TrueAccord notes that even with wage gains over the last several years, 40% of consumers say they “earn insufficient incomes and struggle to keep up with inflation and interest rates.”
TrueAccord pointed out in a blog post that “with approximately 75% of low-income households reporting living paycheck-to-paycheck, to bridge the gap there is an increasing reliance on credit cards to cover bills, so it is not surprising these consumers are falling behind on their credit card payments.”
According to insights shared by TrueAccord, the spending divide leads “to a divide on what consumers are going into delinquency for—so what’s the best way to engage and secure repayment when consumers’ financial situations and outlooks are so split?”
Regardless of where your customers fall in the divide, TrueAccord explained that businesses must “face facts: overall delinquent balances increased by 3.46% in June 2024 and then again in July by 0.51%.”
TrueAccord further noted that this paired “with the fact that 1.11% of consumer accounts rolled into higher stages of delinquency marks an uptick in the roll rate in June compared to the improvement (decreases) seen in the past several months.”
But with delinquency rates continuing to rise, TrueAccord said that it’s important “to tailor your recovery approach to each consumer you seek to collect from with customized, omnichannel engagement.”
According to TrueAccord’s blog post, a successful collections strategy “goes beyond the simplified “tale of two consumers” and actually engages with individuals uniquely with the right message delivered through the right channel at the right time for them.”
While getting payment reminders is beneficial “for consumers across the divide, hovering between roughly 40% to 50% from the under $50,000 cohort all the way to the $100,000 and above bracket,” the preference for how these reminders are sent varies across all consumers:
- 36% prefer text
- 32% prefer email
- 4% prefer a paper letter mailed
- 1% prefer receiving a phone call
But for most businesses, executing “an advanced outreach strategy can be a major undertaking, especially for those used to relying on traditional call-and-collect methods.”
Partnering with TrueAccord can alleviate “the potential strain on resources and simultaneously help you collect more faster.”
TrueAccord not only engages your delinquent customers “through this proven effective omnichannel approach, but also leverages our patented machine learning engine, HeartBeat, to effectively reach out to every account placed with a goal of getting them to repay on their own terms when they are ready.”
HeartBeat dynamically optimizes the next best touchpoint “for every consumer in real-time, including the content, timing, and channel for each customer.”
No matter where your customers fall in the consumer spending divide, TrueAccord has “the right message, right channel, and right timing to recover more across the board.”