In the telecommunications (telcos) sector, debt collection is often an afterthought. Debts in telcos are often small when compared to the financial and utilities sectors but they can still lead to losses. Indeed, losses due to bad customer debt can be as high as 2% of total revenue. However, it’s one area of their business that can easily be turned around and bring in more revenue from customers and companies already on their books.
With wars against mergers and regulatory pressures constantly being waged, not to mention the constant drive to find new markets, and all of this whilst acquiring more customers and cutting costs, telcos have a lot on their plates. But whilst the industry might have never been more competitive, with disruptive tech like 5G constantly moving the goalposts, debt collection for many in the sector is still stuck in the past. A self-service portal might be the easy fix here - a customer-facing, frictionless solution that cuts out the middlemen and improves customer relationships.
To underline exactly how the EXUS Financial Suite’s self-service solution works and how it can be used to solve some of the unique difficulties faced by telco firms, we are putting the spotlight on one telco company (we’ll refer to it as Company A throughout) in particular. Here, we’ll reflect on how our CSS platform helped them to overcome their problems and deliver a more reliable and sophisticated service to their customers and collectors.
What problems were they facing?
It might be slightly easier for telcos to contact their debtors than it is for banks, as they will always have the relevant contact information on hand. Not only that, but they can send text messages and make phone calls without incurring a charge as they already own that service. Crucially, they are also holding all of the cards, as they can take the nuclear option of cutting off services if debts remain unpaid.
However, whilst Company A might have been holding all the cards, how effectively were they playing them, especially when using some severely outdated hands? They were still utilising SAB and offloading communications to call centres for their core collection activities. They were also completely lacking a digital charter to allow them to get in touch with customers and secure payments.
More crucially, their resources were being badly managed. They were receiving an influx of calls from customers just a few days before their service was due to be cut off. This was using up valuable resources, often to solve very small tickets of just £50 or £100. Not only that, but their customer service teams were offering payment options and solutions that simply didn’t fit with the company’s overall collections strategy, as call centres were offering settlement or suspension plans without strategic consideration in order to end the call quickly and get on to the next debtor.
Frankly, they needed a change and our customer self-service (CSS) solution was the ideal change for them.
How did the CSS solution help?
Company A needed a digital ecosystem that was specifically built from the ground-up for collections activities and a charter that allowed them to directly contact their customers at every stage of the collections process. They also needed it to complement their existing core collection platform and to allow collections managers to be flexible and create strategies based on the previous behaviours of each individual customer. That’s the key here really - treating the customer not as a number, but as an individual.
Our solution streamlined their collections activities by allowing them to replace the old mechanism of sending a text message to a customer, informing them that their line would be suspended. They would then be given a more elegant bespoke URL and a one-time password that gave them access to a web portal where they could settle their debts themselves without having to speak to a customer service rep. This effectively cut out the middle man which saves not only time and resources but leaves call centre employees free to work on cases that actually require their full attention.
Our solution also offered Company A a great deal of flexibility and the ability to use past customer behaviour to define not only the best settlements they could offer customers but the second and third best settlements too. It also gave those customers a chance to choose, which can be an incredibly empowering thing - giving them agency in choosing from a range of options instead of simply being told what your ultimatums are.
So, whether a customer can pay 50% right now and 50% later or 20% now and 80% later, the system allowed the company to find a suitable settlement plan for each customer. It then logged how that settlement played out so that all future settlements could be built around their behaviour. It’s a remarkably flexible system that gives power to both the collections managers and the customers.
What were the results?
Company A has been using the system for over two years now and the number of people utilising the service has markedly increased in that time. When the solution was first implemented, only around 12% of customers were utilising the service, now it’s at 23%. That number might still seem low, but it means significantly fewer calls in the call centre and therefore fewer man-hours being spent to serve debtors asking for settlements.
The CSS solution is all about giving some agency back to the end-user - the customer who might otherwise feel uncomfortable about accruing debt. Because often, with telcos, they might not even realise they are in debt. Giving them a bespoke platform from which to manage and settle their own debts has proven empowering for their customers.
Perhaps most importantly, since implementing our CSS solution almost three years ago, the kept promise ratio of the company is now at 85%, which is 10% above the telcos average of 75%.
The next step for Company A needs to be training their customers on how to use the service. 23% is better than 12% but it still represents less than a quarter of their users, after all. Customers need to realise that telcos operate on a notion of kept promises - you keep your promises and pay on time and the service will be available to you. If you fall into debt, that service is disconnected and if that debt is cleared the service is reconnected.
It’s not rocket science, of course, but it’s ultimately up to the company to get this across to their customers and up to us to create the platforms that facilitate such communication between the company and their customers. When it comes to facilitating faster communication, AI is obviously something that often comes up and we’ve already been discussing AI options with our case company, which will help them to establish which customers are more likely to use the self-service platform.
AI is able to increase efficiency by being able to select which settlement suits which customer right off the bat. It can achieve this by utilising not only past customer behaviour but tracking when and how customers respond to messages and how long it takes them to log into the self-service portal after receiving that message.
This information can be used to ascertain everything from the ideal collection time frame, to which channels to use to contact the customer in order to achieve the best results. Machine learning is an immensely powerful tool and we’re always looking at fresh ways in which to integrate it into our CSS platform to help clients such as our company in question achieve better results.
Power to the people
Telecommunications is a business with a lot of spinning plates to keep under control and the more flexible and powerful the tools behind them, the faster and longer they will keep spinning. When it comes to debt collections, that tool needs to be flexible enough and powerful enough to adapt to new technologies (such as AI) and offer customers the power to take control of their own destinies.
By investing in a solution that allowed them to have oversight into how their customers were acting (and as such, react accordingly) whilst also giving those customers control over when and how they pay their debts, our company managed to pull themselves out of an antiquated rut and drive themselves into the 21st century with poise and conviction.
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