Recovering debts and – at the same time – preserving the customer relationship: this is, in a nutshell, the meaning and objectives of so-called “soft collection.”

It’s easy to say but far more complicated to do. And those who have practical and direct experience with these procedures know this very well. So what is the urgency? To simplify these processes. And simplification, today, means digitization.

But let’s take it one step further: where does digitization start? From data. And what is its end point? Individuals.

This is the path that soft collection processes must also follow today. This is a path that we will focus on in this post. First, however, let’s overview the topic of debt collection: what are the contours and dimensions of the phenomenon? And, on the complementary side: how important is it to be able to maintain a lasting and fruitful relationship with one’s clients?

Let’s start with this twofold question, which we address in the next section.


New call-to-action


Debt collection: the dimensions of the problem 

It’s not easy to offer a comprehensive and up-to-date snapshot of the topic of debt collection and outstanding debts to be resolved. Especially if the perspective from where to start is the broadest possible one, involving all sectors of the economy.

But some reliable indicators, for the Italian ecosystem, are there. The most important and significant ones can be found in UNIREC’s 12th Report on Credit Protection Services published in May 2022 and presented during the last Digital Conference.

Let us, therefore, extract some interesting data:

  • In 2021 alone, UNIREC member companies handled about 40.1 million Third Party practices. Compared to 2020, the increase was more than 9%.
  • Receivables entrusted for recovery to UNIREC member firms also increased in 2021 compared to the previous year (+5.2%), reaching an absolute size of just under €106 billion.
  • The average calculated performance between amounts recovered and entrusted in the year 2021 is stable at 11%.
  • In 2021, the average ticket of receivables entrusted for recovery stands at €2,643, which is slightly lower than in the previous year (-3% compared to €2,735 in 2020).

Of course, this general snapshot does not account for even important differences between different industries or between different geographical areas, for example. Despite this, however, the overall impression is very clear.

We’re talking about a truly enormous amount of credit, one that is difficult to recover, and which, moreover, has been increasing at an accelerated and dangerous pace in recent years.

There are many factors behind this trend: the aftermath of the emergency period triggered by the Covid-19 pandemic and the instability of the current situation in the markets and international politics, first and foremost. This is certainly not the place to dissect all these factors in depth.

But when it comes to soft collection, it’s imperative to consider a delicate and complementary side: that of retaining your customers.Here the issues are even sharper and more eloquent.

To demonstrate them, we only need to report this other data, which emerged from a well-known research conducted by Bain & Company (

  • For a company, winning a new customer costs 6 to 7 times more than retaining one.
  • A 5% improvement in Customer Retention can produce up to 25% more profit.

Finally, we would like to report another figure, again taken from the UNIREC report, but insisting on a more specific aspect (related to the financial sector):

  • The recovery rate for debts overdue for less than 1 year is 53%, while it jumps to 23% for those between 1 and 3 years and reaches 13% for those of more than 3 years.

What does this last figure tell us? It tells us about the importance of the time factor in soft collection.

  • Digitization, with the exponential improvement it produces in terms of efficiency, acts precisely on the timing of recovery, shortening it dramatically. Not only that: data-driven analytics even leads to anticipating the possible default, in a predictive manner, thus allowing the problem to be prevented rather than cured.

It’s precisely the power of data that we will focus on in the next section.


The power of data and its role in soft collection

Here we come to a decisive step in this post. We have seen how the problem of insolvencies is very important and constantly increasing. And we anticipated that the best answers may come from digital, thus from data analytics. But in what way? And why? To answer these decisive questions, we have to understand the meaning of Big Data, and their function.

“Big Data is “high-volume, high-velocity and/or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation.”

This is the technical definition by Gartner. To get to a more practical, everyday field, Big Data represents the digital traces that we all scatter online. Traces from which it is possible to reconstruct our characteristics, our habits, our preferences, our browsing choices, our behaviors.

Let’s translate this into business relationships: With big data, today’s companies can have a very in-depth, highly granular overview of their audiences.

Let’s look at some of the types of data that can be collected:

  • Demographic Data: everything related to age, gender, marital status, employment, and income status.
  • Psychographic Data: behaviors, beliefs, values, interests, and lifestyles of people that can be inferred from their online data.
  • Geographic Data: information about geolocation.
  • Behavioral Data: data based on users’ web surfing behaviors, extracted from cookies.
  • Contextual Data: a very broad field that concerns the context, the environment surrounding a user or customer; from news, sentiment, market fluctuations, weather, geopolitics…just to name a few possible metrics.
  • First Party Data: the data that a company collects directly from its users and customers, such as through CRM (Customer Relationship Management) and CCM systems.

And it is in this last point that a crucial issue emerges.

Digitizing your CRM systems to the fullest through First Party Data is the starting point for improving soft collection.

And it is here that we are ready to answer the two questions with which we opened the paragraph. In what way? For what reason? It’s about keeping track of your customers’ data so you can better know their habits. From this knowledge, you can operate in two ways:

  • Design targeted and tailored communications, in all Customer Service processes and even more so in soft collection processes. Cold and distant communications can be unsympathetic, excessively rancorous, and ultimately counterproductive.
  • Try to anticipate defaults, through predictive analytics systems based on data collection, and to try to prevent them by closely guarding slippery touch points with tailored communications.

All this, moreover, in a perfectly automated manner. Without the need to invest time, money, and personnel in time-consuming and often annoying manual operations. Finally, it remains pointing toward the final frontier of the data revolution: personalization

Personalization: the main ally in credit management

Turn data analysis into closer communication with customers. This is the secret to improving soft collection…and, more, to predicting and preventing defaults.

In this sense, the latest frontier is personalization. In concrete terms: it involves starting with the data collected in your CRM systems. First-party data concerning individual customers (but which can be cross-referenced with other types of information).

And based on this information, restructure and update all their lines of communication, to move from the one-to-many to the one-to-one perspective. The one-to-many view, indeed.

It may seem like a very high mountain to climb. But if you rely on specialized companies like Doxee, with strategies that are designed based on your goals and needs.

Here are two examples:

Doxee Pvideo®: personalized and interactive videosbuilt based on the characteristics of individual recipients. They are the perfect tool for enhancing the dialog between company and customer. In this case, personalization is integrated with the video, by far the most effective type of digital media. Very important: calls to action can be included in the videos related to managing outstanding debts, which can thus be resolved in just a few clicks.

Doxee Pweb®: personalized micro-sites, designed based on the characteristics of the individual users they target. A real revolution in the digital Customer Journey, with several possibilities for implementation and among them, again, that of digital payments. By embracing this view, we draw a virtuous circle. Thanks to the enhancement of data, debt collection is improved and, at the same time, so is communication and the relationship with your customers.