webinar 001 - behavioral economics in debt collection
DESCRIPTION
Behavioral Economics teaches us the psychological, social and cognitive reasons for people and companies' financial decisions. Ever wondered why one customer is late on a payment, while the other isn't? Ever asked yourself why certain phrases and words work with one late customer, but not with the other? This webinar will teach you all of that and more. Learn about: - Why some people pay late, and why they stay late even after reminder. - Common cognitive mechanisms that drive customers' decisions regarding debt, and how to tap into them. - Words and phrases that tap into customer objections and diffuse them. Our experts will lead you through a few use cases and explain how our system identified and responded to customer triggers. You'll be able to easily implement these lessons in your own A/R process and increase your recovery rates. This webinar is ideal for Accounts Receivable Specialists and Billing Managers who are looking to fine tune their internal recovery process.TRANSCRIPT
September 2014
TrueAccord
Behavioral Economics in Debt Collection
• TrueAccord overview (3min)
• Behavioral Economics, and its relevancy to collection (5min)
• Common customer types and how to handle them (20min)
• Summary (2min)
TrueAccord Agenda
• Technology reduces friction
• Adapts to the digital consumer’s preferences
• Data enables extreme personalization
• Preserves customer relationships
• Used by leading tech and lending companies
Reinvent the way debt collection is done
TrueAccord About TrueAccord
“[This] has to be the funniest bill collection I have ever had and it actually made me want to pay.”
- Mike M.
“Nice Service, good payment plans.”
- Krystal V.
“Well, my company owes money, so we can’t exactly say “Rocks!”. But your service is excellent and you have been very accommodating. Your website is simply to navigate and you make it very easy to make payments.”
- Elliot F.
“You guys are doing it so well, that I would love to talk to you guys about my other debts.”
- Tomas C.
What Customers Are Saying TrueAccord
What is Behavioral Economics? TrueAccord
Behavioral economics is a field that examines the way individuals make economic decisions, and the factors that influence those decisions.
• Do we make rational decisions?
• Can our decision process be manipulated?
• What drives our decision-making?
Why Behavioral Economics in Collections? TrueAccord
• Takes the voodoo out of agent driven conversion
• Broadens your toolset and improves conversion
• Cooperation improves retention and LTV
Many of your customers choose not to pay for reasons unrelated to their personal morality. Our detection and classification of the following profiles are proprietary.
Common Customer Types TrueAccord
The frustrated customer has had a negative experience with your product. • Feels cheated by the fine
print • Struggles with a difficult
dispute process • Had a bad service
experience
The Frustrated Customer TrueAccord
Solution: Give them a stage and an outlet for their frustration, then invoke reciprocity. • Allow them to vent • Leverage the debt dispute process • 3rd party involvement helps reframe their
bad experience
The Frustrated Customer TrueAccord
The price sensitive customer is looking to get the most value for the lowest payment. • Often driven by some
dissatisfaction • Definitely not your best
customer • Thinks rationally about
value, but can pay
The Price Sensitive Customer TrueAccord
Solution: Create scarcity and a sense of urgency. • Anchoring in settlement negotiations • Explicitly reducing discounts
The Price Sensitive Customer TrueAccord
The defeated customer has real financial difficulties. • Often on the brink of
bankruptcy, owes money to 4-5 creditors
• Manages by excuses
The Defeated Customer TrueAccord
Solution: Personify the obligation to create a sense of commitment. • Use gender and age matching names
and photos of agents • Sports metaphors especially effective in
the US • Use a “coach” voice to drive to action
The Defeated Customer TrueAccord
The disengaged customer feels that disregarding the problem will make it go away. • Often is young and
overwhelmed • Might be able to pay,
but doesn’t think it’s a priority
The Disengaged Customer TrueAccord
Solution: appeal to their need of social acceptance. • Discuss what others like them are doing • Emphasize the social status in being up
to date on commitments • Call them out as outliers
The Disengaged Customer TrueAccord
• Behavioral economics allows better
segmentation and treatment • A scientific approach helps demystify
agent interaction • We looked at several types and
suggested responses based on TrueAccord’s experience
To summarize… TrueAccord