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Collections letters - Is it what you say or how you say it?

The way in which you communicate with your debtors really does impact the effectiveness of your collections operation.  Experian recently carried out research and produced a briefing paper highlighting that the correct tone of voice used in collections correspondence is essential. In short, what you say is important, but how you say it has a critical impact on its effectiveness.

To help guide best practice in this area and provide areas for consideration when designing and implementing customer letters within a collections strategy, Experian commissioned a programme of qualitative research to explore how consumers react to the words used to communicate with them about their debt.

The research employed two focus groups of varying demographic backgrounds in order to obtain a broad perspective. This aided evaluation of the aspects which produce a positive response, without causing inappropriate anxiety. The focus groups were shown collections letters from different stages of the collections process. These were a mixture of actual letters currently in use and letters drafted by a specialist communications consultant to reflect alternative “softer” and “harder” approaches as a means of eliciting opinion and reaction from the groups.

The group’s role was to review the tone of voice used in letters throughout the collection and debt management lifecycle. The variance in tone was considered by the groups to help identify the aspects deemed to be most appropriate and effective. The discussion process is outlined below:

The impact of the effective use of tone of voice in collections letters

The research found that short and concise letters stating what is owed - what the debt relates to and what the consequences of non-payment are - were found to be highly effective in the collections process.

Interestingly, in some cases, the actual letters currently in use were not deemed as effective by the group as the alternative sample letters presented.

In order to truly evaluate the impact of changes made to collections letters the implementation of champion challenger testing should be used to provide an accurate measurement in a controlled environment. To read more on this subject please refer to the briefing paper Identifying the Optimum Collections Strategy Using Champion Challenger Tools.

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