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Are You Still Using an IVR Menu for Debt Collections?

What is an IVR System for Debt Collections?

IVR stands for “Interactive Voice Response,” and it’s a legacy technology that enables companies to automate both inbound and outbound calls by using a pre-recorded voice that interacts with consumers and guides them through a pre-set menu, which can be navigated by inputting DTMF (dual-tone multi-frequency) from the phone keyboard.

Virtually everyone has interacted with an IVR system at some point. Whether you’ve called a business, a bank, a pharmacy, a doctor’s office, or a phone service provider, you are certainly familiar with prompts like: “For hours of operations, press 1.”

Call automation for call centers and businesses is not a new concept. IVR became popular in the 1980s when it emerged as an essential customer service technology. Debt collection agencies have been using IVR for over a decade, for both outbound calls (such as payment reminders) and inbound calls (such as consumer inquiries).

However, the fact that IVR is so common does not mean that it’s an optimal solution. In this blog post, we’ll go over the limitations of IVR and explain why adopting a conversational Voice AI solution is a far better option for collection agencies.

Why IVR Is Overwhelmingly Unpopular

IVR reduces wait time for consumers, but it does not eliminate it, as it forces users to listen to lengthy menus that are for the most part irrelevant. At least 61% of consumers think that IVR systems make for a poor customer experience (CX).

A survey conducted by Vonage with Opinion Matters in 2019 revealed that having to listen to seemingly endless, irrelevant menu options is the primary factor that contributes to the consumers’ negative experience. Additionally, the respondents complained that IVR menus are usually too long, that the reason for their call is sometimes not even listed, and the system prevents them from speaking directly to a live customer representative.

Building the right IVR for your company can be tricky. When the system is not designed well, users will get frustrated and abandon the call. IVR is notoriously difficult to navigate, especially when a business offers different services or targets various sets of consumers.

In one sentence: consumers don’t like IVR. So what’s the alternative?

Voice AI Is the Best Alternative to IVR

Conversational Voice AI is the cutting-edge technology behind what is commonly referred to as a “voicebot.” It enables companies to automate both inbound and outbound calls with customers without the involvement of a human being. In recent years, SaaS platforms offering Voice AI solutions have become more affordable and easier to deploy.

In the ARM industry, Voice AI can transform the operations of collection agencies for the better; these solutions are infinitely scalable and can handle the vast majority of calls with consumers. The AI can handle the most repetitive and mundane calls, empowering live agents to focus on the most important and revenue-generating calls.

Skit.ai’s solution can handle intelligent, personalized, and effective conversations with consumers, eliminating wait times and significantly cutting costs for the company adopting it. The AI is aware of the context and will tailor the service it offers based on the specific needs of the user. The technology not only understands what the user says but also the semantics of the conversation.

Voice AI for Outbound Collection Calls

Collectors are usually expected to go through thousands of files per month; a large number of those files remain untouched since it’s impossible for a human collector to contact and speak with so many consumers. This process leads to substantial losses in potential revenue for the agency.

When fed with large quantities of files, a Voice AI platform can initiate and handle an extraordinarily high number of calls. These are some of the solution’s capabilities:

The solution can easily transfer the more complex calls to a live agent when it cannot reach a satisfactory resolution. When agents see that a call is being transferred from the Voice AI, they know the customer is usually inclined to make a payment or reach a settlement.

Why You Should Not Use IVR for Outbound Collection Calls

Using IVR for debt collection calls is limiting and is unlikely to lead to a successful debt recovery on a consistent basis. The system can’t capture meaningful dispositions and is capable of handling a limited number of actions. Let’s say the consumer refuses to pay or disputes the debt—can your IVR capture the reason? Let’s say the consumer is willing to pay but can only pay off part of the debt at this time; can your IVR handle a negotiation? If the consumer is busy right now, is your IVR able to capture call-back dates and times? Probably not.

Voice AI for Inbound Queries

When a customer calls the collection agency, rather than having to deal with an annoying IVR menu, they get to interact with the Voice AI solution.

The AI picks up the call right away, eliminating the wait time of a regular call; additionally, the user does not have to patiently listen to a long list of options. The AI typically authenticates the caller’s identity and, if relevant, informs them of their due balance. Here the customer gets to have an intelligent, effective, multi-turn conversation with the Voice AI solution.

In revenue-generating inbound calls, the Voice AI can easily help the customer make a payment. In non-revenue-generating inbound calls, the solution will answer the customer’s questions based on the information it has on file, and will transfer the call to an agent when needed.

Why You Should Not Use IVR for Inbound Queries

Whenever a consumer is interested in making a payment and resolving their debt, they might be turned off by the poor customer experience offered by the IVR. In non-revenue generating inbound calls, the IVR system is often incapable of resolving the query, and therefore will likely transfer the call to a live agent.

U.S. debt collection agencies report that their agents spend about 20% of their time answering inbound calls! Many of these calls are not revenue-generating, so they consume time and resources that could be easily allocated to collection calls.

The Benefits of Adopting Voice AI for Debt Collection Agencies

Here are some of the benefits reported by collections agencies that have adopted Skit.ai’s Voice AI platform:

Interested in learning more about how Conversational AI can help you streamline your collection strategy and reach your full potential? Schedule a call with one of our experts using the chat tool below!