This week on Collecting Thoughts, C&R Software's podcast features conversations with industry experts and insiders: host Christina chats with Dave Hanrahan, founder of Kredit. With a unique background in investment banking and a passion for innovation, Dave shares his journey into the collections industry and the founding of Kredit in 2020. He offers valuable insights on the importance of purposeful omnichannel communication in creating a customer-centric collections strategy.
Christina and Dave discuss the evolution of collections communication from sporadic multichannel approaches to more intentional omnichannel engagement. They explore the importance of avoiding overwhelming consumers with excessive digital outreach, which can lead to diminishing returns and negative consequences.
Read on to learn more from the episode.
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Guest Profile
Name: Dave Hanrahan
Profession: Founder of Kredit
Find Dave on LinkedIn.
Episode's Key Points
Changes Brought About by The Pandemic
Christina and Dave discuss the impact of the COVID-19 pandemic on the collections industry, which brought challenges and opportunities. The shift to remote work forced organizations to quickly adapt their operations and manage employees in a new environment.
Covid brought a ton of changes, both good for the industry but also difficult for the industry. I mean, the biggest item is the workforce changes. So with everybody working from home, every organization had a ton of operational things to figure out how they staff, what their work situations are like, how they manage employees in a remote environment.
Despite the challenges, the pandemic also coincided with the implementation of Regulation F, allowing recovery organizations to engage with consumers more efficiently through digital channels like text and email. Additionally, consumers demonstrated surprisingly responsible financial behavior during this time.
If you look at all the stimulus checks, I don't think a lot of people in the early innings of Covid expected for liquidations to be as high as they were. I think everyone is really surprised in a good way by human behavior and the fact that people took a lot of those checks and used them to pay down debt and de-lever a little bit.
The Role of AI in Collections
Dave explores AI's transformative potential in the collections industry, particularly in optimizing compliance and personalizing outreach. He suggests that AI can be a valuable tool for auditing interactions and flagging outliers that the human eye might miss.
I actually think that one of the bigger opportunities is the compliance side because generating copy is good, but going through and having an assistant 24/7 that can help you audit things and go through and sample and say, 'Hey, where are the outliers in our data and our interactions?' Because often the different AI tools can flag things that our human eye might not catch.
However, Dave emphasizes that organizations don't need to make massive investments or hire dedicated AI teams to benefit from the technology. Instead, he recommends focusing on minor, iterative improvements and leveraging third-party tools when necessary.
As we go through, I try to think about what's the lowest hanging fruit, how can you go through and say, 'I need to make sure that my complaint rates are a little bit lower, or I need to make sure that I do QA a little bit more efficiently this month.' It provides awesome areas and there's so much good tooling out there where you don't really need to invest a ton of money.
Being Clear in All Communication
Dave stresses the importance of clear, concise communication when contacting consumers digitally. He explains that messages must be sent through the proper channels, and the content must be specific and include clear calls to action.
You have to have the contents of that message be really specific. You have to have very clear calls to action, and even if you get that message out and have that consumer come through and convert where you send them matters a ton.
Dave also highlights the circular nature of these communications, emphasizing that organizations should learn from each interaction and adapt their approach accordingly.
There's a lot of follow up there so people will re-enter your waterfall. So seeing not just how you convert, but also then how you reactivate folks and re-engage with folks and say, 'Hey, I had this text exchange with you before. Let me take that context and use that as I'm reaching out again to say I knew your reaction there, positive or negative, let me go through and try to learn the good things that I did and also understand the things that you didn't respond to and adapt behavior there.'
Learn More
Visit the C&R Software blog to learn more about finance, software, and collections industry topics from insiders and experts like Dave Hanrahan.
Stay tuned for future episodes of Collecting Thoughts, where host Christina dives deep into more interviews with leaders from across the debt recovery and software world.
