CAURI supported the proposal of voluntary experts on the implementation of the soft collection service (soft debt collection of clients’ receivables in the form of reminders). This raises the question: what should such a service be at the initial and advanced stages of implementation so that it organically complements the payment services of CAURI and how to organize its promotion in the market?
I think the value of the soft collection will increase in the eyes of customers if customers regularly receive relevant analytics from CAURI related to the payment discipline of their debtors.
In addition, CAURI can provide customers with a forecast of receipt of payments, based on existing payment discipline, which can be a big plus for their financial management.
I think that soft collection can be very useful in collecting membership fees of participants in various associations, cooperatives, etc.
Very often membership dues are not paid on time. However, it is clear that they must be collected extremely delicately.
Considering the fact that the previously approved service for controlling the assignment of payments may be relevant for this category of organizations, in my opinion, it is worth preparing a general proposal and focusing on them as an important and priority target group of customers.
I totally agree! At the same time, about 80-90% of the membership fee can be paid on time only after 1-2 reminders.
It is very important that they are convenient to pay and that at least once a person tries to do it!
Such a service can be organized by introducing a simple scoring algorithm that classifies payers and determines the rules for working with each group of payers.
At the same time, each payer is identified in the system and may even receive some additional privileges for payments through the service (not even a cashback, but something immaterial - for example, the right to preemptively visit public areas, swim on cooperative beaches, use public goods - lawn mowers, etc.)
To be honest, I had in mind so far the soft collection with debtors - companies, not people. That is, I had in mind the associations and cooperatives of which legal entities are members. This is much easier than working with a host of individuals.
But this does not mean that the idea of a soft collection on private debt is meaningless. Not at all. This is a potentially huge business.
But I would tie him to finding a solution for private transfers (see our question 10). What is the connection? Directly no. But simply both tasks will lead the client to a strategic decision on the beginning of mass work with individuals. And any strategic decision is easier to take, taking into account the expected large-scale effect "on different fronts."
For any utilities, the problem of timely contributions is super-relevant!
Promotion of a soat-collection service through associations of developers, condominiums, apartment owners and other communities can be a very promising direction.
The offer itself may contain:
- obvious advantages of the service: increasing the collection of contributions through a system of adequate reminders.
- a description of the mechanics of interaction: most likely, a mobile application with a system of reminders and easy payments,
- Description of possible bonus systems (selection of several options for "quick rewards" after timely payment)
- a description of a possible sanctions system (a reminder that in the absence of payment after 2 days, penalties will be charged, access to common goods will be limited or the sewage system will be blocked :)
- price offer.
For new cottage villages or housing complexes under construction, such a system in general may be the only solution, because residents who have not yet entered often accumulate debts. A system of adequate reminders will allow them not to go into a deep minus, but to stay afloat.
By the way, maintaining a low mortgage rate for those who pay on time can also be a bonus!
I think, that it will not be possible to build an effective marketing program to promote soft collection services without first listing the main arguments in favor of outsourcing such services from CAURI, which can be called potential customers.
In my opinion, there are five main such arguments:
Naturally, each of these arguments must be prepared to further decipher (and, most importantly, provide a service of adequate quality)
I've been thinking for a long time about the question of what can interfere with the promotion of soft collection services and came to the conclusion that the most likely barrier is the fear of suppliers of goods and services to spoil relations with their consumers by passing soft collection. And it seems to me that these fears will be very serious.
And it occurred to me - what if buyers come to suppliers and say: charge CAURI to collect debt from us
Then such fears will immediately disappear. Why is it for buyers? Well, for example, to choose a “decent company” in “collectors for yourself”, and not who knows. Secondly, buyers can pay agency fees.
You can start with online stores, as with a familiar audience for CAURI.
This does not apply to factoring companies (with non-closed factoring) - they can offer them a soft collection directly, because buyers are already notified of the transfer of debt.
