Lots of things to talk about out there. Inside ARM cover a piece on Debt Payment Practices in Europe. Once again it goes to show that “one size fits all” probably doesn’t work in Europe. It also brings home the need for good credit checking.
technorati tags: customer, interaction, voice, messaging, customer, contact
Paul Kedrosky (PK) posted a link to this study on credit card late payment penalties. The bottom line is that people who forget to pay their credit card bills on time, and become subject to the pain of late payment fees, initially change their behaviour, but over time forget the effects of that late payment fee at a rage of 10% per month!. If you have to pay a late payment fee this month you are not very likely to forget to pay your bill next month. BUT: in 10 months time you will be back to exactly the same behaviour pattern as you were exhibiting a before any fee was applied to you.
Late Fees Do Not Change Inherent Customer Behaviour, but they do adjust it in the short term. It might be a very useful experiment to pattern a series of Reminders to such late paying customers, in two or three month cycles to remind them that they paid a fee before, and to avoid doing so again they might want to take actions x, y, and z. With an interim messaging strategy it might be possible to stretch out the reinforcement effects of the original late fee, without damaging the customer relationship by applying another late payment fee, thus encouraging potential switching behaviour.
technorati tags: customer, interaction, voice, messaging, customer, contact
As reported in the Irish ElectricNews.net NTL have taken to charging customers a “handling fee” if they choose to not pay by direct debit. At a company level one understands that it costs more to bill those people that are not on direct debit, and it costs more to administer their accounts. The question I would have is what are the demographic or psychographic profiles of the customers that are not on direct debit? For instance, if I am a pensioner, with a post office account, and don’t use a bank account, will this look well on the Joe Duffy radio show!
“The paper also says that cable company NTL has defended its decision to impose a surcharge for late payments on customers and forcing them to use direct debit mandates. The company has been criticised by the chairwoman of the National Consumer Agency, Ann Fitzgerald, for deciding to charge customers an extra EUR2 per bill if they do not pay by direct debit. Customers who do not pay their bills on time will be charged an extra EUR7.68. A spokeswoman for UPC Broadband, the parent company of NTL and Chorus, said Chorus was already operating the late payment fee and it was being introduced to NTL to standardise both operations”.
technorati tags: customer, interaction, voice, messaging, customer, contact