Experience shows that utility companies can better weather downturns by cleaning up their credit process and minimizing overdue debts. However, that’s easier said than done. Utility companies need to serve enormous populations of the general public, but not everybody has the money set aside.
People need utilities in their homes, but they don’t always have ample money to pay, especially as costs are rising. It’s a tough position. There’s no way to run a home without turning the lights on and running the heat in winter. Electricity prices are rising, as are housing costs and other essentials.
If people feel squeezed, utility bills are the first things they may struggle to pay. Yet the impact of overdue payments can harm your company and pose a major obstacle to its operation. Thankfully, there are a few things you can do to help prevent this unfortunate scenario from occurring.
Utilize Data to Understand Customers
When you know who your customers are, it’s easier to anticipate a potential bad debt from forming. Good predictive analytics, alongside leveraging existing customer info against externally sourced data, helps companies spot high-risk customers in advance.
Once you know a customer’s risk level, you can monitor them a little closer. Reports like this work like a credit-scoring model. You don’t need to overanalyze the data or break it down too deeply.
Broad categories are enough to provide a warning. For example, people whose low income puts them at risk for non-payment or those who simply choose not to make payments.
How you contact or reach out to this type of customer may depend on factors unrelated to the category you filed them under. For example, older customers tend to be less tech-savvy and less likely to rely on apps or other digital technology.
Having a credit-risk strategy helps you recognize potential signs of pre-delinquency. There’s no guarantee, but customers who engage in certain behaviours are larger risk of missing payments.
Some early signs of pre-delinquency include regular inquiries into bills or billing disputes. For such customers, you need a gentle, supportive approach that offers them flexible chances to make payments. Utilities are essential, so it’s not as if you can pick and choose your customers. You need a reasonable and amicable attitude to bring the two sides together.
Summit A*R has a PHD philosophy, which stands for Preserving Human Dignity. Not only is treating people with kindness the right thing to do. We also manage to double the industry’s standard recovery rate without using the harsh, aggressive tactics sometimes associated with debt collection. Being friendly debt collectors has only helped secure more payments for our clients, sooner.
Taking measures to spot potential payment problems is one thing. Be caring, and try to improve your debt collection tactics before the problem grows any further. But you need to treat people with kindness, always.
Give Customers a Suitable Option
Customers very rarely withhold payments they could easily make. The more choices and flexibility you give them, the more likely they are to complete the payment. Summit A*R believes in offering consumer debt collection solutions that work for everybody.
If you throw people a lifeline, they’ll reach for it and appreciate it. Perhaps they can make more smaller payments, or you can find some other middle ground both parties can live with. Our expert negotiators know how to tactfully engage clients and get from them the best deal possible.
What options you present to customers is your decision if you have an in-house collections department. We’re happy to work with you to take this off your plate. Between our years of experience, our approach, and the resources at our disposal, we can get much better results than you’d on your own.
Summit A*R is proud to have a licensed private investigator running our skip-tracing department. Give your customers as many options as possible on terms they can meet. But if things really stall, or a debtor doesn’t want to be found, we can locate them and their assets and help them to come around.
Collecting debts involves navigating delicate situations between people and a complex legal system. You need to know the company you rely on can be tactful with customers and abide by all relevant laws.
Summit A*R is proud to have an A+ rating from the Better Business Bureau, a testament to our long history of success and satisfied clients. We take compliance with the Federal Fair Debt Collection Practices Act seriously, along with every other state and local regulation. Our staff undergo continuous training to proactively ensure we follow the rules.
Business leaders in the utility sector and elsewhere work hard to keep your business out of the red, but you need the debts you collect to stay collected. That means adhering to all the rules and laws. Using means outside the law to secure a debt isn’t only unethical; it will harm your reputation and your bottom line.
Working with the leading collection agency means that if all the strategies you’ve tried to prevent a collections problem from arising so far have failed, you don’t need to worry about what’s next. If you take steps to reach out to your customers when there’s an issue and act kindly and with good faith, and things still don’t work out, there’s not much more you can do on your own. Your HR team is more useful on core tasks related to their work rather than putting them on a fishing expedition when they don’t have specific training in things like negotiations.
If this is where you’re struggling, we’ll take it from there! Contact Summit A*R so you can get back to making business decisions about the future rather than looking in the rearview mirror to collect money that should be in your accounts already. Society relies on utility companies to literally power everybody’s homes, and there’s enough on your plate as is. If your debt collection strategies aren’t enough, give Summit A*R a call.