Many collection law firms still use the traditional letters and the call-and-collect approach to debt collection. Over the last few years, this type of strategy has been getting pressured from two different sides. First, the cost of sending physical mail continues to increase with the price of stamps rising. And second, more consumers than ever before don’t prefer to be contacted by phone.
Collection law firms that want to improve recovery rates and expand their business need to think about taking a digital-first approach. In this post, we’re going to cover why more firms should go digital-first, the importance of leveraging the right email strategy, the power AI can offer and more!
Why Collection Law Firms Should Consider Going Digital-First
There are a variety of benefits for collection law firms that make the move to go digital-first:
- Operational Efficiency: Manual collections require law firms to hire more staff to effectively scale and/or dive deeper into existing portfolios. A debt collection software that specializes in automating digital communication channels takes the cost out of that process. A firm’s existing staff can manage a higher volume of accounts and connect with account holders through channels they prefer. *(Retain is software designed to augment attorney workflow. All final communication templates and delivery schedules remain under the ultimate “meaningful involvement” and control of a firm’s licensed attorneys.)
- Opportunity for Higher Cure Rates: The majority of consumers prefer to be contacted through digital channels like email and text by businesses. When a collection law firm leverages digital channels, their collection messages are more likely to be engaged with. Plus, some debt collection software uses AI to continually look for the best time, message and channel for each individual account holder.
- Digital Channel Preferences: A McKinsey survey found that roughly 59% of consumers prefer email as a first point of contact. And 65% of consumers want their payment reminders to be sent through text. According to TrueML’s research, contacting a consumer through their preferred channel can lead to a 10% increase in payments.
Email Goes Beyond Hitting Send – Email Deliverability Matters
Email is often the first step that many collection law firms take when implementing a digital-first strategy. While there are plenty of platforms out there that can send emails for law firms, only a select few have proven email deliverability expertise to help get messages seen.
When your business sends an email to an account holder, their email service provider could reject it, or assign it a tag like spam to the message. To make this decision, email providers look at subscriber interaction, the types of emails being sent, a recent history of the sender’s reputation and more. Email deliverability can be a challenge for collection law firms since they’re more likely to do bulk sends that could trigger spam filters and diminish their domain reputation.
All this means just because a recipient’s email provider accepts a message, it still might not make it into their inbox. However, there is debt collection software like Retain that has a dedicated team of email deliverability experts that help law firms with best practices like maintaining list hygiene and reputation management with ISPs so that more collection emails make it to account holders’ inboxes.
The Power of AI-Driven Engagement in Digital Debt Collection
Traditional collection law firms might segment portfolios in a semi-manual process using standard variables like the balance owed. Strategies like this can achieve some success, but firms are likely leaving money on table by not honoring consumer preferences. A digital-first approach using debt collection software that’s AI-powered can go beyond segmentation and tailor outreach based on consumer behavior and preferences.
AI can effectively analyze portfolios using past consumer interactions to help find the right message, time and channel for each account. The AI can update its process in real-time for each account based on what is driving payment and what isn’t.
Going Digital-First for Collections Often Isn’t Difficult
The thought of using debt collection software to adopt a digital-first approach might seem daunting for some firms. Tech overhauls can often be costly in both money and time. However, this isn’t the case with every option out there. Debt collection software like Retain can plug into existing systems (like CRMs) so firms don’t have to rebuild their entire tech stack to get the benefits of digital-first communications. AI-powered debt collection software is often designed to be easy for law staff to use and manage.
Spend Less to Recover More with Retain Debt Collection Software
Retain is white-label debt collection software that lets your law firms scale collections communications without ballooning operating costs and find more first-time payments in portfolios by sending digital communications at scale.
Retain allows for jurisdictional-based logic, ensuring that a firm can automatically include specific state-mandated disclosures in emails based on the consumer’s residence. If you’re ready to jump-start your digital-first collections strategy, our team is here to help. Talk to Retain today!
