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Indirect loans are becoming increasingly popular in the modern lending landscape. While these products can be great for borrowers seeking the best rates and financial institutions hoping to expand their business, indirect lending also creates a unique set of challenges. Borrowers may never visit the institution they loan from—and oftentimes they don’t even speak to a lender at the institution before signing papers! Even if you never meet your borrowers face-to-face, it is important to maintain the same level of communication and customer service your institution is dedicated to, no matter where the loan originated. Consider these six suggestions to ensure your institution has an effective communication strategy in place for indirect borrowers.
1. Speak Their Language
Different people prefer communicating through different channels. As technology creates more contact options, it’s important to keep pace with borrower preferences. Phone calls, emails, and text messages are all expected options for borrower-institution communication. Consistency and redundancy are both preferable and possible, with some customers stating their preference for a given method and others requiring multiple contact methods to gain top-of-mind awareness.
Regular communication touch points with your new indirect borrowers can make a substantial difference in their customer experience.
Related reading: Transform Your Borrower Communication to Keep Customers Happy
2. Show Them You Care
Demonstrate that you care with something as simple as sending a regular email newsletter that shares more about your institution, providing some personality to your interactions, so that your borrower learns more about who you and your team are. Let them know what you and your staff are doing to make an impact in the community and how they might get involved. Occasionally, follow up with a mailer that includes a free car wash or oil change—small gifts that remind them that you know who they are and that you appreciate the business they brought to your financial institution.
3. Sell by Providing Excellent Customer Service
One of the best ways to turn existing customers into repeat customers is to consistently provide them with stellar service. Offer help with existing products and friendly suggestions of complementary products through periodic personal check-ins by phone and email. Don’t overlook the opportunity to provide a borrower’s next vehicle loan, and depending on their previous loan behavior, there may be a benefit in pre-approving them for a new vehicle.
Watch the average age of your vehicle loan portfolio, and identify when your borrowers tend to refinance or trade in their vehicles. Although the average American keeps a new vehicle for 6.5 years, and a used vehicle for just over five years , typical financial institutions see their loans turn over somewhere between 24 and 48 months. You don’t know exactly when a borrower may be shopping, but you can identify when they’re more likely to be looking, and that’s the prime time to be reaching out with a reminder of what your financial institution can do for them!
Related reading: The Top 6 Customer Service Mistakes You Make Time and Time Again
4. Make Your Brand More Human via Social Media
As I mentioned in a previous blog post, social media is one of the best ways to have a friendly, human presence in your borrowers’ lives. By creating original content and sharing content created by borrowers and other members of your community, your institution becomes a valued part of borrowers’ networks. Encourage indirect borrowers to use Facebook, Twitter, and other social media networks to stay connected with you, deepen your relationship, and encourage feedback. You can even start a hashtag that borrowers use to show off photos of them with their new vehicle, which increases awareness of your brand within their social networks.
5. Provide Social Service
Twitter and Facebook are now ways people engage businesses with service-related questions, especially when they feel like they are not getting a response through traditional means like telephone or email. While social media may not be a stated contact method for traditional communication, many customers are most comfortable contacting institutions through the more informal, familiar channels offered by Facebook and Twitter.
General questions about rate, underwriting criteria, and account-specific inquiries can and will happen. Writing standard responses that can be posted immediately can keep this from becoming an issue for your financial institution, while also improving your customer service.
6. Above and Beyond
Whether your borrowers walked through your front door or signed a loan indirectly, meeting them where they are and extending your brand personality into the realms they’re most comfortable with, can make a significant difference in their customer experience—and increase the odds that they’ll come back the next time they need a loan or other product or service. Beyond simply using multiple communication methods and becoming active on social media, financial institutions should encourage customers to share their feedback openly.
Ask for input and feedback on the auto loan process and encourage your borrowers to post reviews on sites like Yelp and Facebook. Don’t be afraid of negative reviews, but do make sure you are ready to address concerns should they arise. This can be a scary area to address for lending, marketing, and compliance, so put together a plan that every department is comfortable with before enacting it.
With a little bit of cooperation and an unwavering dedication to customer service, financial institutions can engage and communicate with all of their borrowers on their favorite channels to ensure complete satisfaction and repeat business.
As Manager of Business Development for SWBC’s Financial Institutions division, Crystal Bullard works with lenders to increase their interest and non-interest income through programs such as AutoPilot Lending and Specialty Products. Before joining SWBC in 2015, Crystal served as Consumer Lending Retention Program Manager at Golden 1 Credit Union in Sacramento, CA, where she developed strategies to increase wallet share and retention for direct and indirect loan members. She also oversaw customer engagement, marketing, and product development for Golden Pacific Bank in Sacramento, as Vice President of Marketing and Product Management.