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Martin Germanis | 01 August, 2023

The importance of customer behavior in designing effective collections journeys

A one-size-fits-all approach to customer engagement is futile. Instead, you need to build an understanding of customer behavior to be able to guide individual accounts to financial health. By doing so, you can humanize your collections process to encourage engagement, build customer retention and efficiently hit important KPIs. 

In this article, we explore the importance of customer behavior in collections from a podcast conversation between Christina Fisher (Manager, Growth Marketing) of C&R Software and Maria Douneva, PHD (Behavioral Science Consultant).

How can an understanding of customer behavior lead to humanized collections processes?

When interpreting customer behavior, it can be simplified by establishing their key psychological needs, such as autonomy and sense of belonging. People can feel restricted in collections by a lack of freedom, which can lead to the perception that they are just a number on a database. Customers that feel this way are less likely to engage with you throughout the collection process, making it difficult to provide the support and guidance they need.

As a solution, you need to provide customers with the ability and freedom to control and personalize their collections journey. This can range from communicating via channels they prefer and are likely to engage with, to offering them a number of payment options that are suited to their specific situation. By communicating and demonstrating to customers that you are taking their personal, behavioral and emotional factors into account, they are far more likely to engage with you and build a mutually beneficial relationship.

How can data strengthen your understanding of customer behavior? 

In order to provide personalized payment options and collections journeys, you need to have a strong foundation of data on the behavioral factors of each customer. This includes their account history, channels they have communicated with, information recorded during calls with your team and much more. To collect and analyze this significant amount of data, you need a configurable platform that centralizes data and can utilize AI-powered tools such as machine learning (ML). With these tools, you can integrate workflows and segment customers based on their behavioral factors, enabling you to assign personalized treatment paths for each customer. The result is customers that are supported on a personal level, leading to improved engagement and enhanced collection performance.

Grow your understanding of customer behavior and enhance collection performance with a holistic platform

There is no argument that customer behavior is playing an increasingly important role in collections as a way to humanize the relationship between business and customer. By understanding the emotional, psychological and environmental factors that your customers are facing, you can be better equipped to help resolve their debt in a more human way.

C&R Software’s industry leading Debt Manager acts as a holistic collections platform that can help grow your understanding of customer behavior. By centralizing data, utilizing AI-tools and automating arduous tasks, your team can spend more time focusing on supporting customers and resolving debt.

To find out more details about the conversation between Christina and Maria, watch the podcast here. To find out more about how a Debt manager can enhance your relationship with customers by providing visibility of behavioral information, contact a member of our team today. 

 Martin Germanis
About the author

Martin Germanis

Martin Germanis has been a leader in the collections and recovery software space for nearly 40 years. He led the original team responsible for the creating of Debt Manager, C&R Software’s flagship tool. Martin is an experienced global sales leader and implementation strategist.

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