Supporting customers on their financial journey during uncertain times
The COVID-19 pandemic has created unprecedented financial uncertainty for millions of people. Job losses, reduced hours, business closures, and unexpected expenses have disrupted financial stability for individuals and families across all demographics. For businesses, this creates both a challenge and an opportunity: how to support customers through difficult times while maintaining healthy operations.
Understanding the new reality
The financial impact of the pandemic is both widespread and uneven. While some industries and individuals have weathered the storm relatively well, others face severe hardship. This creates a complex landscape for businesses trying to manage customer relationships and payment obligations.
Traditional approaches to customer engagement and collections, which often assume that payment challenges reflect unwillingness rather than inability to pay, are particularly ill-suited for this environment. What's needed is a more nuanced, empathetic approach that recognizes the diverse circumstances customers face.
The importance of early engagement
Waiting until accounts become severely delinquent before taking action serves no one well. By that point, customers are often stressed, defensive, and less able to resolve their obligations. Early, supportive engagement creates better outcomes:
- Reduces stress: Proactive outreach before accounts become seriously delinquent shows customers you're there to help, not punish
- Provides options: Early engagement creates more flexibility to work out payment arrangements that customers can actually meet
- Preserves relationships: Customers who feel supported during challenging times remain loyal when circumstances improve
- Improves outcomes: Early intervention leads to higher resolution rates and lower charge-offs
Personalization at scale
Every customer's situation is unique, requiring personalized approaches to engagement and support. Technology, particularly AI and behavioral science, makes it possible to deliver this personalization at scale:
Understanding individual circumstances
Data analysis can identify patterns that indicate whether a customer is experiencing temporary cash flow challenges, longer-term financial hardship, or other specific circumstances requiring different approaches.
Tailored communication
Messaging that reflects understanding of individual situations performs significantly better than generic outreach. This includes adjusting tone, timing, channel, and content based on customer preferences and circumstances.
Customized solutions
Rather than offering one-size-fits-all payment plans, businesses can use data to suggest arrangements that align with each customer's specific situation and ability to pay.
Flexibility as a strategic advantage
Flexibility in payment terms, due dates, and arrangements isn't just compassionate—it's strategically smart. Customers facing genuine hardship need options that work with their current reality, not rigid requirements that set them up for failure.
Effective flexibility includes:
- Payment plans with appropriate term lengths and payment amounts
- Ability to adjust due dates to align with when customers receive income
- Temporary payment reductions or deferrals for those experiencing acute hardship
- Easy processes for requesting and modifying arrangements
- Clear communication about options and how to access them
Building trust through transparency
During uncertain times, clear communication becomes even more critical. Customers need to understand:
- What options are available to them
- How to access help and support
- What consequences they face if they can't meet obligations
- That you're committed to working with them to find solutions
Transparency builds trust, and trust is the foundation of successful customer relationships during challenging times.
The role of behavioral science
Understanding human behavior is crucial to effective engagement during times of stress. Behavioral science provides insights into how people make decisions under pressure and how to design interventions that work with human psychology:
Reducing cognitive load
Financial stress reduces people's ability to process complex information and make decisions. Simplifying communication and choices makes it easier for customers to take action.
Addressing psychological barriers
Shame, anxiety, and avoidance are common responses to financial challenges. Engagement strategies that acknowledge these emotions and provide judgment-free pathways forward are more effective.
Leveraging commitment devices
People are more likely to follow through on commitments they've actively made. Engagement that helps customers set their own goals and plans increases success rates.
Technology as an enabler
Delivering personalized, empathetic engagement at scale requires sophisticated technology:
- AI and machine learning: Analyze vast amounts of data to predict behavior and recommend optimal interventions
- Omnichannel platforms: Engage customers through their preferred channels—email, SMS, voice, web, or mobile
- Automation: Handle routine interactions efficiently while flagging complex cases for human intervention
- Analytics: Continuously measure and optimize engagement strategies
Measuring success differently
During uncertain times, success metrics should evolve beyond simple collections rates. Consider measuring:
- Customer engagement and response rates
- Voluntary resolution versus forced actions
- Customer retention and lifetime value
- Brand perception and sentiment
- Long-term portfolio performance
These metrics provide a more complete picture of how your engagement strategy affects both customers and business outcomes.
Looking ahead
While we hope that the acute uncertainty of the pandemic will eventually pass, the lessons learned during this period will remain relevant. Customer expectations have shifted—they now expect businesses to treat them with understanding and flexibility during challenging times.
Companies that embrace empathetic, personalized engagement won't just weather the current crisis better—they'll build stronger, more resilient customer relationships that drive long-term success. The future of customer engagement is human-centered, data-driven, and focused on creating mutual value even during difficult moments.
Supporting customers on their financial journey during uncertain times isn't just the right thing to do—it's smart business that creates better outcomes for everyone.
