The impact of this on already stretched consumer spending budgets could have a knock-on effect by reducing demand for products or services.
Increasing numbers of people are using the ‘safety net’. Research published by StepChange Debt Charity in January estimates that ‘4.4 million people struggling to keep up with household bills and credit commitments borrowed £13 billion to pay bills and make it through to payday’ . The research suggests that ‘65% of those using credit as a safety net have kept up with credit repayments by recently missing housing or utility bills, using more credit or cutting back to the point of hardship’.
Customer debt is a likely challenge to be managed, as 13.2% of households (3.2M) in fuel poverty in 2020 will increase. There will be increasing numbers of vulnerable customers to support through the months ahead, so focus needs to be on ensuring that this is done well, and that processes are effective and appropriate. Agents need to know how to manage vulnerable customers to treat them fairly and with empathy, whilst controlling call durations to minimise operating costs without impacting outcomes. Compliance with FCA regulations is always a requirement but there could be further scrutiny. Additional capacity may be required in your business to support increased collection volumes, so it could be a good time to look to outsourced contact centre support. It will enable your business to gain the capacity that is needed, whilst ensuring the processes are managed most effectively. The right outsourcers will have income and expenditure tools and effective technologies to ease the process for the customers who may have difficulty in talking through their situation.
Those working in the energy collections market have the additional pressure of having to abide by the ruling to never ‘switch off’ customers’ energy even if they are in deep arrears. This puts further emphasis on the operations work these firms will need to do.
Businesses and households alike are facing challenges, perhaps the key is to ensure that there is compassion for how customers in debt are supported through these difficult times, use wider expertise if needed to ensure that they are well supported now and to in turn maximise your success rates using resource and technology. Effective support in harder times also ensures the loyalty of customers in the future so consider it an investment to protect your business now and for better times ahead.
