Personalized Communication Strategies: Towards A New Debtor Typology Framework

Abstract

Based on debt collection agency (PAIR Finance) data, we developed a novel debtor typology framework by expanding previous approaches to 4 behavioral dimensions. The 4 dimensions we identified were 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 get 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.

Towards Effective Automatic Debt Collection with Persona Awareness

“…However, implementing user personas in real-world applications can be challenging, as it is impractical and unnatural Wang, 2021) to require users to provide personas information before conversations, especially in sensitive scenarios such as debt collection. Previous studies on debtors' personas in debt collection have mainly focused on a statistical analysis of their social behaviors (Ghaffari et al, 2021;Goetze et al, 2023), barely touching the scenario of automatic collection agents. Therefore, there is an urgent need for systematically analyzing and utilizing the personas to promote the development of automatic debt collection agents.…”

Debtor Communicative Strategies Analysis in “Confession of a Shopaholic” by S. Kinsella

“…Reactions include any payment page visit, taking an installment plan or making a promise to pay, any inbound communication, or any direct payment to trigger reactions. (Ghaffari, Kaniewicz & Stricker, 2021).…”