Ian Haddon, COO at ContactEngine
The use of automated communication tools, such as chatbots, to speak to customers has grown since the pandemic. One in four customer service companies are using AI, with 31% planning to introduce these tools in the next 18 months. The global chatbot market is estimated to grow by 23.9% each year until 2030, reaching a value of $3.6bn.
It’s easy to see why these tools have been adopted. Simple programs that can respond to frequently asked questions can reduce pressure on contact centers and give customers general answers. Indeed, the top three benefits consumers expect to get from chatbots are a 24-hour service (64%), the ability to get an instant response (55%) and answers to simple questions (55%). However, only a third expect chatbots to be able to answer complex questions or offer ‘friendliness and approachability’. This creates a big problem – especially when it comes to debt collection.
While some debtors will want to rectify a case where they owe money as soon as possible, many will avoid communicating for as long as they can. If you are insisting that they use your chatbots to get in touch, you are relying on them to make the first move and you are adding reasons for them to avoid you. You also run the risk of making them angry. A study from the American Marketing Association revealed that while ‘non-angry customers’ show a slight preference for anthropomorphized chatbots – popping up with an on-brand greeting – angry customers are much less satisfied with that approach. The damage can be done instantly.
According to chatbot firm EBM, one of the biggest contributors to a negative net promote score can be “the very first moment the customer interacts with the chatbot”.
This is where chatbots cause a negative perception of AI automation for business stakeholders too. Firms invest in a chatbot and at first it performs reasonably well and reduces call center pressure. But then there’s a drop off in engagement from customers that are already starting off from a negative mindset. Ultimately, firms blame AI for unsatisfactory outcomes when in fact it’s the application that’s at fault, not the technology.
There are few places in your customer contact function where engagement is more important than in debt recovery. If you’re relying on reactive communications from debtors phoning in or coming through your chatbot, then you are likely only adding friction to the process. This causes more stress and reduces your chances of recovering money owed. Instead, proactive AI, deployed on a users’ channel of choice, can increase response rates.
Rather than thinking about how to improve your AI tools to deal with angry customers, a better solution is to speak to them before they become angry. Currently, the debt collection conversation usually begins with a letter – striking letterhead, serious typeface, firm language. That letter prompts the debtor to get in touch – usually by phone or through your website. The conversation is already starting negatively. Unless they are a lawyer, member of parliament, or a love interest in an 18th century novel, it is unlikely that a formal letter is their preferred method of communication. 37% of people haven’t sent a letter in more than five years. They will likely feel threatened and cornered and forced to do something. By the time they are speaking to one of your workers, they’re understandably already angry. What if they can’t call during your contact center hours? They will now be greeted by an overly cheery chatbot, ill-equipped to resolve their specific case.
Businesses must implement AI more cleverly than in this reactive fashion. By using proactive automated communication, you can speak to customers at the first missed payment and explain options. You likely know the methods that your customers like to use to hear from you, so you can communicate to them in a more seamless way. The day after a missed payment, you can send a message inviting them to fix a mistake. If the case goes on longer, you can provide them with different options to pay it back. Even if later down the line they need a phone call, AI can do most of the legwork and give your contact center all the relevant background information they need. When the call takes place, you can save your users time and avoid them having to repeat themselves.
If your users are dissatisfied by the AI tools you have implemented, it’s a fault of the application, not the technology. Chatbots are great for making happy customers happier but drastically fall down at dealing with more complex problems. Debt collection requires a better, more sophisticated solution, one that is proactive and seamless to help the user navigate their own individual challenges.