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Financial Solutions
10 Feb 2016

Making debt collection fairer

… Misunderstandings shouldn’t cost you business

As regular readers of this blog will know, the last thing we want is for your customers to go to debt collection. That may sound strange coming from a company working with debt collection, but in our experience an ounce of prevention is better than a pound of cure.

After all, debt collection is a last resort: most people want to pay and given the chance they will pay. But from time to time and for whatever reason – poor finances, an oversight, sickness or dissatisfaction with a particular product or service – they may miss a payment. The problem is they might not always understand the consequences.

As a rule, businesses are good at making it as easy as possible for customers to buy and pay for the goods and services they provide. But there can be a breakdown in communication in the event of non-payment: the customer might not be as well informed as we think they are. When a customer doesn’t respond promptly enough to a reminder, the case usually goes directly to debt collection. And that means the customer risks losing access to credit, and the merchant risks losing the customer.

If there is one thing we have learned over the years, it is that missing a payment doesn’t make someone a bad customer. We know how much time and money you have invested in them and in most cases they just need some help to get back on track. More often than not, there’s more to gain from avoiding debt collection, both in terms of your relationship – satisfied customers tend to stay loyal – and in terms of getting paid.

There are many reasons why you might lose a customer, but losing one because of a lack of information is irrational, wasteful and plain bad business.

Our new Soft Inkasso  (Soft Collection) service is a way of making sure that doesn’t happen. As the name implies it is an altogether “nicer” proposition than debt recovery, a halfway house between the reminder and the collection process. In a nutshell we will call your customers for you, clear up any misunderstandings, and come up with a payment plan that is in everyone’s best interests. You get your money faster and your customers avoid unnecessary costs and embarrassment.

Sometimes a soft approach can be the most effective way of doing business – especially if it has the added bonus of winning you credit with your customers.

– Gordon Odenbark

Debt Collection Manager, arvato Financial Solutions Sweden

finance.arvato.com

Press Release (in Swedish)

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