Strategic use of SMS text messaging is an effective and efficient way of reaching out to customers to increase promises-to-pay and collections performance. Mark Oppermann explains both theory and best practice.
You’re in trouble with a credit card. The company keeps chasing you with letters and calls, that you stopped trying to deal with weeks ago. And then you get a text, which you feel you can answer. Before long, you have come to an arrangement with the same finance company you were too stressed out, ashamed or embarrassed to call back. The result is that you are on the way back to financial health, a full night’s sleep, with your credit rating undamaged.
Welcome to an incredibly useful business process that financial services companies are starting to use, an approach using two-way texting: a new and powerful way of reaching out to customers that is turning defaulting customers into diligent payers.
Why text? Because it’s a way of doing in business what we often do in our private life – send short messages saying we are on the way, will be late, asking where the other person is. Texting used in this way can deliver huge benefits in terms of improved efficiency, better use of call centre agent time and late stage repayment deals with customers. Specifically, it’s a highly effective way to reach out and establish a working relationship with customers who have stopped responding to standard outbound contact processes. Text-based dialogues can also turn defaulters into payers at a fraction of the cost of the letters and land line calls businesses use.
Why do we need this alternative? Simple: chasing customers and trying to get them to make a payment is a labour intensive, disjointed and costly process. Bombarding customers with letters, e-mails, one-way texts and calls is all too often less than effective. After a certain point customers avoid all attempts to engage with them in a meaningful conversation about their debt. They have stopped listening. This does neither party any good. We need to create a bit of space to enable the customer to gather their thoughts, to ready themselves, and to engage on the issue they have been avoiding.
SMS is used by almost everyone and has incredible reach. It can be used with even the most basic kind of mobile handsets as well as smartphones. It is embedded in everyday casual interactions, and it is appreciated by customers most particularly when the communication is of value to them. However, to date, it has occupied a fairly low position in the priority list of most contact centre executives because its power is underestimated; in the mind of business and IT leaders it might seem a rather "low tech," unsophisticated communications medium. Yet personalised, context sensitive communications tailored to the individual’s preferences is fundamental to successful outcomes.
Why is text so effective? The UK is a nation of texters: Ofcom released data last year that showed the average Briton now sends 50 texts a week, with over 150 billion text messages sent in 2011 alone. Almost all (96%) 16-24s use some form of text-based application on a daily basis to communicate with friends and family.
However, the fact that people love to text and are comfortable with the medium is only part of the reason why using a SMS text messaging is hitting the mark for customer contact teams. The other factor is that it balances intimacy with distance in a way that cannot be achieved within a real time telephone call with a live agent.
Let’s understand why. Not only is it a medium that people are comfortable with, but as a communication format it can be discreet and personal, in a way that a telephone call just can’t. That’s why the stressed-out customer we discussed felt able to respond to that text. Why? Because customers can respond to texts in their own time and don’t feel as "put on the spot" (they might be at work, travelling or socialising) as if they’d actually answered a call and were connected to a live agent. There is also a lot less personal investment or risk of losing face by offering a payment suggestion by SMS as opposed to by voice on the phone, fearing it might be rejected. SMS is ideal for having less “pressured” conversations – e.g. about payment delinquency – that may be too negative for many people to have by voice.
This is why business texting works. One-to-one interactive texts messaging sessions between an agent and customers can deliver huge benefits in terms of improved efficiency, better utilisation of call centre agents, and improved collections performance. Developing a connection with a customer is a good way of opening up channels of communication allowing the customer to feel comfortable when discussing their personal situation. The added benefits of this particular species of business-based conversational engagement is that it is fully compliant plus has complete audit trail capabilities. Coupled with right party contact verification, it has proven to be very effective and efficient.
Beyond ‘fire and forget’ style communications
So how are companies using SMS outreach to improve collection performance? Simple: they’re changed texting approach from “fire and forget” to “Guided Text Conversations” – threading inbound SMS responses with outbound replies from the agent, fostering conversations that really flow, helping the customer along and determining how best to work together. Most often, SMS used like this engages each customer in a one-to-one ‘conversation’ with an agent about their outstanding balances – and it has resulted in some hugely positive outcomes, as discussed.
Plus, using SMS as an interactive, rapid-response mechanism to connect with defaulting customers is just one benefit of the medium. SMS is also a useful way to engage with customers and deepen their interest in any new products or services. Banks can text, for example, during the various approval stages of a financial product, telling you where you are in the approval cycle (“your loan application is being processed now”). It’s also a great way to offer value added services, texting people with an up-to-date balance on a particular account, for example.
To sum up: if you want an on-going dialogue with customers, two-way texting is the next generation of tech-enabled customer outreach. But making it truly personal like this means treating different people individually. The more you can understand and accommodate an individual’s values, the greater your ability to influence the outcome. Technology makes this possible to a degree you may have never imagined before.
We are only at the beginning of making the most of texting in business. So why aren’t you making the most of the power of business texting?
Mark Oppermann is development director at VoiceSage.