No one plans to fall into debt. But with inflation impacting the cost of living worldwide, consumers are feeling the pinch now more than ever. Individual financial positions are in a state of flux, and key to placing consumers at the heart of our product is ensuring that we’re always responsive to their experiences of debt. This means building new and improved ways to support them in our product roadmap.
We carried out 1:1 interviews with 10 of InDebted’s real customers to understand:
- What was their first impression of InDebted when we contacted them?
- What steps did they take to resolve their debt?
- What factors did they consider when looking at their payment options?
- Are there any additional payment options they would like to be offered?
Here’s what we learnt:
1. Earning customer trust is central to supporting them to take action on their debt.
All participants said they’d had previous experience with a collection agency, and the majority referred to these interactions as aggressive, demanding and threatening.
“...it just started all of a sudden, just kept hounding me with text messages and threatening legal action and stuff. There was no intermediate phase. It kind of went from like nothing to like, we'll sue the crap out of you. It's just too aggressive.”
Their encounters aren’t unusual, as our existing research into the experience of debt in the UK evidenced that 2 in 3 people said their contact with collection agencies was “stressful.” These experiences leave a bad taste for customers, making them withdraw from their debt due to the all too common shameful and pressuring encounters. This places an additional emphasis on the need for products like ours that demonstrate empathy from the very first interaction.
Building trust from the get-go is a necessity. It transcends beyond simply how a debt collectors’ customer service teams treat people in debt - it’s about ensuring that every single touchpoint a customer encounters establishes trust and builds consistency - including the look and feel.
Taking this insight on board, we’ve recently shipped multiple new features and developments to build trust and empathy into our product. Already, we’ve seen a 6% increase in conversions (people who open a communication and make a payment), and in Australia specifically, a 2% improvement in click through rates (people who open a communication and click to our customer App). When you reflect that we support millions of customers with debt, these are no small numbers. By continuing to invest in building trust and improving product experience, thousands more customers set up a payment plan or make a payment on their account. And with over 2,000 4.9 star Google reviews, we know our experience is already miles ahead of other debt collectors.
3. Financial situations are in a state of flux, now more than ever. Payment plans need to be responsive to this.
In today’s society, linear monthly paychecks are no longer the norm. For some, there may be ad hoc bonuses, for others there may be overtime or a varied set of working hours. Considering this, it’s understandable that at least half of our participants said creating their own payment plan that can be tailored to their situation is ideal.
“You know, once I started paying it twice a month, then I was still somewhere between the first and the third, then I did it again around the 16th. That was my choice. And that's what I liked about it. They did give me choices.”
Our payment plans currently give customers the choice to select:
- The date they’d like to start making payments, so this can be tailored around their pay cycle or when they will next receive income.
- How often they’d like to pay - weekly, fortnightly or monthly, depending on their pay frequency.
- An amount that’s affordable to them - our payment plans make a recommended payment amount depending on the total amount owed and pay cycle selected, however customers can choose an amount that works best within their budget.
Going further, some people mentioned they’d welcome further flexibility:
“If I could jump online once a week and pay one sum of $120 through my account or whatever, I would've done that, but direct debit suits me fine. I do it for little things and it's just really convenient.
“…and then the next fortnight, I don't have rent and I can pay a lot more, you know what I mean? So if I could pay X amount this week, and this much next week, that would be better.”
In practice, this means giving customers on a payment plan the ability to make amendments to their schedule or method of payment directly in our debt management App. It’s not just about enabling customers to conveniently self-serve in their own time, but we also understand that for many, having to pick up the phone and speak with someone about debt can create feelings of shame or embarrassment. We’re removing this entirely by making it possible for people to create the action they need in just a few clicks.
As for what else is on the product roadmap for payment plans? We’re providing a more contextualised experience for customers. For example, for those who have a large debt, our data indicates that they’re more likely to set up a payment plan as opposed to resolving the debt in full. Ensuring they understand the benefits of this option, how they can tailor the schedule to suit them, and making it straightforward for them to self-serve is key to optimising the experience. Ultimately, our goal here is to support customers to take proactive steps to get their debt under control - even if the full amount may be daunting, it’s about empowering them to pay it back in manageable ways.
3. Customers require intuitive support to make more sustainable, affordable payments
When setting up a payment plan, the primary factors people consider include:
- Essential living expenses - rent, food, household bills
- Other regular payments - subscriptions, phone bills
- Payday loans - which can be on a monthly, weekly, or fortnightly basis
- Unexpected, irregular payments such as car repairs or a vet bill
- Long-term impact - the length of time it would take to resolve the debt (once an amount and frequency has been selected)
“We worked out an amount that isn’t going to affect our ability to meet other essentials, our ability to live comfortably, you know, pay other bills that we're constantly getting in, but still progressing with this debt. So considering these factors, we worked out what would be best for us.“
Outgoing expenses, bills and budgets look different for everyone - while it’s evident that there’s common factors people consider, the affordability and decision making process looks different for every individual.
In order to set up a payment that’s going to be both affordable and sustainable to maintain, our product’s payment plan set up feature places the ease of the user experience front and centre.
This means reducing the cognitive overload that can come with budgeting and affordability. People shouldn’t have to do mental gymnastics to figure out how to pay back their debt amidst their other commitments, and so our payment plan creation process is as streamlined and intuitive as possible. Beyond a clear design and UX, we’ve even rolled out machine learning models that can help customers determine a payment plan that’s going to work for them, that’s personalised to their individual financial position. They can choose to proceed with the recommended payment plan, or have the flexibility to create their own from scratch.
It’s not just about the platform - it’s the outcomes. By giving customers the opportunity to take a holistic view of their situation in order to make sustainable choices and maintain their payment plans, we’re able to anticipate customers’ needs, and exceed client recovery expectations.
Changing the world of consumer debt recovery means constantly listening and adapting to the needs of our customers. To achieve maximum impact, our Collect product has to consider those needs at a microlevel - insights that can only be unlocked by gathering meaningful feedback from people experiencing debt first hand. And the superior recovery performance we’ve created using these insights shows that the constant improvements we make to our product pave the way for more people to become debt-free, in a way that works for them.