It makes sense to look for fresh approaches in light of the difficulties businesses using conventional call-and-collect tactics confront. Companies are forced to think about alternatives to long-standing practices as a result of changing rules, high agent turnover, and difficulty contacting the appropriate people. There are two basic ways to adapt collections tactics for the digital era: integrating digital collections software into an existing strategy or working with a third party debt collection agency offering digital solutions. It’s critical to comprehend the main distinctions between the two options in order to decide which will be the greatest for your business.
Let’s take a look at the pros and cons of each to help your team make a decision
Debt Collection Software
Utilizing collections software has several advantages because it helps seasoned teams build digital infrastructure and provides a wide range of beneficial services.
● Customizable self-service portals
● A/B testing for communication
● Engagement reporting
● SMS and email automation
● Chatbots
● Pay-by-text tools
It is found that using collections software to build a solid digital infrastructure for your team can be highly beneficial. You can engage clients using these tools at their preferred times and through their preferred channels. They can also assist you in reaching clients who favor email and online communication over conventional phone calls.
Compliance support
Companies that offer collections services as software as a service (SaaS) also boast built-in regulations adherence and work to reduce the danger of agent-driven call centers.
Cons
The wide range of performance evaluation and automation options provided by third-party debt collection agency software systems can be extremely difficult for teams without much prior digital knowledge to navigate. Although these tools can be very effective, they can also be overwhelming, resulting in underuse and resource waste. There is resistance to moving collections online at the level of the industry. Despite the potential advantages, call-and-collect tactics are still common, and those who urge change encounter opposition. When disruptive technologies arise, existing businesses frequently struggle to adapt since the very methods that made them successful might be challenging to change.
When using technological solutions for debt collection, caution is advised. These platforms might not have all the solutions to a collection team’s problems. It can be expensive to
integrate only one tool, and having to integrate an additional tool because the initial solution did not include a certain tool might make the team appear to be assembling technology tech stacks rather than a collection approach. It’s also crucial to keep in mind that traditional call-and-collect teams may be rewired to drive incoming phone calls rather than concentrating on the growth of exclusively digital approaches if new technologies are introduced.
Digital debt collection agencies
Digital-first firms provide a more complete solution for debt collection than SaaS platforms. While certain account assistance and insights are offered by software firms, digital debt collection agencies have specialized teams and end-to-end services that can optimize product performance and integrate with digital technologies. Additionally, these firms provide easy onboarding and completely integrated teams, which facilitates speedy startup for organizations. Software platforms, on the other hand, can need greater internal resources to maximize their advantages.
Third-party team support
Digital debt collection agencies support their efforts with dedicated teams:
Product development
Product teams are constantly coming up with new tactics to boost digital performance, such as optimizing onboarding, enabling new capabilities, and enhancing the user experience for customers.
Deliverability experts
Teams responsible for email deliverability increase contact rates on all digital platforms. When opposed to conventional call-to-collect solutions, deliverability data like open rates and click rates become crucial for assessing the performance of digital campaigns.
A scalable email infrastructure is extremely difficult to construct. Businesses cannot just overnight begin sending hundreds or thousands of emails.
Legal teams
Dedicated companies must be licensed and follow the same rules and legislation as conventional debt collectors. This means that to stay current with changing industry regulations, digital-first firms rely on internal legal support and compliance.
Account executives/success specialists
Similar to how they would go for a SaaS platform, account executives act as a point of contact between the creditor and the digital debt collection agency.
Cons
Agencies that focus only on digital debt collection are uncommon. Working with a digital third-party debt collection agency is difficult in large part because it requires learning a brand-new method of debt collecting. There is a barrier to viewing collections through a new lens when conventional call center analytics is no longer meaningful, and your agency partner is prepared to discuss open, click, and deliverability rates.
Digital debt collection firms are progressively gaining acceptance in the market, but this will only happen until existing agencies have experienced the benefits of adopting debt collection software and the difficulties that come with it firsthand.
Digital debt collection is quickly altering the landscape of collections and transforming how collectors deal with customers, regardless of whether your team decides to implement a potent new software platform to assist your internal collections activities or engages a third-party digital-first partner.
