Giving vulnerable customers the best experience

According to a Financial Conduct Authority (FCA) study, approximately 25 million vulnerable people live in the UK. However, as the pandemic moves into calendar year three and the cost of living soars above wage increases, 2022 will create more first-time debtors than ever before. In unfamiliar territory, people new to financial struggle may be unsure what to do or where to turn.

We believe businesses could rethink their collections strategies to reach and support customers who owe money. All companies have a moral and regulatory obligation to treat customers fairly but that doesn’t mean bearing the financial burden. The key to getting the balance right comes from understanding the root of customers’ problems and working with them to find solutions.

How COVID-19 created more vulnerable customers

Data from WHO and World Bank suggests that the pandemic has forced half a billion people into extreme poverty.. In the UK, add to that the rising cost of living, which increases the average family’s household costs by a staggering £1,700 a year, and businesses could find themselves managing an unprecedented number of unpaid bills each day.

Unfortunately, getting customers to admit that they’re struggling financially isn’t always simple. People might be hesitant to disclose the reality of their situation to service providers as they deal with feelings of embarrassment or denial. Subsequently, customers may cut off communication, making it trickier to reach a solution.

Not every customer is in arrears for the same reason, though, so it’s crucial to understand where each person is coming from. Think of it as two categories: the ‘can’t pay’ and the ‘won’t pay’ customers:

• Can’t pay: ‘Can’t pay’ customers are genuinely vulnerable and need help. However, because they’re potentially unwilling to discuss their financial situation, it can appear like they’re refusing to pay.

• Won’t pay: ‘Won’t pay’ customers don’t have any intention of paying bills, even when they have the money. In some cases, these customers falsely claim that they’re struggling financially as a way of delaying the payment further.

The trick to distinguishing who fits into each category is by discovering the cause of the late payment. Read on to learn more about how we identify and help the people who need it the most.

How we help vulnerable customers

1. Different methods of contact

When it comes to delivering excellent customer experiences, one size does not fit all. For example, whilst older customers prefer phone calls, Gen Z (1997-2012) is more responsive to digital communication methods.

But, with customer interactions subject to increasing regulatory oversight, businesses can slip into an overly formal tone to meet regulations, regardless of the chosen communication channel. For customers in a crisis, formality could be misinterpreted as a lack of care, driving them further away.

Keeping the customer relationship in mind, whether posting a letter, making a phone call or sending a text as well as not making all communications about money will help reveal what methods work best for customers. Once the customers’ preferences become clear, they can be used to learn more about the situation.

2. Asking the right questions and working with customers

We find that one of the best ways to uncover the true situation is to ensure the advisors know what signs of vulnerability to look for and what questions to ask. The advisor should use the responses to dig further — respectfully — and find a solution for the customer.

The BRUCE model could help in certain circumstances:

B — Behaviours and talk

R — Remembering

U — Understanding

C — Communicating

E — Evaluating

Once it’s clear that the customer is in the ‘can’t pay’ category, the advisor can help get them back in control of their situation. The most effective solutions may not lead to instant payments but they could lead to long-term customer loyalty and an outstanding reputation.

3. Offering specialist support

Knowing how to handle vulnerable customers is easier said than done. It requires specialist training and skilled advisors. But, with talent shortages forcing companies to pay a premium for the best workers and training being a time-consuming process, it’s not always ideal to build your customer service team in-house.

Instead, sharing the problem with a collections and vulnerable customer management specialist like Sigma Connected may be your best bet. Partnering with a dedicated team who knows customer service inside and out offers a fresh perspective on your challenges and enables you to maintain control over the process at a lower cost.

Plus, Sigma Connected provides the award-winning ReachOut initiative for the most vulnerable people — a one-of-a-kind service that goes beyond traditional debt collection and gets customers constructively engaged with your business. In fact, two in three people reconnect with organisations using the ReachOut programme and work together to resolve their debt.

Build customer loyalty with empathy

Sadly, the ongoing pandemic and rising cost of living have created a formula for financial hardship. Now is the time for businesses to focus on empathy and helping their customers. Failure to do so could cost you your loyal customer base further down the line and can damage brand reputation.

For the best result, companies should consider outsourcing to an experienced customer service provider that can take the strain away during this difficult time. A dedicated partner lets you focus on other crucial activities knowing that the customers’ situation will be handled appropriately and sensitively.

Deliver excellent customer service with Sigma Connected

At Sigma Connected, we believe everyone should be treated with respect.

We understand that every company’s needs are different and will vary over time as your business and customers’ needs change. As a result, we adapt quickly and work flexibly to meet your needs. Want to find out more?