For a long time, debt collection strategies relied on high-volume phone calls and direct mail to get recoveries. Now that digital channels have become mainstream, the messaging used in collections content has changed. Aggression has been traded in for empathy, and modernizing your collections outreach is about more than using email or text messaging.
Debt collection messaging needs to align with consumer preferences, maintain strict compliance and adopt the optimal tone to be more effective. To get the most out of digital debt collection, you’ll need a guide to creating compelling content.
Why Consumers Ignore Some Debt Collection Messages
The process of understanding why some consumers don’t engage with certain debt collection messages is key to optimizing your recovery strategy. Many consumers aren’t ignoring outreach out of spite or bad intentions, it’s often because the messaging strategy isn’t taking the right approach. Modern debt collection messaging needs to align with consumer preferences to have the best opportunity of being effective.
- Choosing the Optimal Channel: Even the best debt collection message needs to be sent through the optimal channel to reach a consumer. With an omnichannel approach, businesses can select the channel that meets each individual consumer’s preference.
- Make Account Details Easy to See: It’s important for collection messages to give consumers an easy and clear way to view their account details. Along with empathetic messaging, this often helps consumers feel more in control of their situation, which can improve recovery rates.
- Collaboration Over Aggression: It’s important for modern debt collection messaging to frame the process as a collaborative effort as much as possible. Consumers who feel more understood instead of being pressured by the message are more likely to take action.
3 Key Pillars of Modern Debt Collection Messaging
1. Lead with Empathy Over Aggression
The aggressive language that was popular in debt collection for years is no longer the right choice. Modern debt collection messaging should frame the conversation as a collaborative effort towards resolving a financial obligation instead of threatening or issuing an ultimatum. Here’s an example that showcases the difference between these approaches:
- Avoid Messaging Like: Your account is past due, if you don’t pay now we will take legal action.
- Adopt Messaging Like: Financial challenges happen, we’re here to help you explore options that fit your budget.
2. Prioritize Offering A Frictionless Experience
One of the primary goals for digital debt collection messaging is to create a frictionless experience for consumers. Recovery messaging should be empathetic and provide the option for consumers to resolve their obligations through a self-service portal. It allows consumers to resolve matters on their own terms without speaking to a human agent, which can cause uncomfortable feelings for many people.
3. Implement Branded Messaging That Resonates
With the rise of financial scams and spam messages, it’s even more common for consumers to be hesitant about unfamiliar correspondence. Since many scams rely on forcing urgency, debt collection messaging should be more approachable, especially in places that serve as first impressions like email subject lines. Businesses should also include branded elements such as logos, call-to-action buttons and personalized information to add authenticity to collection messages.
Collection Messaging Should Change Based on the Delinquency Stage
Modern debt collection messaging should change based on which stage of delinquency the consumer you’re talking to is in. For example, a consumer that’s less than two-weeks past due could respond well to an empathetic and gentle reminder. While a consumer who’s over 30 days delinquent might prefer a more collaborative approach that presents them with options on how to move forward.
The communication channel being used also plays a factor in how messaging is used for various delinquency stages:
- SMS / Text: Offers faster visibility and in most cases has an 160 character limit per message. It’s a great channel to include payment portal / self-service links.
- Email: One of the best channels for breaking down account information or clearly outlining settlement offers (when applicable). Subject lines represent a great opportunity to foster engagement from consumers.
- Phone Calls: Traditional phone calls with human agents are often used for more complex cases and consumers who prefer speaking to a human.
Improve Your Recovery Rates with Digital Debt Collection
If your business is looking to improve recovery rates with modern debt collection messaging and strategy, Retain can help. Retain white-label debt collection software helps optimize engagement across accounts to create a consumer-centric experience. Contact our team today to learn more about how we can help advise your business on modern debt collection messaging.
