February 25, 2019

Collectors: Don't Reinvent The Wheel, Just Redesign The Letter

The collection letter; that piece of paper that every collector sends out on behalf of their client, to a debtor who they hope becomes a payer. You may have heard it isn’t working anymore, usually from someone trying to sell you a solution like texting. Yes, I am referring to the obligatory, physical collection letter; more broadly known as an invoice, bill, or statement, sent with the intention of collecting money. 

That costly piece of necessary postage is cumbersome to deploy, hard to track, and probably hasn’t been optimized (to maximize collections) or even updated in the last five years. So why does a tech startup Founder recommend it as one of the first places to focus when integrating new collections technology?  
 
Because these numbers can’t be ignored: 

 ●      98% of people bring in their mail the day it’s received[1]

●      83% percent of Millennials still use hard copies for bill management, 88% say it’s more official, and 82%say it's more trustworthy[2]

●      80-90% of direct mail gets opened[3]

The most plainly stated and important reason for reexamining your collection letter and how it relates to your technology, is summed up in research done by Accenture on Millennial shopping behavior:  

“When it comes to shopping, we found that 68 percent of all Millennials demand an integrated, seamless experience regardless of the channel.”[4]

If you haven’t had that “aha moment” yet, then let me share the personal experience that inspired this writing. I recently changed insurance companies and received my first invoice in the mail. Like most Americans, I prefer to pay my bills online. The invoice I received had three unique parts:the actual invoice, a 10-step instructional page of how to read saidinvoice, and a page that must not have mattered much because I put it down and it immediately evaporated into my already cluttered life.  

As I quickly looked for the “Pay Online” URLI found myself reading a paragraph that started with, “We’ve redesigned the Direct Bill invoice to simplify how our customers manage their billing…” before realizing I was reading instructions on how to read the invoice and not the invoice itself.  

I picked up the invoice, and after about four minutes, out of sheer determination, I eventually discovered the “Pay Online” URL (bottom right hand corner, back side of the invoice, extra-small font), wentonline, and paid. Now that’s a poorly designed letter.  

Letters, while statistically proven to be one of the most effective mediums of commercial communication, are failing today’s collection agency because they ignore today’s payer preferences. 

For every piece of technology you implement, look at all the others connected to it, because to embrace new technology, you must “demand an integrated, seamless experience regardless of the channel.” Start at the letter.

This Article was authored by Josh Allen, Revenly’s Founder & CEO, and reflects the opinions of the author.


[1] https://www.pb.com/docs/US/pdf/Microsite/Nonprofit/ed_np_getyourmailopened_05MailMoment.pdf

[2]https://www.pitneybowes.com/us/blog/millennials-direct-mail.html

[3]https://fitsmallbusiness.com/marketing-statistics/

[4] https://www.accenture.com/us-en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail

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