In alternative lending, competition is fierce. It is not enough to attract new customers to your services. You have to encourage their loyalty. Customer retention is even more important than customer acquisition.
Your goal should be keeping your clients to maintain business, cash flow, and promotion. More than that, customer retention is the best form of marketing. Clients who recommend your services to others make the best ad. Here we discuss some customer retaining methods to apply in this current economic landscape.
1. Turn Tailored Communication into a Priority
When people borrow money from alternative lenders, they need immediate answers. They need tailored solutions to their problems. According to a Global Consumer Banking Survey by Ernst & Young, consumers want to trust and engage deeper with banks, lenders, and credit unions. To build trust, engagement, and loyalty, financial institutions need to provide clients with the right content. Clients want high-value propositions, multi-channel connections, and excellent customer service.
Marketing experts advise alternative lenders to diversify and optimize their communication channels. From email marketing to apps, as a lender, you have to meet your clients halfway. You need to adjust your information and transmission methods according to their needs and preferences.
As a service provider, you need to get your message across fast and precise in the alternative lending business. A lending firm should inform its business customers about their advantages. It is a model of good practices. Customers can learn more about the financing solutions by navigating a clean, readable web page. At its end, they have all the information they need to make an educated choice.
But good website copy is not enough. Lenders need to understand their audience and offer them tailored information via the customers’ preferred channels. For this reason, experts propose a mix of:
- Email marketing;
- Social media channels;
- Branded apps, etc.
As a lending firm, you need to assess how your clients reach you. Many perform a simple Internet search on mobile. Others use social media. Most of them already have your phone number from friends that already used your financing solutions. To stand out from the crowd, you have to consider device diversity (mobile, desktop, phone, etc.). You also need to make sure you offer the same information across all channels. You cannot state you do not factor in credit scores for business loans and then have your agents tell clients different.
2. Educate Instead of Just Selling
When you sell a service, you cannot expect customers to come back to you. The market is competitive, and they will get new and better offers. For you to retain customers, you need to build a relationship with them. One of the ways to do it is to provide more than just a product. You need to give people access to learning resources.
Do not assume your customers know everything about traditional lending and alternative solutions. Most likely, they know too little. Teaching is one of the most consistent and powerful methods of keeping people close.
Customer education programs are not new. They are critical to your success. Create a knowledge base (blog articles, webinars, white papers, infographics, etc.) to help your clients understand how your financial instruments work. You can also add self-service tools. They come as interest rate calculators, payment calendars, adequacy calculators, etc. The more information you offer people, the more likely they are to engage with your business. And recommend it to others.
When it comes to financial solutions, building a community of satisfied customers is crucial. More than reviews, a community forum is a vital trust signal for your company. It is one thing for a business owner to talk to your agents about a loan. It is different to discuss such matters with people who shared the same experiences.
3. Keep Clients in a Feedback Loop
People have less and less time to read newsletters and answer surveys. Customer loyalty thrives on asking for and offering feedback. For this reason, proactive customer service and customer engagement are critical for retention. If a borrower’s deadline comes closer, send them an email. Throw in a customized offer for another loan with impossible-to-refuse conditions.
The more you manage customer engagement and feedback, the more you can improve your up sells and cross-sells. Extending the right offer at the right time to the right people are crucial for your business and customers. If your business model allows, make personalized offers to some clients. Offer them extended credit periods or lower rates. The word of mouth you get is more effective than all the commercials.
Bottom Line
In the competitive market of alternative lending, you need to gain new customers. More important, you need to turn existing one into loyal brand ambassadors. Make sure you implement the correct retention strategies for your audiences. Always run a transparent and reliable business. People these days are more willing to trust other people than companies. Make sure you turn your clients into genuine influencers. The more satisfied partners you have, the more willing other clients will be to work with you!
