How to support customers in collections over the holiday season
Can you hear the bells? The holiday season is well and truly here, and it’s expected to be a big one for consumer spending. Findings from Deloitte’s 2023 holiday survey indicate that consumer spending will exceed pre-pandemic figures, with an average spend of $1,652.
While this is great news for the economy, how does consumer spending over the holiday season translate into collections?
Let’s explore what to expect for your collections over the festive period, with behavioural and seasonal insights from our customer engagement data.
Be flexible over the festive period, as customers are highly engaged to pay between January to March
Setting a financial new year resolution to become debt free is overwhelmingly common. In fact, out of 2,000 Americans surveyed this year, 2 in 3 plan to make a financial resolution, and the most popular is to pay off debts.
This reinvigorated focus on resolving debt is reflected in our data - in the first two months of 2023, we saw a 25.5% rise in conversion rates.
This is reflected in a spike in both payments in full and payment plans at the start of the year over the past two years. The numbers are significant - in 2022, increases in payments in full between January to February rose by 82.4%, and 77.5% in 2023. We see a similar theme in payment plans, with an average 13% increase between February and March.
Be prepared to support an increase in volumes in the new year
When the new year rolls around, expect overdue account volumes to ramp up. The ability to scale quickly, compliantly and with a strong customer experience will be critical as the impacts of economic uncertainty coupled with holiday spending flows into collections.
Over the holiday period last year (from December 2022 to January 2023), we saw a 71.1% increase in account referrals. This evidences that budgets eb and flow over the festive season, and it’s easy for a bill or payment to slip.
It’s more important than ever to make sure your collections partner is prepared to handle the influx in volume, especially as the tax season deadline is right around the corner.
5 ways you can prepare for shifting priorities in consumer spending
Where priorities shift to buying gifts for loved ones, eating out and celebrating, it’s understandable that the average consumer has less cash available to manage unresolved debts. To meet their needs over this period, it’s essential to focus on positive engagement strategies that encourage people to interact with their debt in a way that feels manageable. This means:
- Enabling customers to edit any existing payment plans if they need to change the amount or frequency of payments over the holiday season
- Allowing people breathing space to pause collections communications over the holiday season. When you re-engage with them in the New Year, they’re more likely to feel supported and ready to get back on track
- Increasing the availability of flexible payment options such as partial payments, so customers can still contribute to resolving their account - even if it’s not the full amount
- Provide the ability to self-serve through an online customer portal. When family and celebrations take priority and time to speak over the phone is limited, people will be more inclined to manage their debt digitally
As consumers fill their baskets, the flow impact of increased spending entering into collections shouldn’t be underestimated. Ensuring that your offering provides customers with flexibility, choice and digital-first options is essential to ensure you’re supporting them for this season, and beyond.Learn more