In recent years, online media companies have been able to revolutionise many areas of information and entertainment. Many customers use these services every day and pay for them, depending on the service. As a result, as in all areas of the economy, there are outstanding debts and thus reduced liquidity, with the unpaid amounts often very small and simply forgotten by the end customers. The media companies and publishing houses that have revolutionised the information market can rely on new, digitalised methods of receivables management from PAIR Finance in order to avoid payment defaults and ensure efficient collection of even very small debts.
Digital goods have become massively more important over the last few years. Electronic newspapers, music download and streaming, films and boxsets available online and libraries in our pockets with our favourite books on our phones – this all generates costs for the user and thus an increased risk of payment problems. New markets are being served, new channels played, but when it comes to claims management and, in particular, debt collection, traditional or conventional elements are still used. A contradiction in itself? Absolutely, especially as there are more modern alternatives which correlate perfectly with this new medium. Ideally, the defaulting customer should be motivated to make a payment using exactly the same channel as they used to conclude the subscription. PAIR Finance is making logical progression along the digital route, ensuring a better approach to the customer via a communications channel selected on an individual basis.
Modern claims management is based on a digital solution and the consistent use of the opportunities it offers. Machine learning and big data are the ‘secrets’ behind Debt Collection 4.0. Algorithms which learn and record which ways are best to approach the customer to ensure motivation to pay. Debtors are not numbers, they remain customers with a purchase history. None of this is taken into consideration with traditional receivables management and debt collection, which relies on standardised customer letters using traditional means of communications, by post from the company solicitor, which generates additional costs even before proceedings are taken to court. Approaching the customer as an individual, as a person, is simply neglected in many traditional debt collection processes. Many companies whose services are otherwise purely digital adopt an impersonal, standardised approach to claims management, even in the digital age. Making threats instead of offering solutions is not the contemporary way. Especially not if companies want to retain debtors as customers once payment has been made.
If we look at the market for digital products, one thing becomes clear: there are many different ways of paying a bill. Only if the bill is unpaid or payment is late, the options generally shrink to include just postal communication. Letter by letter, pressure is built up, costs increase and the defaulting customer feels the stigma of being a non-payer. The result is a negative branding.
At PAIR Finance, we aim to avoid this by treating defaulting customers on an equal footing and utilising the communications channels through which the customers can really be reached and to which they actually react. It is all on ‘home territory’ for the debtors, who do not need to leave their digital comfort zone in order to pay the debt.
The digital age offers a wide range of opportunities for analysing customer behaviour. This includes non-payment. The learning algorithm helps pinpoint reasons for non-payment in an automated, cost-effective way. It can then select the right way of approaching the customer. The channel used is compatible with all forms of end device used by the debtor. This approach not only increases the repayment rate, it also ensures customer loyalty, as the individual approach means they feel better understood.
It should also be taken into consideration that the customer and debtor are active in a digitalised world. The same applies to the payment options available to settle the debts. If the customer had various payment options when signing up to the service, they expect the same level of choice when settling the debt for which they have received a reminder. We can forget about paper transfer dockets, nobody uses them any more. It is an outdated solution. Therefore various payment options should be offered to settled the debt. This increases the incentive to pay off the debt. Even if the amount in arrears adds up, there is real bandwidth in modern payment options. With PAIR Finance, open claims can be settled easily, with no changes in media format. This is how modern receivables management in a digital market should be.