In these challenging economic times, many Canadians are struggling with higher costs of living, aggressive interest rates, and skyrocketing inflation. Recent reports from Equifax show that total consumer credit card balance had a year-over-year increase of 15.3 per cent and crossed $100 billion for the first time. With these financial pressures squeezing many Canadians wallets, economists predict payment delinquencies will rise, with collection volumes potentially ramping up in 2023. What might happen during this economic downturn if your organization is already experiencing difficulty collecting debt from elusive customers? To collect on delinquent accounts, having up-to-date contact information on your customers is critical because:
- It can help provide your business with insights knowing that you are within purview to collect
- It can help re-establish contact with dormant accounts and help improve your contact and recovery rates
If your organization is struggling with skip tracing, here are three ways a good contact strategy can help improve your collections efforts.
- Maintain the lifecycle value of the customer relationship
Many customers in collections may be good customers with a temporary financial challenge. They are still your customers, and it’s important to protect your brand reputation and strive to maintain a beneficial relationship with them. With the cost of acquiring a new customer exponentially higher than customer retention, losing your customers to the competition is not a profitable long term strategy. Accurate contact data may help you maintain a positive customer relationship by helping you:
- Verify and update contact information for your existing client base to help activate dormant accounts, re-establish customer contact, and solicit existing customers to collect on outstanding debt
- Understand the communication preferences of your customers, by understanding when and/or how they want to be reached (i.e. phone call, email, text)
- Help reduce returned mail and internal manual research efforts
You may be in a situation where you receive more than the usual amount of returned mail. Ensuring that you have the most up to date address on your delinquent customer can help reduce the cost of initial or additional postage and handling times. It may also minimize the strain on internal resources, eliminating the need to manually look up addresses for returned mail.
- Automate skip-tracing processes
Data quality, accuracy, and file completeness have always been key components to any collections strategy and manual activities to research customer contact information are costly and time consuming. The automated collection of accurate customer contact information may help you:
- Decrease internal costs to verify contact information while increasing performance. You may reduce the time it takes to locate your target audience, thereby effectively managing your financial resources.
- Save time and money by automatically uploading contact data in your predictive dialer programs, which will allow your call centre to operate in a highly efficient manner
Debt collection can be challenging, especially during difficult economic times, so a comprehensive solution to improve your customer contact rate is critical. Contact us today to learn how we can help you build a strategy to locate delinquent customers and maximize your debt collection efforts.
This article is published by Equifax Canada Co.® 2023. All rights reserved. No part of this article may be reproduced, copied or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior permission of Equifax Canada Co. This article is for informational purposes only and is not intended to be legal advice.