The fear of maintaining a relationship with the buyer is, indeed, very serious. Many suppliers in factoring therefore prefer to introduce restrictions on the contact factor and customer.
Reversible software collection, indeed, can be a way out. In this case, you need to think very well about the interest of the debtor.
I would think in the direction of financial motivation. For example, a discount on services.
But other bonuses are also possible - for example, in the affiliate program in a business club, a month of free membership.
I think that our situation is more complicated than the situation in factoring. When factoring, everyone (both the supplier and the buyer) understands that, as a rule, the supplier resorts to factoring primarily for financing.
I am for financial motivation And direct. Let the debtor simply receive part of the money that the customer pays CAURI. As an agency fee.
But you can also consider the soft collection as an aid to the debtor. As a timely reminder of payments (after all, in most cases, people do not pay on time due to forgetfulness or disappearance of information).
And you can, by the way, look at the problem from the other side.
And the marketing argument for the promotion of soft collection services may be that it is this service that helps protect the relationship between the supplier and its client from destruction. When the supplier himself reminds about the payment, this can lead to the accumulation of irritation of the client against him. Only this must be subtly psychologically filed.
A soft collection service might consider creating a matrix of customisable communications, which could be say email or text based. Such a matrix will include a time-based dimension e.g. confirmatory statement, a first reminder of payment required, a payment due, a payment overdue, an intention of recovery action. It will also contain an intensity-based dimension, from very polite (do please consider paying) to firm (no further goods or services will be provided until this debt is paid). The user will choose timing and sequence.
There should be in all debtor communication a link to Cauri and an online/app-based access to payments to enable the recipient to set up account and pay debt directly (or to a factor).
This would create a multiple win win; a new user for Cauri, a debt paid for the collection service user and a fee for the collection service provider.
Such an arrangement can be easily adapted and structured according to the particular user situations and requirements.
John very truly outlined the overall structure of the service, and quite accurately.
I believe that in this case, you just need to implement the proposals. Perhaps the main question is in the promotion of such services?
There are two sub-questions: the essence of the services and their promotion.
The essence of the service as a whole, John Ochetil is true, but it will still have to be very detailed. For example, we are talking about a written reminder of payments or oral. Probably worth starting with writing. Ok, then how does the debtor get a reminder? By e-mail, via messengers, somehow else? Who writes reminding texts: CAURI or customers?
In which language? There are many languages in Europe. Limited to English or work with other languages? What do we do in a situation where the debtor does not agree with the claim? Generally provides a situation that the debtor can answer something? Or for the first version of the service, we do not pay attention to it, and include work with the objections of the debtor in the second version?
There is a question of pricing. Someone from a colleague understands how much such a service can cost?
Well, well, these are technical issues. But there is an important question regarding which customers this service is addressed in the first place? Yes, almost all companies have accounts receivable, but maybe there are priority sectors or groups of clients?
And yes, Tatyana is absolutely right - the most important question is promotion. How to disseminate information about the service and attract customers - this is the most important issue.
I'd like to add also that we need to control and to measure the efficiency of diffenrent collection tools and reminders.
It will help in the future (maybe in 2-3 years) to develop an artificial intelligence system helping to form the most effective algorithm of collection for different group of debtors.
Before this we could help the customers to divide the debtors into different groups with different collection approach manually (for an additional fee).
I suppose that different groups of debtors (big and small, domestic and foreign, etc.) need different approach. And if we could take this into accont we would be able to develop more efficient system.
For different groups of debtors, there really must be different work regulations.
It is quite realistic to prescribe such an algorithm for different categories of debtors, depending on some parameters - the scale of the business, turnover, and other criteria.
This will optimize the interaction and make the soft-collection as efficient as possible and not very expensive operationally.
As a first step, we could try to sell our customers an audit of the system for working with debtors. This has not yet touched the collection itself and therefore it can be easier for customers to agree to such a one-time service.
And the result of this audit could be, in particular, the division of debtors into groups.