[Editor’s note: This is a guest post from Shaun O’Neill, President of Concord Servicing Corporation. Founded in 1988, Concord is a world-class financial technology company, delivering innovative, flexible, and scalable portfolio servicing solutions to meet the demands of loan originators and capital providers (and their customers) in multiple asset classes.]
A recommendation that collections and customer service “should be two sides of the same coin” is currently gaining momentum in the pandemic era. But this approach was advocated fully two decades ago by none other than LendIt’s own Peter Renton.
In a previous life he owned a printing company that sold products to credit departments and he had long advocated the need for consummate customer service. His key recommendations tied to bill-collection policies appeared in a January 2001 article in the prestigious Editor & Publisher magazine.
In part, his bylined article states: “In this dark morass actually lies a wonderful opportunity to turn debt collection into a customer-relationship-building program…this opens up the potential to generate some unexpected goodwill.”
The article continues: “…there’s a big payoff, literally and figuratively, for debt collectors who view themselves as customer-service representatives…Instead of a typical collection call, take the initiative to be empathic.”
To drive home the point about win-win, Renton suggests a discussion that asks the question: “What can we come up with together that will satisfy both of our cash-flow concerns? While you have the customer’s attention, attempt to extract a commitment from the customer to a mutually agreeable future payment framework.”
In a nutshell, this is how debt collection strategies are evolving now. Renton’s advice 20 years ago is spot on, and more important than ever.
A combination of economic woes triggered by the pandemic, and exacerbated by weather-related catastrophes, makes kinder, gentler, more understanding collection policies good for portfolio performance. They’re likely to generate more revenue than a hardline approach, plus there’s the benefit of building longevity and loyalty with customers who like, trust and respect their “bill collectors” instead of abhorring them.