Are you ready for customer friendly debt prevention?

If customers not paying their bill on time is your organisations trigger to help customers about their payments, then this article is for you.

Customers are increasingly looking for empathy, flexibility, digital (preferably mobile phone centric) solutions that enables them to solve their issues.

Importantly, many customers want discrete solutions with known outcomes that do not involve talking to someone and having to share, what can be, very personal and sometimes tragic stories about their life in the hope they get some leniency from the company they're with.

Read on to learn more about how you can retain what works today and implement new activities to deliver more customer friendly debt prevention tools that can have a positive social impact - as well as meeting the organisation's revenue expectations.

First, let's talk about why is debt collection used so widely

Debt collection is widely used by businesses because it is an easily understood, widely used and cost-accepted process for recovering outstanding debts.

Note that we didn't say it is cost-effective, just that it is cost-accepted because it has been around for so long all levels of the business know and accept it's 'just part of doing business'.

But customers being in debt is incredibly costly for everyone - not least of which is the customer themselves.

No compan want customers in debt collection, and even fewer customers who want to be called and followed up by debt collection companies.

What triggers debt collection?

Non-payment of bills over a period of time, and usually after several rounds of follow-up letters, sms's and phone calls by the company to which debt is owed, is what triggers the engagement and use of debt collection companies and their teams.

Some companies that engage customers for debt collection purposes Some companies are forgiving when customers go to the effort of calling to explain why they can't pay; lots of effort for the customer.

"You know you're just saying whatever you need to, coming up with a good tory, coming up with anything to tell the person calling you to get them off the phone and kick the can down the road. That's why HelpPay is good - I can get help from mum and dad before my bill is due and I don't fall behind."
Andrew, a HelpPay user

Debt collection is now a game of inches

Debt collection in Australia is a finely tuned industry, with approximately $1.8bn referred to debt collection agencies each year. To improve return rates for businesses and customers, new technologies are being developed that try to better understand a customer's ability to pay before contacting a customer in order to be more targeted, save money, and increase the likelihood of some form of payment.

As successful as debt collection may be for companies, at HelpPay we're asking the Australian business community one very simple question: Innovating what's always been done assumes the same starting point, what if there is a better way?

From an early age, we are encouraged to take actions that prevent or limit problems in the future. We eat healthy food to stay healthy, wear sunscreen to prevent sunburn and look both ways before crossing the street. 
So, when it comes to customer debt, is your business taking actions to prevent it from happening in the first place during a customer's tenure, or is it still focusing on chasing and collecting debt after the fact?

The challenges with preventing debt, using traditional methods

We have decades of experience servicing and working in large businesses in Australia and we have spoken to hundreds of CEO's, CFO's and debt teams about the challenges of identifying customers before they get into debt and offering them assistance.

There is an almost uniform set of opportunities that come from improving the prevention of debt accumulation, which leads to debt collection, and equally a virtually unanimous combination of challenges to implementing new activities. The top challenges business leaders tell us they face are a combination of targeting smarts, budgeting for an unknown amount of help, and offering customers assistance that haven't yet shown the traditional signs of needing assistance.

So what's the alternative?

What the Australian business leaders we have spoken to tell us is needed is a way for customers to have options in addition to existing methods that customers can discretely choose to use if they want to, that enable different levels of direct or self-directed assistance.

All the leaders we've spoken to say that providing customers with options ranging from traditional 'in-bound' contact where a customer speaks with staff and explains the reasons for asking for payment flexibility through to digital options where the company provides flexibility but may have no direct contact with a customer are all options that are needed in today's operating environment.

Customer-centric Debt Prevention

When debt prevention is done right, it not only improves customers' experiences and interactions with the businesses they choose to be with, it reduces brand and reputational risks as more customers pay on time. With more customers paying on time, everyone is happier as:

• There are fewer customers to follow up with for missed payments.

• Fewer customers end up owing large amounts of money to companies.

• Fewer customers are experiencing significant financial anxiety and stress as a result of owing businesses hundreds or thousands of dollars.

• Fewer customers reach the debt collection stage and are contacted by debt collectors.

• Customers don't learn to avoid calls, emails, and sms from the company reaching out,

• Customers have more options to choose how they get the help they need to avoid falling behind on bills.

• The experiences customers do have with brands are more positive and for more positive reasons.

• Business leaders see a reduction in outstanding debt, less expenditure on calls, sms, and letters to customers to pay on time, and improved cashflows,

• business with the satisfaction of knowing they are acting in a more socially conscious, empathetic, and pleasant manner toward their customers

Could your business benefit from more customers paying on time? 

HelpPay can help almost any company in Australia with debt prevention activation with its patent-pending world-first technology.

HelpPay is a 100% Australian owned company focused on making helping easier. Anyone can download HelpPay's app for free, enter some information about their bill(s), and share the link provided by HelpPay's app with friends and family to assist them in paying off their bill.

The HelpPay Promise ensures that money received to be paid towards a bill only ever goes to pay that bill. Best of all, the HelpPay app keeps track of how much has been paid, so when the full amount owed has been paid, it stops accepting payments, providing peace of mind that bills can't be overpaid.