Outstanding debts reduce liquidity and therefore reduce companies’ room for manoeuvre. With an increasing default risk and increasing payment issues, service companies are putting their own liquidity, and even their own continued existence, on the line. Modern and efficient receivables management, as offered by PAIR Finance, can ensure that companies do not get into difficulties because of outstanding debts. This applies in particular to service providers with online sales channels. The targeted use of digital communications channels helps us avoid disproportionately high costs, while the application of digital data brings the customer out of apparent anonymity in order to address them directly. Personalised, digital brokerage between the creditor and the debtor makes a decisive difference in modern claims management.
Effectively, no modern company can afford to go without digital sales channels. Whether it’s in logistics, relocation, food delivery services or shopping, the digital element is everywhere these days.
We also use digital technology in modern claims management and reach defaulting customers through the same trusted channel we used to approach them on a personalised basis. The debtor is no longer a “number”, but a person with character and specific behavioural patterns. This is where our behaviour-based approach comes in. Once the key characteristics of the debtor have been identified, we are able to target our communications specifically to them and thus make them more inclined to settle the outstanding debt. The modern version of debt collection is no longer based on standardised reminder letters written by solicitors. In claims management, if you approach the debtor on an individual basis, you are laying the foundations for efficient settlement of the claim via the channel preferred by the customer.
A reminder or payment request can only be successful if it is actually noticed. And it has to be a way that appeals directly to the customer. Modern claims management takes place within the comfort zone of the debtor and ensures dialogue on an equal footing. This dialogue is then not perceived as a threat, but as a potential solution. Only very few debtors feel comfortable with outstanding bills and are not worried by them at all. But how does an optimised, modern claims management system work? Various interfaces ensure smooth transfer of data records to PAIR Finance. Once these have been uploaded, the characterisation process begins, followed by the selection of an appropriate strategy and suitable channels that the debtor will actually take notice of.
The digital era not only requires new methods, it means rethinking how we do things. If the debtor has been contacted through their preferred digital method and there is a clear willingness to pay, then switching to a different channel makes no sense. This means, it should also be pay the debt though digital channels, ideally from any device, including PCs, tablets, notebook or even smartphones. Receivables management in the digital age needs to be kept modern, efficient for both parties and simple. By choosing the right channel and staying in the digital world, there is an increased probability that the customer will remain a customer after the payment issue is resolved.
The traditional conventional approach to debt collection often leads to the customer not returning after settling the debt. Payment demands and threats tend to up with a permanent break. However, if a personalised, individual approach is taken to debt collection and the nature of the approach is tailored to the character of the debtor, the risk of them taking their custom elsewhere is reduced enormously. Using the digital solution also reduces the costs for PAIR Finance, and this can be passed on to the customer in the form of a reduced debt collection fee, thus contributing to the higher success rate. The reduced debt collection fees are of real importance to the debtor. They do not feel “outsmarted”, or that their (temporarily) difficult situation has been ‘exploited’, for example by involving a solicitor in the reminder system prior to legal proceedings. Willingness to continue to work together on a productive, constructive basis after the settlement of the debt is increased.
Every new approach involves change and is revolutionary: This is the approach taken by PAIR Finance in order to satisfy both sides. As a creditor, the company retains liquidity thanks to the improved payment rates, and, as a debtor, the customer does not feel threatened and is retained as a customer.