In recent times, our society has undergone a radical transformation, reshaping the way people communicate and consume. This rapid change, largely driven by digital technology, provides access to online information at your fingertips, available whenever you desire. This shift has also influenced consumer behavior, with individuals now expecting highly personalized content on their smartphones and an uncomplicated, practical, and efficient acquisition process.
Given the ongoing "revolution" we're experiencing, it would be a mistake to assume that the Credit Collection sector won't be impacted. Failure to adapt to this new reality could result in suboptimal value extraction from operations or unnecessary investments.
In light of this evolving landscape, I emphasize the power of Hyperpersonalization and its application to customer-centricity. Placing the customer at the heart of decisions and business actions involves a deep understanding of their needs, expectations, and current challenges to offer solutions that genuinely satisfy them and create value.
Successful relationships rely heavily on managing expectations, and today's delinquent customers expect personalized, relevant, and timely communication that respects their privacy and autonomy. Moreover, customers expect accessible communication channels, provided they are agile and integrated, facilitating their interaction. Therefore, the strategic use of big data, analytics, and artificial intelligence to collect, analyze, and use customer data becomes crucial for creating unique and differentiated experiences, even in delinquent situations.
"Failure to adapt to this new reality could result in suboptimal value extraction from operations or unnecessary investments."
I have already implemented Hyperpersonalization in several cases, and the results were outstanding. I will structure this exploration around a few key pillars:
1-Analytics:
Analytics stands as a fundamental pillar of Hyperpersonalization. To personalize services effectively, it is essential to gain an in-depth understanding of each customer's profile. For credit collection, statistical models should identify:
a. The root cause of the customer's financial problem (e.g., unemployment)
b. The customer's current situation (e.g., return to the job market)
c. The best communication channel and time (e.g., WhatsApp in the morning).
2-Financial Solutions:
After comprehending the customer's profile and current situation, the next step is offering the best financial solution. While various companies may present different alternative offers, it's crucial to focus on how to structure the offer:
a. Priority - Ensure the offer is conveyed as a top priority, prompting the customer to reflect and decide on it urgently.
b. Relevance - Make the customer feel that the offer surpasses anything they've seen before, compelling them to seize the opportunity.
c. Exclusivity - Create an offer that enchants the customer, making them perceive it as tailor-made for them.
3-Systemic Architecture:
Once we understand the customer and their immediate needs, we must reach them through a simple, intuitive method on their preferred channel. Achieving simplicity is a significant challenge due to the complex structure, with numerous variables and renegotiation possibilities. The approach should be multichannel, servicing customers through their chosen channel while maintaining an omnichannel approach, ensuring continuous and seamless conversations regardless of the previous channel. Integrating human and digital channels creates an effective complementarity, allowing human channels to address situations requiring further explanation or persuasive efforts to accept renegotiations.
An essential challenge in the credit collection sector is fostering a team capable of excelling across all covered pillars: Analytics, Business Solutions, and Systemic Architecture. Balance and joint progress are key to making a real difference. Achieving high-level multidisciplinarity is no simple feat.
So, what can we expect from a collection operation employing Hyperpersonalization?
1-Enhanced Customer Satisfaction:
By receiving a personalized, respectful, and empathetic approach, customers feel valued and confident during debt negotiations. Successfully navigating the debt restructuring process builds brand loyalty, resulting in a 48% reduction in customer churn.
2-Improved Credit Recovery Efficiency:
When customers recognize the customized and effective nature of the offers, there is a noticeable increase in resolution for collection actions, leading to a 2x boost in credit recovery.
3-Reduced Operational Costs:
Decisiveness and efficiency in collection actions translate to significant cost reductions, with at least a 30% reduction in expenses per recovered US dollar.
The credit collection phase is delicate, which is precisely why Hyperpersonalization holds tremendous potential. Beyond improving financial results and increasing institutions' credit risk appetite, it has become one of the most influential levers for winning back and recovering customers.
Like a guiding light on the horizon of innovation, Hyperpersonalization illuminates a path toward a more efficient, empathetic, and sustainable credit recovery industry. Its potential unquestionably serves as the compass guiding the future of this critical industry for the financial and consumer sector, fostering a fairer balance between Credit Recovery and Customer Recovery.
