Just as with tastes in music, television and what’s considered trendy, there are generational gaps and varied preferences for dealing with debt and methods for repayment.
While common interests of Baby Boomers, Generation Xers, Millennials and members of Generation Z may not overlap much, they all have one thing in common: debt.
The sources of that debt vary across generations — and so too do their preferred methods for repayment and the best ways to reach them to most ensure a successful collection process.
The generation of older adults ages 51-69, Baby Boomers have seen significant improvements in technology and changes in payment options over their lifetimes, but communicating with them through letters in the mail and home telephone calls are often the most successful options. These traditional means of communication still resonate the most strongly with Baby Boomers.
When it comes to paying off debt, Baby Boomers are the least likely generation to have adopted mobile digital payment methods, instead preferring to use debit cards closely tied to the cash in their bank accounts. Credit cards are also popular for this age group — and moreso than other generations, they’re likely to pay off their monthly balances.
Born between 1965 and 1979, Generation Xers have witnessed the explosion of modern technology as adults and have highly diverse communication preferences. While they’ve certainly welcomed mobile technology, Gen Xers can still have traditional tastes and a soft spot for direct mail. For the most part, however, they’ve embraced today’s technology and are the most prominent generation to view email as a preferred communication channel.
A multi-channel print and digital billing strategy will be most effective with Gen Xers. Despite the generation’s broad adoption of smartphone technology, mobile payments have not become as popular and repayment options including debit and credit cards are more likely to be utilized.
Millennials and Generation Z
The first generations to come of age with the immediacy of the internet and technology at their fingertips, Millennials and Generation Z can prove to be the most difficult for collectors to contact as the vast majority of them have given up or never had landline phones and don’t rely on physical mail or email as much as previous generations.
Due to a financial literacy gap, members of these younger generations may benefit from and be more responsive to collectors who act as financial counselors. Establishing an online portal as a hub for repayment, financial educational resources and direct contact with collection representatives, is more likely to get younger consumers engaged in their debt reduction. Allowing for recurring automatic payments with convenient mobile reminders and accepting payments through PayPal or other digital wallets also appeals to these tech-savvy, credit-card-averse consumers.
Regardless of the sources of your bad debt, our experts at Finance System, Inc. can tailor resources and collection strategies proven to be most effective across various generations. We understand the tendencies, preferences and repayment practices of each demographic, with communication means and user-friendly tech solutions to drive successful collection campaigns.
Let us help bring in the revenue you’ve earned and are entitled to. Contact our team today to learn more about our accounts receivable strategies and solutions.