By Nic Marshall, CEO, ResQ
Your overall business reputation is made up of perceptions amongst key groups of stakeholders including employees, customers, investors and local communities. A positive reputation helps attract and retain customers and employees alike. According to research by Ipsos Mori, the vast majority (87%) of consumers around the world say that they take the reputation of the company into account when purchasing a product or service.
Reputation works both ways, with negative reputations having the potential to destroy businesses very quickly. As the investor Warren Buffett famously said, “It takes 20 years to build a reputation and five minutes to ruin it.”
The way a business manages customer relations, including its customer debt, is one of the single most important factors affecting their reputation. This is particularly relevant in the age of the empowered consumer where online reviews platforms offer an impactful way for customers to share experiences and opinions.
The pandemic and shifting customer needs
In the new reality, many people are experiencing unexpected financial difficulties brought about by adverse economic conditions and mass redundancies. Many of them didn’t imagine they would ever be in a situation where they would not be able to service their arrears or payments and are finding themselves in a frightening and vulnerable position.
Truly customer-centric organisations will recognise this change in needs and expectations, and adapt accordingly. They will understand that it is time to shift away from the old ‘debt recovery’ transactional paradigm to a far kinder and more genuine approach to customer care, providing much needed support to their customers as they navigate through the new normal.
Communication plays a central role in this approach. It should always take a supportive stance and focus on alleviating rather than intensifying people’s worries and anxieties.
Crisis as an opportunity
Crises such as the current global pandemic present an opportunity to grow and strengthen business reputations. For example, Mailchimp pivoted its business model during the 2008 recession and added a freemium business. Within a year, its user base grew from 85,000 to 450,000.
There are several avenues for strengthening business reputations through a more responsible and customer-centric debt management approach. These may include the concept of ‘debt
forgiveness’ where customers are offered flexible mechanisms, such as deferrals, staged payments or payment holidays.
Such frameworks have the potential to enhance customer loyalty. Customers that have been offered flexible options are likely to return to brands that have provided a high degree of support and empathy during a difficult period.
The role of outsourcing
External partners can play an important role in putting in place appropriate communication and training frameworks for responsible debt management, including comprehensive planning and preparation. They can also provide counsel in relation to policy, compliance and processes, provide trainers, supervisory resources and frontline resources, develop templates and set up analytics/reporting.
It is recommended to find a debt management partner who can demonstrate brand and cultural alignment and understand your company values and reputation. Their expertise can be invaluable in enhancing your reputation during a uniquely challenging time.
ResQ’s ‘Debt Management in a New Debt Era’ whitepaper delves into the challenges associated with changing customer needs during the pandemic and provides guidance on some of the key areas of debt management. To download the whitepaper, click here.