Tax season is underway—and that presents a prime opportunity to recoup delinquent funds. New polls found that 79% of taxpayers surveyed believe they’ll get some sort of refund each year with 27% of them predicting it will be larger than last year. Those tax refunds make a big impact in debt recovery since many consumers use them to pay off financial obligations.
So for companies with customers in delinquency, tax season is the ideal time to start strategically engaging with them. In fact, 47% of Americans reported earmarking their refunds to pay off their debt and with an even higher 59% of millennials specifically. Is your business ready to engage these consumers who are ready to repay with their tax refund through consumer-preferred digital channels?
More Consumers File Taxes Online—Your Business Should Embrace an Omnichannel Debt Collection Strategy
With consumers already planning on using their refunds to address those bills they’ve fallen behind on, businesses should reach them faster through their preferred channel—studies show that 59% of consumers prefer receiving payment reminders through email versus phone calls—which can lead to a more than 10% increase in payments when contacting them first through their preferred method.
One of the best ways to honor consumer preferences is to embrace an omnichannel debt collection strategy. By having the option to send consumers an email, text or voicemail drop, along with self-serve portals, your business increases the likelihood of collection messages being acted on. When digital communications are powered by AI, your strategy would leverage automated intelligence to optimize the right channel, time and message for each individual account.
Communication is Essential for Digital Debt Collection During Tax Season
Surveys find that 73% of people worldwide turn to online banking at least once a month, but that number jumps even higher when it comes to filing taxes: 93.8% of individual tax returns were filed electronically in 2023—which is one of the top six reasons consumers do their taxes online in the first place—so make it convenient for them to engage with you by reaching them using digital communication channels where they are already handling their finances.
Remember: you won’t know exactly when your delinquent customers will get their tax returns, so strategic engagement cadence (within compliance regulations) is key to staying top of mind, especially considering 28% of consumers fall into debt simply by forgetting to pay their bill. Ensure your customers are aware or reminded of convenient repayment options as they plan their seasonal finances. Some of the most effective reminders are the ones sent through each consumer’s preferred channel.
Leverage Machine Learning to Increase Engagement Without Adding Headcount
We’ve already seen that reaching customers through their preferred channel can increase repayment rates, but mass blast emails and generic SMS campaigns can be ignored just as easily as call-and-collect methods. An intelligent, multi-channel outreach strategy is the key.
Going beyond basic segmentation, artificial intelligence-driven technology can help engage with customers at the right time through the right channels—and Retain by TrueML Products delivers a proven strategy powered by a patented machine learning decision engine informed by engagement data from millions of customers. It assesses a multitude of customer interaction variables, from your message content all the way through engagement data, and provides dynamic performance improvements to your operations.
How Your Business Can Optimize Debt Recovery Performance During Tax Season
By leveraging advanced SaaS solutions like Retain, businesses can skip the hassle of hiring seasonal help to take advantage of the tax refund-to-repayment opportunities. There are only so many phone calls and manual digital communications that full-time employees (FTEs) can make within a given day (especially considering inconvenient time restrictions on calling), and that’s before putting any emphasis on tax season outreach.
Retain takes omnichannel debt collection strategies to the next level by using AI to scale digital communications. Retain’s AI analyzes each account’s engagement patterns and payment behavior to send consumer friendly debt collection messages that work.
Taking a digital-first delivery approach with Retain for consumer communications has actually shown to reduce the number of required FTEs by up to 75% for customer outreach, plus 4x increased efficiency for the FTEs on staff.
Get Your Digital Debt Collection Strategy Ready for Tax Season. Get Retain
Consumers are already planning on using tax refunds to pay off debt—your customers are no exception. Be there to engage them when they’re ready with digital communications that honor their preferences.
Don’t let repayment opportunities slip by this tax season. Start with a consultation today!
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