When it comes to paying bills, some people have a million excuses (both valid and invalid) for skirting their obligations. Unfortunately, lenders constantly deal with borrowers' excuses when it comes ...
In this age of digital communication, smartphones, smartwatches, and instant information, consumers don’t have to look far—or at all (Hello, digital ad retargeting!)—to find companies that are chomping at the bit to serve them in just about any capacity. While this is great for consumers, it poses a challenge to lenders. How can financial institutions rise above the increasingly large pool of competitors to win a borrower’s business? Fortunately, traditional financial institutions already offer their customers many advantages, and focusing on those existing advantages is the key to winning business and deepening your existing relationship.
When consumers are in the market for a new vehicle, their first stop is typically their local dealership. For most consumers, before they even think about financing, they go for a test drive. If your financial institution hasn’t already convinced them that you are the best place to finance their vehicle, he or she can secure financing from one of the dealership’s indirect lending partners within minutes from their pristine Finance Insurance offices. To thwart this, it’s important that your borrowers know that financing through your institution is their best option.
To stand out from other lenders and show borrowers why your institution should be their first choice for all of their financial needs, focus on promoting these four benefits and features:
1. Interest-rate savings
Sometimes borrowers may not realize that a half a percentage point can lead to significant cost savings over the life of a loan. If you offer competitive loan rates, be sure to educate your customers and potential borrowers about how much they could save by financing their loans through you. By simply making your customers aware that they could potentially save thousands of dollars by securing a 3% interest rate (at their “home credit union”) instead of a 4% interest rate (with the dealership in-house financing department), you’ll make it easier for them to select you for their financing needs.
2. Tailored lending services
Does your institution offer customized lending services that include loan programs for veterans, teachers, subprime borrowers, first responders, etc.? Or, maybe you offer a seamless online application process that meets the needs of busy professionals. Whatever tailored services you provide, make sure your customers and prospective borrowers know that you have a culture of meeting their unique needs through both products and service solutions. Stress your institution’s willingness to work with borrowers on adjustments to terms and payments when unexpected life events occur. As members of a service culture, make sure your employees understand they have a responsibility to offer education, explain loan terms, and make thoughtful and meaningful recommendations for products that will benefit each individual borrower.
3. Community service
Another way to stand out from other lenders is to tout the work you’re doing in your community. Corporate social responsibility benefits both your financial institution and the community around your business. It’s an opportunity to engage your customer base—including millennials. In fact, according to Cone Communications, 93% of millennials feel better about companies upon learning the efforts they support and in what capacity. Further, 77% feel a stronger emotional connection to purpose-driven companies. A great way to encourage borrowers to do business with your institution over your competitors is to publicize and share your commitment to the community and service work completed by your employees. This is a unique way to differentiate yourself from nationwide and online competitors.
4. One-stop financial shop
If a consumer trusts you with their loan, chances are they will trust you with their other financial needs. It’s likely that you have financial products and services to meet the needs of your customers at all different stages of their financial lifecycle—from basic checking accounts, to investment products, to vehicle and loan protection products—it’s important that you educate your customers on the various ways that you can support their financial needs, as well as the value they can receive by partnering with your institution as their one-stop financial shop.
The benefits and tailored service your financial institution already offers are the keys to standing out in a crowded lending and financial services landscape. Make sure your customers, existing borrowers, and prospective customers see that competitive interest rates are just one reason they should think of your financial institution first when they need financial products and services.
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