Macro-level challenges are causing micro-level problems as telecoms feel the effects of market trends—especially in Europe. European telecoms are making moves to consolidate, causing:
- Forced cuts to service charges by European regulators, dropping revenue streams 8.6%.
- Larger companies with new structures, audience sizes and market positioning.
- Increased attention to cost of customer acquisition and the effect each individual customer has on bottom lines.
As threats to major profit sources continue amid additional competitive risk from cable companies and exclusive mobile telecom operators, providers’ collections and recovery departments have much to consider.
Below, we highlight a few of the items telecoms must keep top of mind as they reassess existing processes and form new strategies to improve collections operations.
1. Greater Collections Insight Will Be Needed as Companies Consolidate
As companies, departments, systems and customer channels merge, it will become even more critical for companies to fully understand their current operational structure.
Information on each stage of the collections cycle as it currently exists, as well as how it may need to evolve as acquisitions occur, will do much to help set your team up for success. Consider taking the following steps immediately:
- Conduct a formal audit of company collections policies and procedures.
- Note any direct challenges that impact your business at present moment, as well as any challenges that could impact your business as a result of consolidations.
- Have a plan of attack, and know where your business stands in terms of giving up or acquiring business.
- Understand how market conditions impact bottom-line statistics, and know what your business must do now to remain competitive in price and service offerings for the foreseeable future.
- Invest in technology that streamlines collections efficiency.
2. Collections Departments Play a More Important Role Than Ever
Pressure to be profitable is mounting as regulators curtail former revenue streams. While this may mean lower costs to consumers, internal collections departments will have to find new ways to meet existing revenue numbers. This makes it more important than ever to capture additional revenue from existing business through enhanced collections and recovery. To boost revenue, firms will need to:
- Offer additional services and lines of business.
- More efficiently manage greater customer volumes, thanks to consolidations and mergers.
- Pay greater attention to individual customer needs.
3. Collections Needs to Be Customer-Centric
With new rules and regulations, each customer counts more than ever before. Customer-facing approaches will make all the difference in boosting profitability.
Losing even one customer can be a huge financial hit over the lifetime of the business. Consider the following to promote customer retention and loyalty.
- Improve nurturing efforts and add additional touch points throughout the entire collections and recovery process that speak directly to customer needs and concerns.
- Implement incentives for continued or referred business.
- Be wary of collections actions that could alienate customer bases, and force them to begin assessing your competition as a viable option.
Make customer-centric collections practices a core goal of business operations to drive existing customer loyalty and new business referrals. Encourage employees to work toward a customer-first mindset that unifies and defines business mission, vision and culture for consistent profitability margins with room for growth.
Is Your Telecom Ready to Meet the Collections Challenges of a Changing Market?
Download Collections and Recovery: Meeting the Needs of a Changing World for debt collection best practices, ways to re-think collection strategies and tactics for better balance sheet performance.
Photo Credit: Roland Tanglao via Flickr