As the landscape for outstanding debt among Americans appears to be improving, over 74 percent of Americans still live from paycheck to paycheck. Mortgage and credit card balances experienced an overall reduction in 2012- 2013; however, balances for student loans have risen well over the 90-day past-due mark.
The changing debt landscape, combined with the on-going shift to a younger consumer demographic, is a compelling argument for ARM organizations to embrace electronic communication methods to support their ongoing paper communication programs.
While the unique legal and regulatory requirements of our industry still mandate communicating in writing, every ARM organization should explore the benefits of also using electronic communication. These include, but are not limited to:
- Speed & efficiency of email
- Cost savings
- Reliability of the medium
Prior to using email or other alternate communication methods, collections agencies need to gain the consumer’s consent. Once consent has been obtained, many collection agencies are discovering that consumers prefer the convenience of electronic communication.
Email has been successfully deployed in the ARM space for several years now. You certainly want to exercise caution when selecting an email provider. Things to consider when evaluating solutions include:
- Collection industry experience
- Ability to properly safeguard and maintain security on the message to prevent 3rd party disclosure
- Ability to reroute the message via conventional print and mail should the email fail
- The ease of integrating email with your existing consumer communication strategies
When implemented properly, email can provide a very reliable and cost-efficient alternative to the USPS. We have several clients who have been using email for several years without incident. The cost-savings are tremendous which can go straight to your bottom line or reinvested in additional communication to further drive response rates.
However, my middle-school child will tell you that email is so old fashioned. Beyond email, consumers are embracing mobile technology. It is critical for the ARM industry to understand how to successfully deploy it to better serve consumers in a compliant manner. I read an article just today that noted the in Q2 2013 smart phone sales actually surpassed those of feature phones. Sales are up an incredible 46.5% over last year! When you include iPad and other tablet computing devices, mobile technology is the next logical step in keeping with consumer preference for messaging and communications.
My colleague Randy Langley and I will host a Webinar next week that addresses these very topics. “Harnessing the Power of Electronic Communication” will provide an educational look at the trends behind electronic communication. We will discuss why consumers are opting in to receive text messaging and email notifications, and how receivables management organizations can incorporate these channels into their existing communication program. This Webinar will provide valuable information for organizations just beginning to explore email, as well as those that are ready to embrace text messaging.
By incorporating variety of technologies such as email, outbound IVR and text messaging, receivables management organizations can quickly communicate with consumers and experience a boost in their ROI.
Author’s Note: Mike McDonnell, RevSpring’s Vice President of Sales, Eastern Region, writes a monthly blog at InsideARM.