Delinquency payments are the scourge of every business. My parents used to keep a filing cabinet of delinquent customers and it was just disturbing that there are people who take advantage of others. Today accounts receivables remain a headache, regardless of whether you are a large bank or a small business. While small businesses rely mainly on good will to recover their losses, large enterprises like telecommunications have other avenues of recovery including third party [type of organization] or these days using software to better understand the nature of the delinquency and finding a fix to the problem.
For a Philippine carrier with more than 59 million mobile customers and more than 1.2 million broadband customers, Globe Telecom had to scale its collections efforts quickly while considering cost and improving customer care. In the process of figuring out a way to trim down its delinquent [payors], this meant segregating dead beats from loyal customers who may have legitimate reasons.
But cutting off dead beats is not a simple matter. For many consumer-facing enterprises, customer care and customer service are one of the key pillars and losing its brand over the mishandling of delinquents, no matter how financially serious is the impact to the carrier, has a longer term impact to the brand.
The traditional model for most carriers, including Globe, has been to rely on outbound phone calls. But its collection teams struggled with customers who were unhappy with the contact process. Complaints ranged from customers feeling they were being harassed or had to deal with rude agents. While the company needed to improve collections performance, it also had to ensure customer satisfaction.
According to Forrester, customer experience leaders must create experiences that meet or exceed customer expectations to drive profits. To succeed, you must design outstanding experiences and the ecosystem to deliver them, demonstrate the business value of customer experience as a discipline, and lead its adoption across the organization.
In search of a new option
Thankfully innovations in machine learning and analytics have come a long way. As in new technologies there is always apprehension about untried solutions. This was no different for Globe.
“We were looking for non-traditional ways of reaching out to our huge customer base without compromising cost and customer experience. At the same time we wanted to take the next step towards automation and digitalization,” said Mon Pernia (pictured above), head of consumer collections at Globe.
The solution came in the form of FICO’s Customer Communication Services (CCS) implemented in 2016.
“This was a new solution [at the time of implementation], new to us and most probably, new to our customers. We were quite excited to know how our customers would respond this non-human interaction. We thought that our customers were not ready yet so we had doubts that this will not be as effective as a person making the call – we were wrong,” Pernia added.
Proof is in the pudding
With the FICO solution, Globe now utilizes a multi-channel customer engagement system for collections. This change has helped keep the collection rates high through a clever and systematic system that allows the collections team to follow up with customers at the right time, using the right channel and with the right message.
The carrier said with the new solution drew some measurable results – reduce account delinquencies by 40% year-on-year. By automating a portion of its collections efforts, the company has also managed to reduce the cost to collect by 15% and the time it takes to collect by three days.
Post-implementation, Globe said it has seen the lowest levels of customer complaints and customer churn to date. The CCS solution has shown that most customers at early-stage collections prefer communication via SMS and the ability to address the matter without an awkward conversation with an actual agent.
The carrier claimed its Net Promoter Scores (NPS) continues to improve month-on-month.
Pernia concluded: “Today, we are better equipped to manage our collections, improve collections performance, increase customer satisfaction, and finally decrease churn and costs dramatically.”
“Keep studying our customers. What's working for us today may no longer be effective tomorrow. FICO CCS had enough intelligence to pick up trends so we set-up periodic champion-challenger strategies to determine the best we to interact with our customers,” Pernia commented.
With revenue pressures on carriers from increasing competitive intensity and regulation, carriers are trying to find fresh ways to innovate and differentiate themselves.
“Most leading carriers are doing this with customer centric strategies to both improve the customer experience and improve segmentation for a more personalized experience. Collecting revenue is one area that can benefit enormously from a personalized multi-channel approach (two-way SMS, IVR, email, letter) driven by automation and artificial intelligence,” said Dattu Kompella (pictured), managing director in Asia for FICO.
The goal is to ensure that the right communication is sent to the right customers, using the best channel and message.
This optimized approach means that the system can match the performance of human agents and shoulder the bulk of the early stage collection work which in turn frees staff to deal with the more challenging cases. Globe’s adoption of the Client Communication Services solution shows what can be achieved to increase performance while maintaining customer satisfaction in a relatively short period of time.
Few businesses these days deploy any new solution with a tactical objective, particularly for solutions that involve technology-led, human processes. By leveraging FICO’s experience in customer collections and its automated system incorporating machine learning, sophisticated analytics and existing models, Globe says it was able to expand the contact strategy to include additional customer engagement channels like SMS, email and interactive voice response (IVR), which when mixed with sophisticated analytics meant it could perform collections to the same standard as an actual agent.
“This use of 'machine calling' instead of traditional ways of agents calling customers was an innovation in itself. Though it was a new kind of technology, the roll-out turned out to be a success that revolutionized the way we do business,” explained Pernia.