Why Digital Collections Is the Future for Property Rentals

0

By Ohad Samet

As a landlord, you’ve probably had tenants move out without paying rent or move out with damages that exceed the amount covered by their security deposit.

This is money that you need, and are rightfully owed.

  • When trying to recover it, should landlords hire a debt collector or contact their old tenants themselves?
  • How should landlords think about debt collection as it relates to their brand and cash flow?

While other aspects of rental property management have evolved with new technology and the Internet, collecting on past-due accounts hasn’t.

Traditionally, landlords focus on call-and-collect tactics and mailed statements, an unpleasant user experience that creates adversity—and usually proves futile. In today’s digital age, people move, but online identities are pretty stable.

Consider digital collections and mobile-first approach

It’s time to consider a digital- and mobile-first approach to collecting past-due amounts and protecting your brand, while making your accounts receivables whole.

We handle nearly every aspect of our lives online and through our smartphones. From ordering food delivery or summoning a rideshare car to online banking, consumers have come to expect a digital-first experience for almost everything. With the barrage of robo-calls in the past few years, even those of us who prefer calls to online are having a hard time. Debt collection isn’t exempt from this trend. It’s not just millennials, but people of all generations who have moved their lives partially or completely online.

Going digital isn’t only about reaching consumers more easily; it’s not enough to just start sending emails. The overall user experience tied to digital communications such as emails, text, push notifications, chat, and so on, matters a great deal, since consumers have rightfully grown accustomed to better service through digital means.

The design, timely delivery, content, and tone of those messages matter. So does the post-click experience, once they land on your website or talk to an accounts-receivable clerk. Collecting debt with empathy in the digital age is both an art and a science.

Confused? Not sure where to start? We gathered a few starting points for you:

Understand and acknowledge your tenant’s point of view

Engaging with an old tenant isn’t easy when you’re trying to collect on rent money and/or compensation for repairing rental unit damages.

Nevertheless, acknowledging that your tenants may also be going through a rough time can help you start a productive conversation. It’s a first step to help rebuild that trust between you and your former tenant. Having an empathy-based collection-outreach program ensures you are building upon that foundation of trust with respect and dignity.

Make a plan to diversify your engagement channels

Design a process that involves reaching out via multiple channels (e.g. email, text) over several weeks, in a way that is both persistent but not overly invasive.

Stay away from aggressive, automated-dialing campaigns or multiple contact attempts per day. While you may think that such methods will get you paid more often or faster, the reputational and legal risk is just too high. More often than not, aggressive calling results in the exact opposite of what you want, which is complete disengagement from the people you’re trying to reach. Design a program aimed to engage and maintain a conversation, rather than using digital channels to more effectively pester consumers at a high frequency.

Lead with and uphold your empathetic approach

People will not always respond exactly the way you want to in your attempts to get in touch.

While some may appreciate your kinder, empathetic approach and try to work with you, others will be evasive, scared, angry, and even verbally abusive. When the latter happens, especially on a call, the temptation to “get back” at the tenant will be strong—and utterly wrong. Again, acknowledging the other person’s feelings and communicating that back to him or her helps your tenant feel understood.

You should be prepared to offer payment plans as an option when acknowledging that maybe they can’t pay it all in full at that moment. Sticking to a pre-designed, pre-written empathetic script and process is key to improving your success rate.

Optimize, optimize, optimize

Write the best messages possible, set up a consistent process that leverages empathy and collect data on what works and what doesn’t.

Optimization isn’t an end goal, but a practice. You can change the time, frequency, channel and content of your outreach attempts, as well as the payment arrangements you offer. Finding what works for you and your tenants is worth the time and effort.

Seek professional help

Sometimes people just aren’t willing to talk, or your internal team members don’t have the bandwidth to continually optimize the process.

That’s when a new wave of digital-first, data-driven collection services can augment, and often take over, collections once you’re no longer interested in running it in-house. Seeking professional help can also open up new communication channels that would otherwise be too labor-intensive to implement on your own, such as emailing and text messaging at scale. Find a provider that can understand and support you while ensuring you get paid and providing you feedback.

Transitioning to a digital collections strategy is well worth the effort. The saying, “you catch more flies with honey than you do with vinegar” is particularly relevant in collections. Having the right empathetic approach and partner will result in higher recovery rates, and better relationships.

Ohad Samet is the co-founder and CEO of TrueAccord, the leader in digital collections. TrueAccord’s machine-learning platform adapts to consumer behavior with personalized and empathetic communications to deliver the right payment option at the right time and on the right channel. By focusing on great user experiences, TrueAccord provides businesses with superior debt collection results. For more information, visit www.trueaccord.com.

 

 

Share.

About Author

By The Editors

Comments are closed.