ReachOut

The challenge

The coronavirus pandemic triggered financial difficulties for many people, with larger numbers than usual falling behind on their bills, particularly utility bills.

Communication is key when a customer is struggling financially, as often the situation can be discussed and resolved before it spirals. But, unfortunately, it’s not uncommon for customers to feel overwhelmed by their debts and to avoid attempts by their supplier to reach out. They stop making payments and don’t reply to emails, letters or phone calls – they become unreachable. At this stage the debt is usually passed to a debt collection agency. For most businesses, the number of unreachable customers has risen since the pandemic hit.

With the huge knock-on effect of the first lockdown on many customers’ finances, our client put a pause on escalated collections strategies. When that pause period was over, instead of simply resuming their full collections strategy, they wanted to do the right thing for their unreachable customers and looked for a different solution to re-engage with them and to offer a more supportive path.

The solution

ReachOut is a unique new service from Sigma Connected, which, through open and honest conversation, helps customers struggling to pay bills, guiding them to charities best placed to support them with financial, mental, emotional and physical wellbeing, or through crisis, as well as raising awareness of the support our clients offer their vulnerable customers and helping them to access it.

Sigma developed the service when it recognised there was a stage missing in the collections process. Customers need a third party, a friendly ear who is totally impartial, to step in with support before the debt goes to a collection agency.

Sarah Henry said: “ReachOut is a totally safe, non-judgemental and confidential space, where friendly and approachable ‘Pathfinders’ contact a previously unengaged customer and just listen. Once they understand the customer’s individual circumstances, they can offer support and guide them towards taking the first achievable steps. There are no average handling time targets and definitely no collection targets. It’s never about the payment, as it’s not a Pathfinder’s job to resolve the debt – it’s to reassure customers and guide them to whichever organisation is best placed to help”

ReachOut works with customers over a period of 10 working days, starting with a letter inviting customers to get in touch.

Our client was keen to pilot this new service and, from being given the green light in June 2020, the pilot was ready to roll out just four weeks later.

The result

The pilot was incredibly successful, with 23% positive engagement from those referred over eight working days and many of these customers having now repaid their debt or being put onto a repayment plan. Many were also connected with charities such as the Samaritans, StepChange and MIND. This holistic approach supports people with their underlying causes for debt, improving long term outcomes and their ability to manage all debts.

Importantly, our clients’ customers were happy with the outcomes too:

‘I have just spoken with one of your agents and would just like to say that they were very polite, friendly and very helpful, put my mind at rest and gave me very good information’. (Energy Customer)

‘Today I have spoken with an agent in regard to my partner’s finances and arrears (with his authorisation) and I just wanted to take the time to email and say I am so, so, so happy with the support and help I received. They were so understanding and comforting and I really felt a weight off my shoulders. They are a credit to your company’. (Energy Customer)

Following the pilot, our client signed a two-year contract in early 2021 to continue offering the ReachOut service to customers struggling with problem debt.  The results go from strength to strength with 25% of customers, who previously couldn’t be reached, now back in touch with the energy provider.

Our client told us: ‘Since the start of the pandemic, we have put in place a number of measures to work with people in financial difficulties and to find the best way forward that prevents their debts from escalating. We have been impressed with the results of the ReachOut service in supporting our more vulnerable customers and are pleased to include it in our already award-winning customer service offering. We want to give our customers as much support as possible in these hard times.’