We spend between 80 per cent and 90 per cent of our time at work communicating, and the volume and velocity of messages we receive keeps rising. Research shows responding to emails takes up more than six hours of our workday and we answer around 121 emails a day.

While the number of emails sent and received is predicted to drop as the communication preferences of the millennial generation start to predominate, it’s essential to use the right medium for the right message.

Ken Tann, lecturer in communication management at UQ Business School, says good communication is important externally in customer engagement as well as internally in terms of interdepartmental coordination.

“Good communication helps develop trust, loyalty and, eventually, a better reputation and customer experience. For credit managers, it is very useful in problem detection and early intervention. Good communication can help the manager detect if the customer cannot pay and provide assistance or work out a repayment plan.”

Tann says it is equally important for credit managers to communicate effectively with other departments. “They should be able to provide detailed information for the finance team and the marketing team.”

Using the right channel

To choose the right channel credit managers should consider the context and purpose of the communication.

“In terms of responsiveness, phones and social media can be extremely responsive if the other person is available when you call or send a message. Email depends on the other party, so it’s not as responsive,” says Tann.

He explains one reason people hesitate to use the phone is because they are worried about saying something that they can’t take back. “Whereas, with emails and social media, there is a chance to look at the message and reflect on it before sending.”

Catia Davim is a partner in KPMG’s management consulting team. She says good communication is about encouraging people to understand the different communication modes available and when to use them.

“The great benefit of email is the record. But there is no guarantee the person is going to receive the message. It's also a slow process. Phone is more personal and it’s a two-way dialogue. You can have a proper conversation and build a relationship. The disadvantage is you don't have a record of what was said. So, it’s an idea to follow-up a phone call or face-to-face meeting with a summary email,” says Davim.

“Text is good for short, sharp messages and social media is great to build visibility in a market,” she adds.

Tann suggests credit teams draw on change management techniques to encourage people to work with unfamiliar communication channels.

“This starts with identifying barriers to using a communication channel and enablers to get people to change their habits. Barriers include cost, speed, reliability, ease, trendiness and familiarity,” he says.

Aside from overcoming barriers, it’s also important to encourage people to use the appropriate channel. For instance, it’s essential to establish the legitimacy of a particular channel, which involves sponsorship of the channel by senior management who actively use it.

“Clear policies to prompt staff to use appropriate channels also help. This is especially the case when it comes to encouraging people to use a new communication channel. Education and an opportunity to experiment are also important,” Tann says.

He says ‘change champions’ are also important in encouraging people to use a new communication channel or switch to a different one. This involves an authority figure promoting the use of a particular medium.

Amber Daines, director of communication consultancy Bespoke Communication explains everyone has a different communication style.

“If you prefer to email rather than make a call or arrange a meeting, it’s important to recognise that seems impersonal for some generations. Digital communication is fast and easy but not always the right way for every client or suitable for some serious conversations,” she says.

Daines says one way to encourage people to try new forms of communication is by incentivising them to, say, make five calls for every 10 emails sent.

“It’s also important to train staff to be more confident in digital skills and face-to-face meetings, where eye contact is vital,” she says.

Spoilt for choice

Tann says it's a myth high performing managers are skilled in a variety of communication channels. “High performing managers are able to select the right medium for the right message.”

This is important because the choice of channel has implications for the person on the receiving end of the message. “The medium can affect problem solving, decision making, the ability to come to an agreement and maintain relationships. And these depend on things like how sociable you appear to the person with whom you are communicating,” he adds.

Getting the best outcome involves training and specific guidelines and policies about how to conduct phone conversations.

“It is very important to have a communication strategy, involving an audit of the communication functions and processes needed for the business to operate. Then you can decide in advance which communication channel will be appropriate for specific functions and provide a very clear policy for employees,” says Tann.

In the context of credit management, it is also important to consider multi-channel strategies. So instead of just considering the pros and cons of individual channels the idea is to explore how they work together.

“Investigate how different channels work in credit management. Let's say you need to work out a payment plan with a customer. You will likely need to communicate over the phone and also by email. This approach allows you to personalise contact with the customer through phone and at the same time maintain an electronic record of the communication,” says Tann.

“This might happen in a specific order. So you may want to speak to the customer first to win their trust and follow up with electronic communication,” he adds.

Ultimately, the idea is to understand which channel suits specific communication situations, build the team’s skills around this and develop training and policies to back this up. That’s the best way to develop a credit management team with sophisticated communication skills to handle any situation.

Applying the 5Ws in credit management

UQ Business School’s Ken Tann says a good guide is to apply the five WH questions – who, what, when, why and how – when deciding how best to respond.

WHO needs to be communicated to? Are you including more people in the communication than you need to? That will produce many unnecessary emails people don't need.

WHAT is the required action? This is often unclear. Avoid sending emails that include reams of information without providing a clear course of action.

WHEN are you sending the message? How fast do you expect a response? People are inundated with emails and it may not be practical to expect an immediate reply.

WHY are people receiving the message? Make the purpose of the communication clear from the start or they won’t bother reading it.

HOW is it presented or worded? Avoid sending a message without thinking about it. After typing an email, take a moment to read it through so it sounds the way it’s intended to sound.