Why friends collect debt faster

All the signs are there that consumers are feeling the economic pain, from rising unemployment rates to this year’s recently reported falling retail sales, says Richard Mukheibir, CEO of Cash Converters Southern Africa. Reflecting these circumstances in empathetic debt collecting approaches means the company now boasts a success rate of two out of three loans clawed back from default.

“People are still haunted by that adversarial historic image of rough-and-ready debt collectors,” he says. “Thankfully, that kind of abuse is illegal now. It pushed everyone to rethink their credit and debt procedures and for us, that now means reinforcing a spirit of ‘collecting with kindness’ among our call-centre consultants. The results speak for themselves with collections up 72 per cent year on year.”

The improvement has come thanks to better technology to track and follow up debt patterns among borrowers, says Mukheibir, and to the “make friends” approach introduced by Cash Converters Debt Collection Manager Adele Lewis, who joined the company early in 2016. This synergy has seen collections rise more than 50 per cent since then.

“We can see that most consumers intend to honour the debt that they take on,” says Mukheibir. “The ‘credit criminals’ who take on debt with no intention of servicing it are few and far between.” But all too often circumstances change and borrowers who had the best of intentions find themselves faced with demands on four credit agreements or loans and only enough cash in hand to pay one.

“We believe we are here to help people get on with their lives,” says Mukheibir. “That includes remaining approachable and where possible helping a customer avoid a worsening credit-bureau rating.”

Debt collection is very similar to sales and establishing a relationship with the customer makes all the difference, says Lewis. To make your debt the one that the consumer chooses to pay when times are tough, you need to be listening to find out what works for both parties so you can keep the consumer in the paying cycle, even if that means reducing payments to R100 a month until the consumer’s circumstances improve.

The company’s debt consultants are trained and mentored by Lewis to build a “cradle to grave” relationship with the customer. As a result, consultants are often greeted by name by “their” customers – “Hi, Alice, it’s you again”. In turn, customers often take the initiative to contact “their” consultant to say, “I’m ready to raise that repayment to R300 a month now.”

Adding WhatsApp to its voice and SMS customer-contact channels has further boosted the company’s customer-friendly approach. It has also decreased the number of dropped calls when the call centre is at its busiest.

Customers enjoy communicating with the company on the WhatsApp platform because it is more discreet than responding to a voice call about personal finances in the middle of an open-plan office, for example. If they are working shifts and can only communicate after hours, they can choose to respond whenever is most convenient for them, even if this is at 10pm or 5am. With all debt consultants registered to use this channel on the company’s behalf, it has increased their productivity as they can maintain five or six WhatsApp conversations at once, which would be impossible with a voice call.

“WhatsApp works for many customers while for others, it is an ice-breaker that leads us into a voice conversation or an e-mail exchange, whichever works best for them,” says Mukheibir. “A friendly and understanding approach to collections brings a better debt outcome for customers and companies.”