With growing understanding that future market share will be as much won on customer experience as on product and price, customer-first collections are not only socially responsible but will be critical to building customer loyalty and reducing churn. This article looks at what constitutes customer-first collections and why more businesses should be using this approach if they are to remain relevant and robust.
As businesses become increasingly aware of the key role customer experience plays in building and maintaining market share, there is a growing focus on ensuring a positive experience at all customer touch points. With most marketplaces highly competitive, deliver a poor customer experience (CX) anywhere during the customer journey and you risk wasting valuable time and resources on customer acquisition only for them to take their business elsewhere.
Delivering customer-first collections
This rise in the importance of CX has led to a fundamental shift in how businesses approach their collections process. Gone are the day of heavy-handed payment demands. Businesses should now look to work with their customers to resolve their debt position rather than simply collect on it. Delivering customer-first collections means finding solutions which work for both the customer and the corporation. At its heart is an acceptance that most business or people do not accumulate debt out of choice, and that when they do, they would far rather settle it if given the opportunity and means.
With customer-first collections, credit-control call is all about customer service. Focusing on the customer and their individual situation. There’s a significance difference between a customer who is contesting an invoice to one who is dealing with financial hardship – but both should be treated with understanding and respect and worked in partnership with to reach a resolution.
Balancing customer and company needs
It is critical to understand this does not mean no-one pays. Indeed, one of the biggest challenges is finding the right balance between the needs of the customer and the company and delivering a collections strategy which ensures outstanding balances are settled promptly and customers remain loyal to your company. Company cash flow will be compromised if your collections team avoid following up on outstanding invoices for fear of damaging key customer relationships. Equally, leaping to payment demands, when soft touch credit-control would secure payment might secure cash flow in the short-term, could possibly impact a customer’s life-time revenue opportunity. An effective customer-first collections process ensures that customers receive communication in the right tone at the right time.
Building customer loyalty
Whilst businesses invest heavily in building customer acquisition and management strategies, they all too often overlook the role the collections can play in maximising the lifetime value of every customer. Your collections team are an extension of your account management team – identifying and resolving issues and supporting your customers to ensure they can continue to trade. By supporting customers to resolutions, we can build
one of the most powerful tools in creating meaningful relationships, trust.
It is through building trust you have the potential to move your customers through the customer cycle to become not only repeat customers but advocates for your business and brand. This is the principle behind the customer flywheel; through nurturing your sales leads and your existing customers you deliver business growth.
In a modern marketplace it is critical for businesses deliver their customers an outstanding experience to build customer loyalty. Without customer loyalty, a business not only risks impacting the revenue potential from each customer, but also fail to secure potential advocates which will help attract and engaging new customers. Without loyalty you put growth at risk.
Often considered to be merely a financial process to maintain cash flow, collections in fact have a critical role to play in customer relationship management. By placing the customer at the heart of collections activity, a customer-first approach strengthens customer relationships and builds trust – securing your short-term cash flow as well as developing long-term loyalty and advocacy to support growth.
Author: Ashley Barratt – CEO Barratt Smith Brown
Leicester based Barratt Smith Brown, has established a strong reputation for providing market-leading debt collection support to the utilities sector. Leveraging CEO Ashley Barratt’s 15 years of experience at Centrica, they have not only provided outsourced support to key industry players such as Business Stream, Bristol Energy and Shell, but have taken a lead role in managing collections for UK energy administration collections – handing over 75% of energy administration cases since 2018. Their expertise in energy administrations led to their key role in helping The Citizen’s Advice Bureau develop their Supplier of Last Resort – Good Practice Guide.