September 2014

TrueAccord

Behavioral Economics in Debt Collection

• TrueAccord overview (3min)

• Behavioral Economics, and its relevancy to collection (5min)

• Common customer types and how to handle them (20min)

• Summary (2min)

TrueAccord Agenda

•  Technology reduces friction

•  Adapts to the digital consumer’s preferences

•  Data enables extreme personalization

•  Preserves customer relationships

•  Used by leading tech and lending companies

Reinvent the way debt collection is done

TrueAccord About TrueAccord

“[This] has to be the funniest bill collection I have ever had and it actually made me want to pay.”

- Mike M.

“Nice Service, good payment plans.”

- Krystal V.

“Well, my company owes money, so we can’t exactly say “Rocks!”. But your service is excellent and you have been very accommodating. Your website is simply to navigate and you make it very easy to make payments.”

- Elliot F.

“You guys are doing it so well, that I would love to talk to you guys about my other debts.”

- Tomas C.

What Customers Are Saying TrueAccord

What is Behavioral Economics? TrueAccord

Behavioral economics is a field that examines the way individuals make economic decisions, and the factors that influence those decisions.

•  Do we make rational decisions?

•  Can our decision process be manipulated?

•  What drives our decision-making?

Why Behavioral Economics in Collections? TrueAccord

•  Takes the voodoo out of agent driven conversion

•  Broadens your toolset and improves conversion

•  Cooperation improves retention and LTV

Many of your customers choose not to pay for reasons unrelated to their personal morality. Our detection and classification of the following profiles are proprietary.

Common Customer Types TrueAccord

The frustrated customer has had a negative experience with your product. •  Feels cheated by the fine

print •  Struggles with a difficult

dispute process •  Had a bad service

experience

The Frustrated Customer TrueAccord

Solution: Give them a stage and an outlet for their frustration, then invoke reciprocity. •  Allow them to vent •  Leverage the debt dispute process •  3rd party involvement helps reframe their

bad experience

The Frustrated Customer TrueAccord

The price sensitive customer is looking to get the most value for the lowest payment. •  Often driven by some

dissatisfaction •  Definitely not your best

customer •  Thinks rationally about

value, but can pay

The Price Sensitive Customer TrueAccord

Solution: Create scarcity and a sense of urgency. •  Anchoring in settlement negotiations •  Explicitly reducing discounts

The Price Sensitive Customer TrueAccord

The defeated customer has real financial difficulties. •  Often on the brink of

bankruptcy, owes money to 4-5 creditors

•  Manages by excuses

The Defeated Customer TrueAccord

Solution: Personify the obligation to create a sense of commitment. •  Use gender and age matching names

and photos of agents •  Sports metaphors especially effective in

the US •  Use a “coach” voice to drive to action

The Defeated Customer TrueAccord

The disengaged customer feels that disregarding the problem will make it go away. •  Often is young and

overwhelmed •  Might be able to pay,

but doesn’t think it’s a priority

The Disengaged Customer TrueAccord

Solution: appeal to their need of social acceptance. •  Discuss what others like them are doing •  Emphasize the social status in being up

to date on commitments •  Call them out as outliers

The Disengaged Customer TrueAccord

•  Behavioral economics allows better

segmentation and treatment •  A scientific approach helps demystify

agent interaction •  We looked at several types and

suggested responses based on TrueAccord’s experience

To summarize… TrueAccord

THANK YOU For more:

hello@trueaccord.com

http://www.trueaccord.com/resources

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