Behavioral Economics

in Debt Collection
September 2014

TrueAccord
Agenda TrueAccord

• TrueAccord overview (3min)

• Behavioral Economics, and
its relevancy to collection (5min)
• Common customer types
and how to handle them (20min)
• Summary (2min)
About TrueAccord TrueAccord

Reinvent the way debt collection is done

•  Technology reduces friction

•  Adapts to the digital consumer’s
preferences
•  Data enables extreme personalization
•  Preserves customer relationships
•  Used by leading tech and lending companies
What Customers Are Saying TrueAccord

“[This] has to be the funniest bill collection I have ever had and it actually
made me want to pay.”

- Mike M.

“Nice Service, good payment plans.”

- Krystal V.

“Well, my company owes money, so we can’t exactly say “Rocks!”. But your
service is excellent and you have been very accommodating. Your website is
simply to navigate and you make it very easy to make payments.”

- Elliot F.

“You guys are doing it so well, that I would love to talk to you guys about my
other debts.”

- Tomas C.
What is Behavioral Economics? TrueAccord

Behavioral economics is a field that examines the

way individuals make economic decisions, and the
factors that influence those decisions.
•  Do we make rational decisions?
•  Can our decision process be manipulated?
•  What drives our decision-making?
Why Behavioral Economics in Collections? TrueAccord

•  Takes the voodoo out of agent driven

conversion
•  Broadens your toolset and improves
conversion
•  Cooperation improves retention and LTV
Common Customer Types TrueAccord

Many of your customers choose not to pay

for reasons unrelated to their personal
morality.

Our detection and classification of the following profiles are proprietary.

The Frustrated Customer TrueAccord

The frustrated customer has

had a negative experience
with your product.

•  Feels cheated by the fine

print
•  Struggles with a difficult
dispute process
•  Had a bad service
experience
The Frustrated Customer TrueAccord

Solution: Give them a stage and an outlet

for their frustration, then invoke reciprocity.

•  Allow them to vent

•  Leverage the debt dispute process
•  3rd party involvement helps reframe their
bad experience
The Price Sensitive Customer TrueAccord

The price sensitive customer

is looking to get the most
value for the lowest payment.

•  Often driven by some

dissatisfaction
•  Definitely not your best
customer
•  Thinks rationally about
value, but can pay
The Price Sensitive Customer TrueAccord

Solution: Create scarcity and a sense of

urgency.

•  Anchoring in settlement negotiations

•  Explicitly reducing discounts
The Defeated Customer TrueAccord

The defeated
customer has real
financial difficulties.

•  Often on the brink of

bankruptcy, owes
money to 4-5
creditors
•  Manages by
excuses
The Defeated Customer TrueAccord

Solution: Personify the obligation to create

a sense of commitment.

•  Use gender and age matching names

and photos of agents
•  Sports metaphors especially effective in
the US
•  Use a “coach” voice to drive to action
The Disengaged Customer TrueAccord

The disengaged
customer feels that
disregarding the
problem will make it go
away.

•  Often is young and

overwhelmed
•  Might be able to pay,
but doesn’t think it’s a
priority
The Disengaged Customer TrueAccord

Solution: appeal to their need of social

acceptance.

•  Discuss what others like them are doing

•  Emphasize the social status in being up
to date on commitments
•  Call them out as outliers
To summarize… TrueAccord

•  Behavioral economics allows better

segmentation and treatment
•  A scientific approach helps demystify
agent interaction
•  We looked at several types and
suggested responses based on
TrueAccord’s experience
 TrueAccord

THANK YOU
For more:

hello@trueaccord.com
http://www.trueaccord.com/resources