10 Useful Behavioural Framework Models for Debt Collections
Nudge Theory: Nudge theory involves subtly guiding individuals towards desired behaviours without restricting their choices. In collections, nudges can include reminders before payment deadlines or suggesting convenient payment options.
Loss Aversion: This principle says that people are more motivated to avoid losses than to acquire gains. Highlighting potential negative consequences of non-payment can incentivise debtors to pay.
Social Norms Theory: People are influenced by the behaviours of others around them. Informing debtors that most of their peers are paying their debts can encourage them to follow suit.
Reciprocity Principle: Reciprocity suggests that people feel obliged to return favours. Offering small benefits or gestures of goodwill can encourage debtors to reciprocate by making payments.
Self-Determination Theory: This theory emphasises the importance of autonomy, competence, and relatedness. Allowing debtors to ...
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