When it comes to any business related debt, cooperation is of course the end goal. Outcomes are hugely influenced by three key elements: clarity, flexibility, and specificity. Clarity of communication, Flexibility of repayment pathways, and Specificity of terms.
While these paths are clear for debt collection as a whole, there is an important extra layer to consider when it comes to business-to-client Accounts Receivable debts. In these cases, the factor that rises to top priority is in fact Customer Retention. It’s not only sums that need to be recovered, but also client relationships.
For most businesses, acquiring a new customer can cost five to seven times more than retaining an existing one. And just a 5% decrease in customer defection rate can increase profits by up to 95% (industry dependent -Bain&Co/HBR). One of the easiest ways to identify unhappy or disgruntled clients is of course: look at the ones not paying. Targeting these clients in a positive and proactive way while also integrating empathy through personalisation is a win-win. Because of this, collection strategies that place EMPATHY and PERSONALISATION at the forefront are the key for Account Receivable debt recovery.
While clarity of communication and flexibility of terms are paramount for any successful collections practice, it’s the addition of practical elements of empathy and familiarity that ensure positive Net Promoter Score and consistent customer retention. AI driven collection programs such as our Repai platform allow for this in pragmatic, cost effective ways.
Empathy might be a loaded word, but it really comes down to RESPECT in debt recovery. Customers are much more likely to cooperate when they feel respected and valued.
Ways to manage effective accounts receivable campaigns
Send time optimisation for client communication is one key way to give every branch of communication maximum value and effect and ensure that no lines are crossed. By using the appropriate contact time space, technology can then be harnessed to suggest the perfect time for contacting your overdue accounts, without breaking any rules and regulations.
Personalization is another effective client-care extension for debt recovery. Payment Dynamics’ Repai Software uses AI to personalize the tone, theme, and content of client communication, and Payment Dynamics Consulting services allow for effective integration of these tools into the specific culture of a business during the implementation process. Accounts Receivable Debt Recovery efforts need to be effective financially, certainly. But the true sweet spot of success lies in the balance of collection results with client retention. Harmony there is what creates settled, loyal clients who are willing to act as advocates for the business moving forward.