Text Messaging and Collections: Driving Response Rates 160 Bytes at a Time

Text Messaging and Collections: Driving Response Rates 160 Bytes at a Time published by Mercator Advisory Group, Inc. in May, 2009. This report consists of 29 pages, 8 exhibit and 2 tables. and the price starts from US $ 2950.

Introduction

Boston, MA. - May 26, 2009 - With delinquencies at an all time high and credit card chargeoff rates exceeding 6%, the role of Collections has moved from standard business function to critical driver of profitability. But Collections is both an expensive and a delicate process. Live operator calls cost $4 and more. How the creditor communications with the debtor also impacts Collections performance.

In a new report, Text Messaging and Collections: Driving Response Rates 160 Bytes at a Time, Mercator Advisory Group explores the impact of the spread of text messaging on business-to-consumer communications through the lens of Collections. Against the background of mobile' s spread and exploding text messaging volumes, B2C text messaging has expanded from mobile marketing into financial functions from corporate treasury payment approvals to Collections. The report examines text messaging' s role and its key attributes of timeliness and situational relevance as generators of what appear to be a disproportionately positive impact on Collections performance.

“Text messaging has grown from Teen addiction into a national communications staple. As a new channel for business-to-consumer customers, text messaging complements and reinforces what we' re already using to reach accountholders. Reaching delinquent accountholders via text is showing solid results,” George Peabody, Director of Mercator Advisory Group' s Emerging Technologies Advisory Service and principal analyst on the report. “The accelerating effect on consumers of text messaging when used in combination with automated voice messaging and interactive voice response units, never mind traditional media, affirms this new channel' s unique value.”

Highlights of the report include:

• The mobile channel reaches more people than ever. According to the CDC, the population covered by landline telephones has fallen below 1970 levels. One in 4 adults between 18 and 34 live in mobile phone-only households.
• Text messaging isn' t just for teens any more. US users send nearly 80 billion text messages per month.
• Enterprise usage of text messaging requires careful planning and program management, including strong opt-in / opt-out provisions and message content oversight by the ultimate text messaging gatekeepers, the mobile network operators.
• Text messaging traffic in US financial services applications now exceeds 12 million messages per day and is growing over 100% per year.
• The application of text messaging to Collections has produced significant results when employed as an element in a multi-channel program.

This report contains 29 pages, 8 exhibit and 2 tables.

Companies and programs mentioned in this report include: Sprint, Verizon Wireless, AT&T, MetroPCS, SoundBite Communications, Walmart, DaysInn, Bank of America, Papa John' s, Facebook, Prairie Interactive Messaging, ClairMail, Apple.

Table of Contents

• Introduction
• Mobile Communications
• Leaving the Landline
• US Text Messaging Today
• Why Text Messaging Works: Situational Relevance
• How Mobile Messaging Services Work
  • Extending Value with Automated Voice Messaging
  • Cost Structure
• High Payoff Applications
• Text Messaging in Collections
  • Free to End User
  • The Cost of the Contact Center
  • One Message - Two Channels
• Collections Case Studies
  • Verizon Wireless Launched Collections via Text Messaging in 2003
  • Credit Card Issuer Collections
  • Loan Portfolio Performance
• Considerations
  • Program Design
  • Building the Opt-in Database
  • Text Messaging Cost Uncertainties
  • Regulatory Requirements
  • Service Level Agreements?
  • Free to End User (FTEU) Text Messaging
• Vendor Profiles
  • SoundBite Communications
  • Prairie Interactive Messaging
• Conclusion
  • It�fs Hard to Beat Ubiquity
  • Leveraging Situational Relevance
  • A New Channel for the Contact Center
  • MNO Lock on SMS Channel
  • The Breach in the Wall
  • An Effective New Channel in a Multi-channel Collections Strategy

Table of Figures

• Figure 1: Communications Services are Essential
• Figure 2: Mobile Penetration Continues to Grow
• Figure 3: Landlines Continue Their Decline, Text Messaging Skyrockets
• Figure 4: Age Comparison of Percentage of Respondents who viewed text messaging as
• Figure 5: The Text Messaging Ecosystem
• Table 1: Combining text messaging and IVR produces Strong Results
• Figure 6: VZW SMS Collections Program Drives Customers to Self-service Channels
• Figure 7: Results of SoundBite Communications Text Messaging Combined with Calls
• Table 2: Related Guidelines and Regulations
• Figure 8: The Multi-Channel Effect Requires Study

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