How to set a clear data strategy for omnichannel collections

In our recent guide to executing an effective omnichannel collections strategy, we discussed the impact of the current economic climate on collections.

Essentially, as 93% of adults in the UK reported an increase in their cost of living between August and September 2022, financial services businesses need to respond to the FCA’s new Consumer Duty that states companies must put their customers’ needs first – and that means having a strategy in place for engaging with customers in financial difficulty. One that doesn’t just ensure they receive the payments they’re owed, but that also safeguards the business-consumer relationship and takes the appropriate care required with vulnerable customers.

What businesses need is an empathetic approach to collections. An approach that offers the human touch where needed, but also caters to those who prefer to use digital channels in their own time. The best way to deliver this balance is through an omnichannel collections strategy.

But to do this, businesses need a data strategy in place that will enable them to tailor their communications appropriately.

So where do you start?

Three essentials for your omnichannel engagement strategy

1. Consider the importance of human touch

In Salesforce’s ‘The State of the Connected Customer’ report, it was found that 83% of customers still expect immediate interaction with a human agent. This is even more important when it comes to circumstances that require complex and specialised agent assistance, or when people need help to solve the debt situation they’ve found themselves in. When times are tough, people need to be treated like people, not numbers, and offered empathy and respect.

In fact, when businesses personalise engagement with consumers, it can increase their chances of that consumer positively engaging in return.

2. Take customer preference into account

In joint research between Sigma Connected and Arum, we found that 69% of businesses capture customer communication and channel preference, yet only 44% use that preference to tailor customer communications.

Put simply, customers are less likely to engage if they’re not contacted on their channel of choice. This means every business needs to make it a priority to communicate with their customers who owe them money in the ways they prefer, which will lead to both better response rates and increased brand loyalty.

For instance, for millennials, convenience and 24-hour availability are key when it comes to customer service. Yet only 7% of over 70s are likely to have the capability to shop and manage their money online. Given the vast differences in preference that these statistics imply, businesses taking a one-size-fits-all, single-channel approach to collections will be far less successful than those that take an omnichannel approach and meet customers where they are.

3. Power your omnichannel approach with data

In order to personalise your communications to match customer preferences, you need to understand what those preferences are. The key to that is data.

Importantly, an omnichannel collections system can be used to capture and store data throughout the collections journey for use in real time.

Not only does this data often inform the next steps when it comes to communication, it also builds a valuable picture of a customer over time – including contact information, credit history, channel preferences, and demographics. Using data around prior communication outcomes with your customers can determine the strategy that is likely to see most success in the future, saving you time and money.

In fact, all this data can enable you to zoom out of individual collection cases to see the bigger picture across the collections journey and different collections channels. So, you can see where certain channels need to be improved, and which channels are most effective at different stages of the collections cycle.

How to create a data strategy for omnichannel collections

Your collections should at this point be informed by a clear picture of data across various channels. But to create a more cohesive collections journey and omnichannel experience, you need to have a data strategy in place to ensure you’re making the most of the data that’ll inform your decision-making.

With this in mind, here are five tips to improve your data strategy:

1. Collect data on all channels

Make sure you are gathering data from all channels and using the same metrics, so it’s easy to compare these against each other. Some data sources for undertaking collections might be:

• Responses gathered from chatbots
• Voice analytics of phone conversations
• Customer satisfaction surveys
• Collections success rate – especially looking at this broken down by each stage in the collections journey

2. Collect data at all stages of the journey

This will help you see your collections success rate at each step from pre delinquency to late collections, and even see which channels are most effective at each stage. For instance, a friendly phone call might work best at the pre-delinquency stage, especially if it’s just a case of a failed direct debit that needs to be corrected. However, a formal letter might work better at the late collections stage when the debt has been referred to credit services.

So, when you combine data about what works best at each stage with what consumers themselves prefer, you can determine exactly the right route to take when communicating with the customer at hand.

3. Automate what you can

Of course, doing all this by hand would be extremely resource intensive. However, automation ensures the data you need to make these decisions is collected in a regular and organised way, e.g. no data duplication from manual entry. And when your data is clean and organised, you can see a representative picture that enables you to drill down to specific information you need, when you need it.

4. Keep data in one place

Or create regular cross-checking reports so you can see the bigger picture across the full collections journey. This is crucial to extracting real, valuable insights from across your collections journey, and applying those learnings to save your business time and money, and help support vulnerable customers.

5. Lock in your privacy strategy

It’s important your customers know how their data will be collected and used to avoid the pitfalls of GDPR. Carrying out Data Protection Impact Assessments (DPIAs) and reviewing your privacy policy before implementing any new data strategy will help you understand the risks and ensure you’re acting in a fair and transparent way. Then, anonymise as soon as you can to take a ‘big data’ approach and gain truly insightful analysis across large data fields and demographics, without going against GDPR.

Let’s get started

At Sigma Connected, we’ve created our Collections Ecosystem to help organisations just like yours take a different approach to collections.

This means we don’t do a one-size-fits-all collections process. Instead, we’ll structure a strategy that works to your strengths, whether that means helping you across the full collections lifecycle, from pre-delinquency to write off, or at specific pain points where extra support may be helpful.

By using data and analytics to gain a better understanding of consumer behaviours, we can help your organisation deliver better return on investment on your collections’ strategy, whilst still delivering a service with empathy and compassion – ensuring your brand is protected and your customers remain loyal.

Find out more about implementing a data-driven omnichannel collections ecosystem here.