How to get personal with borrowers and improve customer loyalty…without investing in multiple high-cost systems

Debt collection software


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As consumers, we’re au fait with hyper-personalisation. Emails filled with unique-to-us offers from Amazon or Uber Eats. Online fashion stores that know our ‘true size.’ And subscription TV that knows that we’ll love that new box set, thanks to machine learning tracking previous browsing experiences.

In Financial Services, consumer lenders and bankers have been championing personalisation for marketing programs, sales opportunities, across cross-sell and up-sell channels, brand advocacy and customer loyalty for quite some time. Yet most lenders, they’ve been slow to adopt a personalisation strategy in collections.

The reason for the blind spot is unclear. Pioneers of personalisation and automation in collections report successful use cases dating back at least a decade. Outcomes include improved collections revenue, productivity gains, better borrower engagement and satisfaction and the elimination of outreach and admin inefficiencies.

Why is personalisation so important in lending and collections

The numbers speak for themselves. 84% of consumers say that being treated like a person, not a number is important to them. In the Millennial age bracket, brand loyalty increases by 28% when on the receiving end of personalised communications and the ROI case has been proven time and time again across marketing programs.

During highly emotive collections processes, customer-centric outreach and engagement should start with personalisation, yet so many lenders are failing to execute this tried and tested lever and humanise the process.

Yet, it’s more than just borrower experience at stake, it’s recovery revenue too.  

Auditing your customer contact strategy

Communications strategies in collections should pull the sort of levers that marketing and customer services use to engage with customer segments. It all starts with understanding your tech stack and the capabilities of your collections software, as well as understanding the data. Some questions to ask yourself:

  1. Are my customer records centralised on a unified CRM system?
  2. Do I record all customer activity in real-time within their record?
  3. Can I report on variables like delinquency status and repayment history?
  4. Do I have free-form fields and status flags where agents can record meaningful data to inform the repayment strategy?
  5. What are the tools I can use to personalise outreach?

Step 1 – Devise a segmentation strategy

Once you understand your system capabilities, it’s time to mine your data and create contact buckets. These can be based on variables like existing balance, risk or revenue impact, date of last repayment or engagement preferences…and so on, or demographic and behavioural variables.

Step 2 – Allocate outreach channels to each segment

Once you’ve defined your segments, you’ll be able to mine your data to understand borrower behaviour. Who engages on digital channels, and requires a mix of agent touch, lettering and flexible payment options. Who are the high-value segments that require agent outreach to drive repayments? Only once you have your channels for each segment defined, can you begin tailoring the message.

Step 3 – Create tailored communications for each segment, per channel

For each segment, and each contact channel, start to build your messaging. At the same time…

Step 4 – …start mapping personalisation possibilities

If you’re still working on a disparate tech stack, you may find varying personalisation capabilities and need to tailor your strategy according to what’s possible. If you’ve already migrated to a cloud CRM, you’ll be able to field-match customer record data across each channel from portal to mail. Think about including basics like name, loan balance and personalised repayment forecasts.

Step 5 – Hyper-personalisation

With the basics taken care of, explore other ways that your CRM data and capabilities can be leveraged to provide hyper-personalised collections messaging. With Financial Cloud, the only limit is your imagination.

Getting started?

Ultimately, if you aren’t utilising personalisation and segmentation in your collections contact strategy, you’re almost certainly leaving money on the table.  

If your systems and processes support personalisation and process automation our recommendation is that you start building a tailored strategy now. Protect your bottom line by making personalisation a priority for the year ahead. If your systems aren’t capable of optimising your collections strategy, it’s time to look at your technology needs for the future. Work out what your near-time investment in digital transformation will be to support future growth.

Want to see Financial Cloud’s suite of products in action? Request a demo now.