed our voice AI to transfer calls to a live Customer Experience team member if it detects a request for human interaction or identifies a complex issue. This creates a smooth experience for the customer and ensures that they get the support they need, when they need it. 

Enabling flexibility 

Offering varied payment options in voice collections is essential to improving customer outcomes. Providing customers with the singular option of paying in full simply doesn’t fit the brief. To really set customers up for success during voice interactions, they should be supported with options that work for their individual situation. This can include flexible one off payments, payment plans, or snooze periods. Providing choice and autonomy supports those prone to vulnerability, as payments can be put on hold or adjusted depending on their current position.

Taking voice collections into 2024

Voice collections will always have a place in an omnichannel strategy. As long as you’re closely monitoring how you incentivise agents, it can be both highly effective and supportive for consumers. It’s time to leave the industry’s historic misuse of outbound calls safely in the past, and reconsider the all-important role of voice to foster a positive collections experience.