ACCOUNTS RECEIVABLE | 10 MIN READ
The Real Reason Virtual Negotiation Works
Written by Michael Wise
Live Negotiations Aren’t Comfortable
Not surprisingly, many consumers today are picking dealerships that offer no-haggle “online” pricing or let search engines find the lowest prices for them. Essentially, consumers want to feel in control—something they don’t feel when dealing with a person who negotiates for a living.
In much the same way, the process of negotiating a debt settlement carries a lot of the same emotional baggage. If consumer perception towards used car salesman has led to the creation of an entirely new self-help marketplace, why wouldn’t those same behavioral instincts apply to debt settlement? In fact, a good case could be made that consumers would prefer to speak to a collections agent even less than a slick car salesperson.
“I don’t think there’s any doubt,” says Jeff Mains, CEO of Intelligent Contacts. “When it comes to negotiating a debt, people would much rather handle it without having to deal with an actual person.”
The Science Behind Consumers Moving Toward Virtual Negotiation
Another interesting difference between live and virtual negotiation involves human emotion. Consumers and agents are more likely to escalate conversations over the phone due to something called Social Presence Theory. This theory states that in face-to-face meetings we see others as social beings with personalities and feelings, however, over the phone, we treat others more like objects which “can be ignored, insulted, or exploited.” (Short, Williams, & Christie, 1976, p. 972)
Virtual Negotiation Doesn’t Replace People, It Just Makes Them More Productive
In addition to being a preferred method of interaction, virtual negotiation saves a lot of time. Since the majority of debt accounts are relatively small, time spent negotiating a settlement, determining terms and methods of payment, are better handled pro grammatically. This allows agents to focus on larger, more complicated accounts. The result is higher collection ratios.
The statistics clearly back this up:
- 56% of Negotiator logins result in a payment
- Negotiator collects on average 13% more balance owed than live agents
The Creation of the Intelligent Negotiator Decision Engine
“Intelligent Negotiator provides every possible payment outcome based upon our client’s collection parameters,” adds Mains. “It doesn’t sleep, it never calls in sick, and it never has a bad day. It just collects 24/7.”
The Compliance Impact of Virtual Negotiation
Since Intelligent Negotiator is software, it can strictly follow the language, steps, procedures, and proper responses lined out by the CFPB. In fact, the software is designed to provide said documentation to the debtors. This makes any audit from CFPB easily defended and quickly resolved.
Will virtual negotiation soon completely replace the live collections agent? Probably not. Will it outperform live agents on a per transaction basis? It already is.Contact us to learn more about our Intelligent Negotiator solution, it will help collect payments faster and will always be compliant!
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