The current global situation is a once-in-a-lifetime experience. The Covid-19 pandemic creates an environment of significant uncertainty. Behavioural scientists argue that in times like these, a strong sense of lack of control drives humans’ perception of risk. Look at the recent panic buying of groceries, sanitisers and toilet paper as an example.
We’ve compiled five key tips to help you balance your customer’s needs during the pandemic with your commercial objectives.
1. PLAN NOW
You cannot be slow to respond to the ongoing financial impact created by COVID-19. You need to think now about what your ledger will look like in 3 – 6 months.
We all expect waves of delinquency to hit. There is an anticipated negative impact on both business and consumers once the Government Wage subsidy evaporates by the end of June 2020, with further “waves” expected later in the year (for example, after the mortgage holidays come to an end).
Doing nothing does no favours for either your debtors or you. The good news is that now is the perfect time to introduce change. In times of uncertainty, people look to others to guide our behaviour and set our new social norms. It creates an opportunity for you to set that new standard.
So act now - but strategically, and in a socially, fair and reasonable way.
2. PLAY THE LONG GAME - BE SOCIALLY RESPONSIBLE
Few people will come out of this pandemic unscathed. As a business, your actions now will have far-reaching consequences through both the short and longer-term. Get it right, and you’ll create the new standard - the one others look to as the example. Get it wrong, and you are tomorrow’s front page.
Striking a perfect balance between maintaining your business needs and the needs of your customers is challenging. But it is also vital at a time where your brand reputation and social responsibility is potentially more crucial to the survival of your business than anything else.
The lesson? Practice integrative awareness. Remain calm, lead with confidence and demonstrate through values.
3. SEGMENT AS MUCH AS YOU CAN
This pandemic will see the re-emergence of a category of debtors that spike during a crisis - the unfortunate.
These debtors may not be used to being in arrears, so their embarrassment factor is heightened, and they need an understanding approach if you want to retain them. These customers have previously demonstrated that they have the correct values and behaviour to be great long-term customers. Ultimately our goal for these debtors is to rehabilitate them to a point where they can become great customers again once they overcome their short-term impact. Their prior behaviour suggests they will have the motivation and desire to do so.
As a result, you should identify them and treat them differently. But it’s not just about identifying the unfortunate as opposed to the bad. Segmentation of your ledger is now more critical than ever. You should attempt to analyse your customers and segment them to personalise the experience and maximise cashflow.
Think about how you can segment your ledger. Your team use Experience Engineering in all other aspects of your business, so why not your credit ledger. Instead of risk-based segmentation, consider behavioural based segmentation. In a time when fear is amplified amongst your customers, your goal is to avoid language or behaviour that drives, flight, punishment and loss signals to the brain. That’s what drives harassment and intimidation complaints.
4. WORK OUT WHATS CHANGED – AND ADAPT
Almost every one of your customers’ lives has changed from what they were. They may never be the same and are likely to have different waves of impact, some yet to be felt. Some are scared and genuinely concerned. Your sustainability depends on identifying how their payment and cashflow needs have and will change and how you can counter or support that.
Compromise doesn’t mean being a pushover, but it may mean looking at relaxing previously stringent rules. You can apply different rules to different segments.
Customers who have always been good payers aren’t likely to lose that conscientiousness now – they will be eager to “return to good” as soon as they can. You just need to use the right Framing and Anchoring techniques to help guide your debtor’s psychological journey. Let them feel you are both helping the work towards the same goal.
5. CONNECT
We’ve learnt a thing or two about people’s habits in the course of our 19 years in business. Some people will advise you they’re having financial challenges. Still, the vast majority will not – whether it be shame, burying their heads in the sand or having outright forgotten due to other pressures.
Reaching out to your customer base allows you to start the conversation now. Obtain valuable insights, such as whether their “return to good” is likely to be swift. For example although they have been made redundant, are they qualified in an essential and in-demand industry. This would mean the likelihood of speedy re-employment and positive cashflow.
Pre-empt the likelihood of difficulty with paying. We know for sure at this juncture that some people have financial constraints. Get in touch with your clients before their bills fall overdue. You are more likely to invite constructive dialogue and commitment to an alternative payment resolution before those outstanding bills become debts.
When you do reach out, get creative. Your clients don’t need an avalanche of communications about how you care for them; they need entertainment, comfort and hope. Clear, decisive information in a time where people are feeling powerless and uncertain is helpful. Studies show, its also beneficial.
If you are not already thinking about how the pandemic is going to set new norms, you should. Social responsibility by all business is now more crucial than ever but so are your business commitments. Managing your cashflow through the waves of economic impact remains crucial. For that, debtor psychology is going to play a big part.
As we said, the good news is, now is the perfect time to introduce change. So go navigate this crisis with confidence. But remain Human. It will help your brand in the long run.
If you need a hand, shout out.
