Some people may think that empathy in debt collection is extraneous. That it’s irrelevant in our cut-throat world, where only the most cold-hearted grasp on credit control is an option. In reality we should recognise that empathy is a vital business skill that is critical to any debt collection process, particularly during these turbulent times. Empathy is at the core of debt collection efforts which understand, anticipate, and help lead to meaningful, concrete returns. And empathetic business practices should be at the forefront of any operation that strives to be ethical and fair.
What is Empathy in Debt Collection?
The official definition of empathy is “the action of understanding, being aware of, being sensitive to and vicariously experiencing the feelings, thoughts and experience of another”. But Psychology Today takes it further, theorising that the process of empathising develops our resilience. When you can listen and appreciate the other party’s point-of-view, conflict is decreased and success can be reached. “Empathy should be embedded into the entire organization,” writes Belinda Parmar in the Harvard Business Review. “There is nothing soft about it. It is a hard skill that should be required from the board-room to the shop floor.” When it comes to debt collection, the application of empathy is not about being weak. Instead empathy is about recognising the impact your actions have on other individuals, which is an essential business skill.
How Can You Exhibit Empathy When Collecting Debt?
1. Engaging Personally
Since empathy is by definition a human endeavour, empathy in the business world means reaching every human in a personal and caring manner. Adopting an omni-channel approach to communication and inviting customers to repay what they owe using non-threatening language, increases response and collection rates considerably. We live in a digital world of course. And consumers feel much happier receiving streamlined communication via channels they’re familiar with, namely SMS, Email or Live Chat. They can respond in their own time in the most convenient manner available to them.
2. Offer Solutions and Find a Compromise
In these challenging economic times, empathy can be incredibly useful in terms of providing businesses with the ability to put themselves in the position of the debtor, and then work together to proactively find a solution. Automated debt collection software works to personalise payment arrangements and create solutions. Thereby allowing customers to engage and resolve accounts in ways that work positively for everyone.
3. Recognising the Bigger Picture
Although your debtor’s payment is overdue, you may wish to retain their business in the future. By being fair, communicative and empathetic, your customer service improves and clients are likely to return to your business in the long term. Empathy, active listening, and understanding are the key to resolving debt. And they can be the cornerstone of maintaining long-term, strong client relationships.
As the market changes during these turbulent times, debt collection practices that don’t exhibit empathy will not find success, nor will they be ethical. Entrepreneur reports that nurturing empathy leads to numerous benefits, including improved sales, an increase in productivity, and a clear competitive advantage. Thinking of others ironically leads to our personal success.
More information on Lateral’s debt collection services can be found here.