COVID-19 was a perfect self-service storm. Suddenly, brick-and-mortar locations (such as physical banking branches) were either closed indefinitely or open, albeit representing a potential threat to consumers’ safety. Indeed, a reported 82% of consumers stated at the beginning of the pandemic that they felt uncomfortable with the thought of going into their local banking branch.
This was compounded by enforced layoffs in call centres. As a result, online, self-service channels suddenly rose in popularity, with 63% of customers feeling more inclined to try a digital app now than before the pandemic.
This represents both an opportunity and a challenge for financial institutions. On the one hand, self-service interactions represent potential cost-savings, with an individual interaction costing less than $0.10 (compared to $12 for a phone or email interaction). But there’s still plenty of work to do—over 25% of all consumers walk away from a self-service interaction feeling ‘dissatisfied’ or ‘very dissatisfied’.
Throughout this piece, we’ll examine the benefits of self-service functionality to both consumers and employees alike, why it’s more important than ever before in the wake of COVID-19, and how self-service enterprise software brings value to your collections management operations.
What is self-service?
Self-service functionality empowers customers to solve issues themselves through dedicated software or platforms. Employees aren’t needed at any step of the process. Instead, customers can repay outstanding debts, sign up for a new plan, or manage their account all by themselves.
Self-service is all around us. Consider Netflix, for example. Have you—or anyone you know—ever interacted with a Netflix employee? The likelihood is that you haven’t. Anyone wanting to sign up can go through the process all by themselves, without having to consult a Netflix employee at any stage.
Netflix is far from the only company putting self-service functionality at the heart of its operations. Companies like Transferwise, PayPal, and Canva all operate under this same model. That’s not to say that you can’t ever speak to a representative—only, they design the in-platform customer experience so that you never need to speak to one of their employees.
What are the benefits of self-service functionality?
Done well, and self-service offers a wide range of both internal and external benefits. Let’s examine a few of these in more detail.
- Internal: for employees
First and foremost, self-service functionality frees customer-facing employees from endless hand-holding. Customers can be directed towards self-service portals that guide them through the process of solving their issues themselves. This means that the customer support department will simultaneously become more productive, yet will require less manual effort from its employees.
Thanks to this increased productivity, no longer will call agents have to spend all day, every day on the phone with puzzled customers. Instead, they can focus on more strategic work—such as revamping the customer journey map to improve the customer experience even further. Not only does this improve the customer experience, but it will also drastically improve employee satisfaction, too. This is key to long-term employee retention. According to McKinsey, engaged call centre employees are 4 times more likely to stay than dissatisfied colleagues.
What’s more, the introduction of self-service functionality will also drive the development of a data-driven culture within your organisation. Customer-facing employees will now focus on key metrics to highlight areas for improvement moving forward. For example, why are so many customers visiting your repayment landing page but so few repayments are actually coming through? How can this portal be further improved? By leveraging self-service solutions, employees are allowed to take care of other urgent projects and bring more value to your business.
- External: for customers
Gartner states that nearly 89% of companies are competing based on customer experience, with self-service functionality playing a key role in this. Indeed, 79% of consumers now expect organisations to provide at least some level of self-service functionality.
So why has it become so popular?
Self-service functionality improves customer satisfaction, giving customers control over managing their own affairs. Instead of having to wait indefinitely in a call queue, users can simply log into their account on any device, from wherever they want, at a time that suits them, and solve their issues themselves.
This by and large leads to quicker resolution time—which unsurprisingly also improves the customer experience. Companies that offer self-service functionality meet consumers where they are, instead of where they’d like them to be. Think about it: have you ever enjoyed the process of calling up a call centre, waiting to speak to an agent, and then finally resolving your issue over the phone? Conversely, how do you feel about the process of handling issues yourself via self-service portals?
Interestingly, Gartner suggests that customer satisfaction may not even be the most important metric to focus on. Instead, they’ve suggested that “customer effort”—the ease with which a customer solves a particular problem—is 40% more accurate at predicting customer loyalty than customer satisfaction on its own.
Self-service reduces customer effort down to the bare minimum, which in turn, will make customers more loyal to your brand in the future.
Why self-service is especially important right now
With the economic fallout of COVID-19 laid bare for all to see, there’s understandably widespread anxiety surrounding people’s personal finances. Whether consumers want to plan for the future or seek financial aid, it has never been more important for people to access quick and simple financial support.
However, many physical branches have closed their doors over the past year—either temporarily or for good. This means that customers are either forced to wait for hours on end to speak to increasingly busy call centre agents, or instead, they can simply serve themselves. Unsurprisingly, the latter is generally deemed to be more appealing, especially amongst the younger generations.
Self-service in collections
According to McKinsey, the benefits of self-service functionality are especially prominent in collections: “Online banking and virtual collections agents could increase payments and reduce costs for call centers, while improving customer satisfaction. Most customers prefer to engage through an impersonal channel: if alerted by email and text, they can then take action by themselves.”
Thanks to self-service functionality, past-due customers can take control over their own repayment process. This sense of empowerment goes a long way to building long-lasting customer relationships. What’s more, it allows collections departments/agencies to avoid ‘reactance’, where consumers actively choose to not repay their debts after feeling like their own sense of agency has been violated.
Self-service functionality allows your employees to be more productive, reduces the cost per interaction, increases your customer satisfaction, and skyrockets your collections department’s ROI. If you’re not leveraging self-service functionality, you’re unnecessarily pouring money down the drain.
The self-service mandate
Self-service functionality is no longer a nice-to-have. If you want to make life easier for both your employees and your customers, reduce the time, effort, and cost of recouping what you’re owed, and build long-term customer loyalty, then self-service functionality is a must.
This trend has been accelerated by COVID-19. In a post-COVID world, the companies that support their consumers by empowering them to solve problems on their own will reap the rewards for years to come.
To find out more about how receeve enables collections departments to craft tailored self-service portals that appeal to each individual past-due customer, check out this page.
Jan is one of the first members of the receeve team, and has become an expert on the fintech industry, particularly digitising collections and accounts receivable processes. He is a talented multi-disciplinary professional with immense drive to bring modern technologies and processes into financial services.