to debt collection ?
Steps to Customer Segmentation
Segmenting resolves obligations in a way that resonates with customers while improving collections rates and follows the following steps :
Centralize Data
Before you begin segmenting your customers , you need to have your data in one place . Centralized data provides a comprehensive view of each individual customer and their behaviors .
It also increases collector efficiency . If you don ’ t centralize your data , it is easy to overlook customers and important information . Not to mention , the time it takes to sift through data has a negative impact on productivity .
Determine Segmentation Criteria
Once all data is centralized , you can determine how to segment your customers . All institutions segment for different reasons , and will have different segmentation criteria .
Depending on your business , there are
plenty of different factors to consider , including : Age , Amount of Debt , Behavior ( willingness to pay off debt , ability to pay off debt , attitude towards collectors , etc .), Gender , Income Level , Location , Number of Debt Obligations , Type of Debt ( car loans , credit card , utility bills , student loans , etc .)
All these factors help paint a clear picture of the individual who owes . They will help you gain a better understanding of the individual ’ s current position and how you can advance the debtor in the process . These factors also help collectors make the right offer at the right time , improving results and preventing cases from worsening .
Segment Customers
When determining the criteria in which you want to segment your customers , it is most effective to use collections software . The software makes it easy to log , track and implement all the behavioral and risk criteria you need for effective segmentation . Manually , this process would take significant amounts of time and money . The software automates it so you can better understand customer needs and act upon them .
Take The Right Approach
Each segmented group has specific wants , needs and methods of accessing solutions .
Develop a plan to take the right approach to your target markets .
For example , the modern debtor expects solutions available 24 / 7 . They use different online channels ( like mobile , social media and self-service options ) and carry multiple debt obligations . Collectors need to approach these debtors differently than individuals who went delinquent on a debt they took out 20 years ago .
Conversations with each type of customer require you to use a different tone and have specific goals in mind . Draft communications scripts to ensure your organization is making the most of its segmentation efforts . You will tailor messaging better , collect more and reduce the number of cases that move to delinquency .
A lot has been written on ways to optimize your collection , but the simplest and most effective way is still to segment your debtors based on propensity to pay . Debtor segmentation is a best practice that every serious collections operation needs to utilize .
Wasilwa Miriongi is a Certified Credit Professional currently working as the Managing Director , Del Creder Credit Management Limited . You can engage him on this or related matters via email at : WMiriongi @ gmail . com .
GYPSUM CEILING WORKS PARTITIONING WORKS PAINTING WORKS FLOORING WORKS CCTV , ALARM , SECURITY SYSTEMS
Beyond Homes & Offices Beyond Homes & Offices Beyond . kenya