Technology has permeated every aspect of our lives. Despite this, current levels of consumer tech literacy are surprisingly low. Consider that:
So why should your business care? For starters, there has been a 72% rise in digital banking app adoption throughout Europe during the pandemic. But if consumers don’t know how these tools work—or inadvertently put themselves at risk while using these tools—then your company might be held responsible. Take Google, for example, which is currently facing a $5bn lawsuit after it was deemed to have misled consumers when explaining how its private “Incognito” mode works.
But there’s more to consumer tech literacy than merely avoiding potential lawsuits. By actively supporting your consumers to become more tech-literate, you will improve how people perceive your brand (i.e. your brand image). You will also enable quicker repayments and increase consumer trust in digital dunning strategies while simultaneously reducing instances of fraud.
This piece will examine why tech literacy is so important, the link between tech literacy and revenue, and will outline the best methods for educating your customers going forward.
COVID-19 has rapidly accelerated the use of digital technologies in all walks of life. However, not everybody understands how to use these technologies. You can’t expect consumers to seamlessly adopt digital technologies if they don’t understand how these technologies work. Therefore, it’s your responsibility to appropriately educate customers.
Ensuring tech literacy also carries with it a number of additional benefits.
Showing that you care about your consumers’ tech literacy will have a transformative impact on your brand image. Consumers will know you have their best interests at heart and that you’re not trying to pull the wool over their eyes. Indeed, an improved brand image will also lead to increased trust in your brand. 81% of consumers cite trust as a make-or-break factor when deciding whether to purchase from a company. Consumer trust equals increased revenue—it’s as simple as that.
Modern collections departments use a myriad of channels to interact with customers: SMS, emails, social media messages, etc. However, if your consumers don’t know how to open a link embedded within a text message, for example, then they won’t be able to repay what they owe.
By teaching your customers how different technologies work, you will ensure that they are armed with all the guidance they need to pay in full, on time, every time. In turn, this will have a profound impact on your revenue. You will spend less of your agents’ salaried time chasing past-due customers and your Days Sales Outstanding (DSO) will improve as a result.
Of course, your customers might know how to open a link but still generally distrust digital channels. This is especially common amongst hyper-vigilant, technologically adverse older consumers that are wary of leaving themselves vulnerable to fraud.
While it’s important to be on the lookout for fraud, it’s crucial that you educate consumers on what does and doesn’t appear fraudulent. This clarification will increase their trust in digital dunning strategies—meaning your customer service agents will spend less time reassuring customers that the messages they have received are genuine.
Consumers will therefore be far more likely to repay when they receive a digital outreach message. As a result, your cash flow will be more consistent than ever before, your DSO reduced to a minimum, and you will spend less money chasing up past-due customers. In other words, greater trust in digital dunning strategies leads to tangible improvements to your bottom line.
As mentioned above, companies can fall into legal issues if they’re believed to have misled their consumers. If you’re offering consumers a tech-based solution, it’s your responsibility to make them aware of the potential risks that this solution entails, the data that it collects, etc. By investing time and energy in improving your customers’ tech literacy, you’ll greatly reduce any instances of potential legal action further down the line.
And that’s not all. Lawsuits might be few and far between, but fraud is an ongoing threat to both your company and your customers themselves. In fact, global losses from payment fraud have tripled from 2011 to 2020—rising from $9.84bn to $32.39bn. Collections agencies must therefore teach their customers to identify common red flags that might indicate fraudulent activity. Just as importantly, they should be taught how to identify genuine outreach messages from your company.
Fraud and lawsuits can take a significant toll on a company’s profitability. By reducing these to a minimum, you will safeguard your company’s revenue going forward.
It’s one thing knowing the importance of tech literacy—but how can you effectively educate your customers on the digital skills they need? Below, we outline 4 great methods to help get you started.
Show your customers what fraud looks like by sharing real-life examples in customer advocacy emails. This should include a range of potential scams, such as phishing emails, spoofing emails, hijacked social profile scams, and online banking/PayPal scams. However, remember to also pull out the key factors they need to be aware of when assessing whether a message is or isn’t fraudulent.
For instance, this might be that:
Just like sharing examples of fraudulent messages, make sure to also include genuine examples from your company so that past-due customers know what to look for. If these messages differ in appearance, style, tone, and layout across digital channels, then make sure to send a variety of examples. This is especially important given that the tone and content of the message might depend on the individual customer themself.
By ensuring your customers recognise genuine dunning messages, they will be far more likely to pay up when you get in touch with them—this will significantly aid your company’s revenue.
Clearly outline what your past-due customers’ repayment options are and reiterate how they can get in touch with you. This means that they will be more easily able to identify fraudulent messages going forward. For instance, ones that ask customers to repay using payment methods you don’t currently offer, or that redirect customers to different customer service telephone numbers/email addresses/landing pages, etc.
Provide common must-know information for avoiding fraudulent scams. For instance, you might give your customers a checklist outlining potential ‘red’ and ‘green’ flags to be aware of.
Investing in improving your consumers’ tech literacy isn’t just a nice gesture. It can have a profound impact on your bottom line.
You will increase their trust in your brand and their knowledge of genuine digital dunning strategies, leading to regular, quicker repayments. You will also teach past-due customers how to spot fraud and greatly reduce the likelihood that your company will be faced with a hefty lawsuit.
So if you have not started already, it is time to begin educating your customers. But in order to begin, you first have to get up to speed with the latest trends in digital debt collection. Head to our comprehensive resources page and learn all there is to know about future-proofed collections strategies.
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