25% Reduction in Missed Payments with Collections SMS Messaging
Pre-emptive, interactive customer communications enable the home shopping giant to nudge customers into action before they default on their accounts
Freemans Grattan Holdings (FGH), based in Bradford, West Yorkshire, is a large home shopping and e-commerce retailer owned by Otto Group. Its well-known fashion brands include Freemans, Grattan, Look Again, Kaleidoscope, Bon Prix, Witt International, Curvissa and Swimwear365.
Operating in a highly competitive market FGH is always looking for ways to maintain a quality service while keeping costs down and maintaining a healthy cash flow. Each year it must predict the extent to which customer accounts will go into arrears.
Historically FGH’s strategy for tackling missed payments was reactive, using dialler-driven call campaigns to collect overdue payments. To transform this situation the group sought a solution that could drive and automate pre-emptive outbound contact, reminding customers as payments became due but without the need for agent intervention.
On personal recommendation FGH chose VoiceSage, opting for a combined solution comprising Interactive Voice Messaging (IVM) and text (SMS) messaging. The customised service was up and running within a few weeks without the need to involve the internal IT team.
The VoiceSage system, which is cloud-based and rules-driven, can be fully controlled online by the collections team. FGH can vary call times to suit each target market – for example evening calls for young professionals, and daytime calls for older customers. Similarly the company can switch between text messages for younger customers and pre-recorded phone messages for those less likely to carry a mobile.
Since using VoiceSage to proactively target pre-delinquent accounts, has seen the following annual benefits
:
• 34,000 fewer cases of customers going into arrears through Interactive Voice Messaging alone;
• A further reduction in numbers of customers going into arrears of 16,000, enabled by pre-emptive SMS contact;
• A 10:1 return on investment in terms of the funds that have to be set aside to cover the risk of account delinquency;
• An increase in customer satisfaction as consumers are spared entering collections strategies and are able to spend more.
As a result of these significant successes FGH has expanded the use of VoiceSage across other parts of the group, for example delinquent account collections (previously handled solely by diallers in a contact centre), and to let customers know if an item ordered is not in stock.
Louise Mollicone, Senior Risk Analyst, Collections Strategy Management at FGH, comments, “We are very happy with VoiceSage. The solutions are very quick to set up, and very easy to use and adapt. It’s also very appealing that we can see what we pay for. We also get a lot of valuable advice from VoiceSage, who use their experience to show us what else we could be doing.
“As a business that lends to a diverse customer base, the sums we were exposed to in missed payments represented a significant level of potential balance we would have to fund in an arrears position. The return on investment has been substantial and is very visible.”
