Why SMS For Debt Collection
Are you fed up with the process of continuously reminding customers about outstanding payments? Or, have you been using agents to collect the due amount from defaulters?
Well, if that is the case, there is a solution — SMS for Debt collection — to the never-ending issue, many or more or less all creditors face while lending out to people from varied backgrounds.
When you approach the borrower with a politely-worded personalized text message, chances are payments will be made on time, and your investment on other expensive channels will be reduced drastically.
By using this 160-character cost-efficient channel, you can persuade clients to pay on time and avoid delayed payments, which usually is the main cause of worry for creditors.
However, what must be kept in mind while collecting debt is the Fair Debt Collection Practices Act to avoid abusive, deceptive, and unfair debt collection practices.
Use SMS to Lessen The Burden While Collecting Debt
There are enough reasons for you to use this channel for debt collection. Not only is this one of the widely used channels to engage but when it comes to open rate, SMS suppresses the previously dominant channel — email.
Besides reminding people about the payment through emails, which are rarely opened, using the calling option does not help in the long run either. The return on investment while using calling or email channels is not what any lender would look for. This is because clients either ignore the calls they receive or brush aside emails when contacted for due payment.
Once the SMS channel is employed for debt collection, the need to invest a hefty sum in other means for debt collection can be brought down, helping not only reduce financial costs but the time can be saved as well.
How to Use SMS For Debt Collection
Below are the ways SMS medium can be used for the otherwise laborious process of collecting debt from clients, mostly defaulters:
- Send a payment reminder
All of your clients may not be deliberately avoiding payments on time. Due to their busy schedule, many do forget to pay the outstanding amount.
For them and others as well, a simple text will avoid the usual delays in payment.
- Schedule text messages
Another feasible way to ensure payment on time is to schedule texts. One message can be sent to clients a week prior to the due date. The next message can be scheduled on the due date itself and another one can be a week afterward or whenever the lender deems it viable.
There are studies that conclude: clients receiving a payment reminder message on the due date usually pay on the very same day and avoid legal and other financial repercussions for the delay.
- Personalize Reminders
There has never been a better way to address the client or people in general than addressing them with a name, and it will be helpful to make the message personal.
- Include Account details in the message
Besides the name of the addressee, including account details will have a major impact on receiving payments.
- Use Autoresponder
For any query to be addressed, using SMS Autoresponders does help a lot in communicating with clients who want issues to be solved immediately.
- Check Status
Not only can you send timely reminders, but you can also check the status of sent messages on the dashboard of an SMS service provider, like SMSala.