The debt collection industry collected 6 billion euros in Germany in 2020, which roughly amounted to 0.2% of the country’s GDP. As a result, the performance of debt collection agencies is critical for the stability of vast parts of the economy. Yet, a systematic understanding of debtors’ personalities and the most successful way to approach them is still lacking. The aim of the present study is twofold: First, based on debt collection agency (PAIR Finance) data, we established a novel debtor typology framework that extends previous research by including 4 behavioral dimensions. Second, we investigated how the success of communication strategies differs depending on a debtor’s typology. Typology scores were generated based on 72 features. Outbound communication strategies varied in the way they were phrased (tonality) and the time of day when they were sent out (timing). Our results show that debtors’ typologies can be identified based on 4 dimensions: Willingness to pay, ability to pay, financial organization, and rational behavior. Using these dimensions, debtors could be classified into 16 different typologies. We identified 5 main typologies, which account for 63% of the debtors in our data set. Further, we observed that each debtor typology reacted differently to the content and timing of reminder messages, allowing us to define an optimal debt collection strategy for each typology. For example, sending a reciprocity message at 8 p.m. in the evening is the most successful strategy to observe a reaction from a debtor who is willing to pay their debt, able to pay their debt, chaotic in terms of their financial organization, and emotional when communicating and handling their finances. In sum, our findings suggest that each debtor type should be approached in a personalized way using different tonalities and timing schedules.
| Published in | Psychology and Behavioral Sciences (Volume 10, Issue 6) |
| DOI | 10.11648/j.pbs.20211006.20 |
| Page(s) | 256-268 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Debt Collection, Financial Decision-making, Typology, Nudging, Payment
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APA Style
Minou Ghaffari, Maxime Kaniewicz, Stephan Stricker. (2021). Personalized Communication Strategies: Towards a New Debtor Typology Framework. Psychology and Behavioral Sciences, 10(6), 256-268. https://doi.org/10.11648/j.pbs.20211006.20
ACS Style
Minou Ghaffari; Maxime Kaniewicz; Stephan Stricker. Personalized Communication Strategies: Towards a New Debtor Typology Framework. Psychol. Behav. Sci. 2021, 10(6), 256-268. doi: 10.11648/j.pbs.20211006.20
AMA Style
Minou Ghaffari, Maxime Kaniewicz, Stephan Stricker. Personalized Communication Strategies: Towards a New Debtor Typology Framework. Psychol Behav Sci. 2021;10(6):256-268. doi: 10.11648/j.pbs.20211006.20
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Download@article{10.11648/j.pbs.20211006.20,
author = {Minou Ghaffari and Maxime Kaniewicz and Stephan Stricker},
title = {Personalized Communication Strategies: Towards a New Debtor Typology Framework},
journal = {Psychology and Behavioral Sciences},
volume = {10},
number = {6},
pages = {256-268},
doi = {10.11648/j.pbs.20211006.20},
url = {https://doi.org/10.11648/j.pbs.20211006.20},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.pbs.20211006.20},
abstract = {The debt collection industry collected 6 billion euros in Germany in 2020, which roughly amounted to 0.2% of the country’s GDP. As a result, the performance of debt collection agencies is critical for the stability of vast parts of the economy. Yet, a systematic understanding of debtors’ personalities and the most successful way to approach them is still lacking. The aim of the present study is twofold: First, based on debt collection agency (PAIR Finance) data, we established a novel debtor typology framework that extends previous research by including 4 behavioral dimensions. Second, we investigated how the success of communication strategies differs depending on a debtor’s typology. Typology scores were generated based on 72 features. Outbound communication strategies varied in the way they were phrased (tonality) and the time of day when they were sent out (timing). Our results show that debtors’ typologies can be identified based on 4 dimensions: Willingness to pay, ability to pay, financial organization, and rational behavior. Using these dimensions, debtors could be classified into 16 different typologies. We identified 5 main typologies, which account for 63% of the debtors in our data set. Further, we observed that each debtor typology reacted differently to the content and timing of reminder messages, allowing us to define an optimal debt collection strategy for each typology. For example, sending a reciprocity message at 8 p.m. in the evening is the most successful strategy to observe a reaction from a debtor who is willing to pay their debt, able to pay their debt, chaotic in terms of their financial organization, and emotional when communicating and handling their finances. In sum, our findings suggest that each debtor type should be approached in a personalized way using different tonalities and timing schedules.},
year = {2021}
}
TY - JOUR T1 - Personalized Communication Strategies: Towards a New Debtor Typology Framework AU - Minou Ghaffari AU - Maxime Kaniewicz AU - Stephan Stricker Y1 - 2021/12/24 PY - 2021 N1 - https://doi.org/10.11648/j.pbs.20211006.20 DO - 10.11648/j.pbs.20211006.20 T2 - Psychology and Behavioral Sciences JF - Psychology and Behavioral Sciences JO - Psychology and Behavioral Sciences SP - 256 EP - 268 PB - Science Publishing Group SN - 2328-7845 UR - https://doi.org/10.11648/j.pbs.20211006.20 AB - The debt collection industry collected 6 billion euros in Germany in 2020, which roughly amounted to 0.2% of the country’s GDP. As a result, the performance of debt collection agencies is critical for the stability of vast parts of the economy. Yet, a systematic understanding of debtors’ personalities and the most successful way to approach them is still lacking. The aim of the present study is twofold: First, based on debt collection agency (PAIR Finance) data, we established a novel debtor typology framework that extends previous research by including 4 behavioral dimensions. Second, we investigated how the success of communication strategies differs depending on a debtor’s typology. Typology scores were generated based on 72 features. Outbound communication strategies varied in the way they were phrased (tonality) and the time of day when they were sent out (timing). Our results show that debtors’ typologies can be identified based on 4 dimensions: Willingness to pay, ability to pay, financial organization, and rational behavior. Using these dimensions, debtors could be classified into 16 different typologies. We identified 5 main typologies, which account for 63% of the debtors in our data set. Further, we observed that each debtor typology reacted differently to the content and timing of reminder messages, allowing us to define an optimal debt collection strategy for each typology. For example, sending a reciprocity message at 8 p.m. in the evening is the most successful strategy to observe a reaction from a debtor who is willing to pay their debt, able to pay their debt, chaotic in terms of their financial organization, and emotional when communicating and handling their finances. In sum, our findings suggest that each debtor type should be approached in a personalized way using different tonalities and timing schedules. VL - 10 IS - 6 ER -
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