As Credit Connect itself reported, more than 14 million people in the UK are now categorised as having ‘low financial resilience’, with a further 27 million showing signs of financial vulnerability. These higher-than-usual figures are no doubt due to the pandemic and its fallout, and the pressure is mounting lenders and other financial organisations exercise digital empathy and a duty of care to their customers. Recently, the House of Lords Liaison Committee called on the UK government to introduce a new requirement for the Financial Conduct Authority (FCA) to establish a statutory duty of care that banks and other financial service providers must employ when dealing with customers. 

The introduction of the new ‘Breathing Space’ regulations is a huge step forward in ensuring protections for those who are most vulnerable. The regulations have presented businesses with a unique challenge; in terms of how their current payments and communication platform identify and segment vulnerable customers. It’s never been more important for businesses of all shapes and sizes to exercise a duty of care when dealing with customers, and it’s becoming increasingly apparent that technology and automation are to play a key role in this element of service in the coming years. 

Digital empathy and responsibility

Over the last year the pandemic has dramatically impacted the way we live, work, and interact – we have had to adapt to new ways of life in our homes and the workplace. The knock-on effect of managing the crisis has severely impacted the economy, the job market and in turn, personal finances. Many businesses had to move much of their operations into digital delivery. Now as the recovery begins, we look to the next stages of the digital evolution for businesses.

What do we mean by digital empathy?

Empathy is the ability to understand another person’s thoughts and feelings from their point of view. So, what constitutes digital empathy? Digital empathy is a communications approach that uses digital technology to understand and respond to people’s values and priorities. The approach builds on transparency and authenticity to win trust; leveraging shared content and experiences to fuel emotional connection. 

Organisations who can convey genuine human care across digital spaces – digital empathy – will be the ones who strengthen long term customer relationships and gain new ones. Organisations should be looking to tailor not only their collection processes but their entire communication strategies, catering to the vulnerable customer base allowing them to feel in control in times of unpredictability. Technology and the growing willingness to use digital channels for complex interactions has encouraged companies to build platforms offering a more personalised service to each customer. Brands that have been feeling more distanced from their customers than ever before can now tailor their communication to cultivate and maintain a bond of trust. 

Why it’s so important for businesses to develop it? 

Whether you’re a water company, high street retailer or a bank, by leading with an honest, human approach in communications you can connect with your customers, build trust, and develop meaningful interactions and conversations, even with the most sensitive of issues. According to the CCW, there are about  1.5 million people in ‘water poverty’ which it defines as having to spend more than 5% of their income after housing costs on water bills. The increase in customers who are now considered ‘vulnerable’ suggests that this is a time to feel heard not herded. Customers want to feel valued and listened to and so organisations should look to humanise their communications to truly connect and understand the needs of the customer.

However, implementing an empathetic approach to an organisation’s communication strategy goes far beyond any boardroom meeting conversation. It’s about understanding what your customers really need and giving it to them before it gets too late. 

So, how can you ensure you get the message across while building trust and ensuring a meaningful conversation happens?

5 key components:

1. Listen to your customer

Customer feedback is vital for learning the pain points of your organisation. Whether it’s negative or positive, feedback is essential for the growth of an organisation. People like to feel heard, making your customers aware that their feedback has been taken on board and actioned will not only build their trust but also grow your data and understanding around the service you provide.

2. Your audience 

Looking into your customer data and mapping out the various circumstances a customer may find themselves and at what stage will bring to light a variety of scenarios and therefore create a solid foundation to build journeys from. When organisations understand the landscape, they can avoid blind spots and proactively empathise with customers building organisational resilience. 

3. Timing

Understanding where a customer sits in their debt challenge is a fundamental piece of data which can serve as a trigger for your communication. These can be flags such as “previously missed a payment” or “increased credit card usage” etc. Having customer profiles created as part of your segmentation you can then look to see which type of flags are available – this can then lead to pro-active communications as opposed to relying on reactive campaigns post event.

For example, if you have data available which gives you visibility of a customer who could be in a vulnerable situation – now is the time to communicate, prior to missed payments or the customer being unresponsive further down the line. With 66% of consumers waiting over a year to do something about their debts (PayPlan), the sooner your business can offer help the greater the uptake and positive resolutions there will be.

4. Channel

The channel you choose to send your business communication from is as important as the message itself. Digital communications such as email and SMS bring a wealth of efficiency benefits such as ease, speed, and customisation. However, it’s important to look at a channel’s suitability for the customer themselves, for example, if you know a customer has sight problems or perhaps a digital challenge an email may be a poor choice compared to a voice message or letter in braille or large print.

5. Tone and message

The message and tone you sent out to your customer sets the precedent on how your business will be perceived. To help build trust, it’s critical that when dealing with sensitive subjects the tone of message is caring, thoughtful and human. The Government says it will legislate to change the language in debt letters, as well as the way information is presented (Money Saving Expert), changes such as no longer utilising capital letters and to use plain English in communication to customers.

What’s next?

Organisations should look to deepen relationships by finding digital ways to build trust and demonstrate that they understand both their customers’ needs and the challenges they face. With an omnichannel strategy, you create a strong customer experience via different channels. So that the communication style remains consistent throughout. This consistency will help build trust between the business and your customer. 

The expectation for organisations to show empathy across multiple points of engagement is growing rapidly. Those that ignore digital empathy are more likely to operate on false assumptions and alienate vulnerable customers. Those that implement digital empathy into their approach are more likely to create emotional connections with the people they serve.

“The effect of the pandemic has exacerbated vulnerability risk factors and has intensified the struggle for those already in challenging circumstances. The demand for more accessible and flexible communications from companies is growing – along with the importance of ensuring these are delivered sensitively. Trust is essential to successfully supporting and helping customers in these circumstances and understanding the key elements to producing effective contact strategies.”

James Donohue, Head of Client Engagement at Revive Management

*James will be Chairing the Connected News discussion examining the delivery of responsible vulnerable communications. Join James on Thursday 17th ly at 10am

Click here to sign up for this FREE event and tune in to hear James Donohue’s views at the virtual event.

 

 

 

Revive Management specialise in streamlining business-to-customer communication and payment collection solutions securely and efficiently.