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Why customer-led debt collection is the future of payments

June 21, 2024

Every year in Australia more than 75 million recurring or scheduled bill payments fail or are paid late – that’s 15% of all bills issued! Most companies want to do the right thing by their customers, but these late or failed bills cause headaches for businesses by impacting cash flow with firms forced to explore ways to collect these payments.  One of the most common methods to reconcile overdue bills is by using call centres to update billing details, request late payments or activate installment plans. In the past, contact centres were run in house however over the past 25 years – Australian companies have sought to reduce costs and improve operational efficiency by engaging 3rd party providers.

While engaging a call centre to follow up overdue customers has its benefits, there are clear draw-backs; call centres are capital intensive and result in unhappy consumers, accelerating customer churn.

Digital technology and open banking is an alternative solution – empowering  businesses to offer payment recovery & bill management options direct to consumer through their phone or laptop.

Avoiding debt collection through digital payment technology

Missing or failing to pay a bill on time can be stressful and embarrassing for customers.

This stress is only compounded when they feel they are being ‘chased’ by contact centres. In today’s world, 80% of consumers prefer to manage their finances through digital channels. Businesses, including utilities companies, financial services and government and healthcare organisations, are realising the need to put consumers in control when managing payments or paying overdue bills through digital channels as opposed to phone conversations traditionally used by call centres. Statistics from McKinsey & Co show that contacting customers through digital channels concerning their late payments was more successful in recouping overdue funds than using traditional methods like call centre outreach.

When customers are put in control of how they manage their finances and can easily repay a late bill or find payment options online, the evidence above showcases a direct link to higher payment success rates.

Customers want to avoid contact centres & pay their bills on their own

Providing customers with a positive experience when they have late or overdue payments is critical to improving debt collection. PWC research found that 74% of Australians find a positive experience with a brand to be more influential than great advertising. And at key moments, positive interactions with a company become even more important. A customer is also four times more likely to move to a competitor when their problem is related to service, over an issue relating to price or product. Despite these statistics, 61% of call centres do not have a customer service focus. In addition, one of the main ways Australian contact centres measure client happiness is through ‘FCR’ or First Call Resolution; with more than 23% of call centres are not measuring it at all.

While using a call centre for debt collection has the benefit of person-to-person engagement, it can be difficult to determine the right strategy. Contact centres can be stressful environments to work in; according to Gartner one in three call centre reps reported feeling disengaged at work, resulting in increased cost and poor employee and customer outcomes.

Consumer-led debt collection is more cost-effective than call centres

According to a 2018 Australian Contact Centre Benchmark Report, the average hourly cost to operate a contact centre seat is nearly $60. Across all types of contact centre queries, the average cost per call is $7.28 (8) – however this rises due to the complexity involved in collection-related calls, for example discussing and agreeing to a payment plan. Call centres require teams of people to run, including trainers, workforce planners, admin support, call centre agents and team leaders.  A consumer-led approach, however, easily lets customers manage their own payments and late bills themselves for example, through an app, lowering transaction costs for a business.

Want to know how much failed and late payments are costing your business? Check out our calculator to find out how much these overdue payments are costing your company annually!

How Payble is leading the way in Australian customer-led debt collection

Payble empowers customers by letting them self-manage their bills and late payments without the need for businesses to engage a call centre. This allows companies to save money as there is less reliance on a call centre to chase customers and recover debt.

Payble uses digital technology to help businesses ensure more payments are made on time, and to provide customers with more control over their finances all through a single app.

Want to find out more about how Payble can help lower your debt recovery costs and improve your customers experiences? Register your interest and we’ll be in contact!

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