The Importance of Empathy When It Comes to Debt Collection

It’s uncommon for customers to associate the term “customer service” with “debt collections”. Customer service agents are often described as helpful and understanding, while debt collectors are known to be threatening, aggressive, and intrusive, among other things.

Unfortunately, there can be a kernel of truth to the stereotype. According to the research from ACCC, 56% of debt complaints recorded during the financial year 2013-2014 were classified as “Misleading or Deceptive Conduct”, “Unconscionable Conduct”, and “Harassment or Coercion” by debt collectors.

The very purpose of debt collection is to recover outstanding debts that are legitimately owed. This can occur in many ways, but ultimately there is a significant reliance on personal contact with a consumer or business if such an outcome is to be achieved.

For this reason, and the fact that most businesses consider using call centres to be more effective than other methods of collection, it’s extremely important to teach the agents how to handle customer’s crisis with empathy.

What is Empathy?

what is empathy

At its core empathy empowers us to understand other people. Whether those people are our employees, colleagues, or in this case – debtor – empathy helps us to connect with them and understand what they need.

It’s important for debt collectors to understand the difference between empathy and sympathy. Empathy is the ability to put oneself in the position of the other person and think proactively towards a solution, whereas sympathy is just feeling sorry for someone. In debt collection, collectors are tasked to help the debtor to solve one or more problems. It takes compassion, creativity, good judgment, and enthusiasm.

When we understand exactly what problem the debtor is facing, we can assist them in finding feasible solutions. Such approach causes loyalty, satisfaction, and engagement. Empathy is key to success and it has the power to transform the way we think, work and lead our business.

Importance of Empathy in Business Relationships

Every debt collection scenario requires an understanding of the business relationship and what’s at stake. Although your client’s payment is overdue, you may wish to retain the client for future business or for referrals.

Or maybe the client wasn’t your ideal client or a good fit for your business. Perhaps there was a confusion or a lack of information when you invoiced the client. There may be all manner of reasons your client didn’t pay their bill on time. Thus, empathy, understanding, and listening skills are important to resolving the debt. Without these, no business relationship would stand the test of time.

Call Centres: Putting Human in Debt Collections

Call Centres Putting Human in Debt Collections

Despite the continued reliance of businesses on new technology – such as AI and Chatbots – it’s of utmost importance to keep it as human as possible, which can be done through call centres. According to the same research mentioned above, larger debt collection businesses are making greater use of offshore call centres. Of the 38 debt collection businesses surveyed or interviewed, 10 stated they maintained an offshore capability.

The use of call centre technology in debt collection ensures that the business will be able to connect with their clients more effectively. When utilised properly, the offshore call centre can help the business achieve an improved compliance culture due to the recording and monitoring of conversations and an improved ability to isolate systemic issues or problematic behaviours relating to debtor contact.

In conclusion, while customer service isn’t always about delivering solutions, it’s always about delivering empathy – and it’s important to apply this approach in your collection service.  When you empathise even with the most difficult customers, you will be able to ensure positive customer experience that will help you achieve the goal of assisting the customer, and ultimately, set your business apart from the competition.

Contact Global Outsourcing today to learn more about our Offshore Call Centre Solutions.