Loans are the lifeblood of your community financial institution. In fact, revenue from loans makes up 50-80% of the average CFI’s business revenue. So it’s no wonder that credit unions and community banks like yours want to keep their lending portfolios growing, even as competition from non-traditional lenders and big banks increases.
One simple way to increase your lending velocity is to mine the data you already have about existing customers to identify the ones most likely to respond positively to lending offers. Then use these insights to send out targeted marketing campaigns, encouraging customers to bring more of their products under your roof. Here’s how it can work:
1) Use a business analytics tool to find customers with recurrent loan payments to other institutions. You’ll want to review Core Banking Systems, Loan Origination Systems, Profitability Tools, as well as your other 3rd party data sources. You can also glean useful information from transactional data like ACH reports and Credit Bureau reports. Look for regular biweekly or monthly payments to credit providers, and then check for how long those payments have been occurring. With a bit of detective work, you’ll develop an understanding of your customers’ current and upcoming credit needs, and be poised to make offers that will suit them better.
2 ) Create marketing campaigns for each loan product you want to promote. These campaigns should consist of multiple touchpoints to help nurture opportunities through the sales funnel with specific email messaging. Match customer segments to specific email campaigns to ensure the most relevant messaging possible. For example, customers with auto loans or mortgages with renewals coming up receive prompts and incentives to move the loan to your organization – the right message, at the right time.
3) Send out the emails, and then monitor each customer’s actions. If the customer opens the email and clicks-through to your website, they are expressing a degree of interest. If they reply or forward the email, then they are displaying an even higher degree of engagement. Refer interested customers to your product specialists, who can work with them to sell the loan.
By getting your personalized offers in front of customers before your competitors do, and making it worthwhile to switch providers, you can grow your lending portfolio rapidly. But that’s not all – this approach also has a nice knock-on effect in terms of customer satisfaction as well. When your customers see that you are proactively looking out for their needs, their loyalty increases. It’s a win-win approach to lending.
Want more tips on mining your data to identify the right candidates for each of your loan products? Download this eBook and learn how to accelerate your lending through digitization.