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Most financial institutions see the enormous benefits that indirect lending can provide. With little impact on your front line staff, and utilizing much of the back end processes that facilitate your direct lending program, indirect lending can increase your auto loan portfolio significantly and introduce your financial institution to a new crop of borrower. However, turning that indirect borrower’s loan into a full relationship can prove challenging.
How do you make sure indirect borrowers don't view their loans with you as a "one and done" transaction? Here are four steps you can take to capture additional business from your indirect lending borrowers and make them think of your financial institution first when they need additional banking and loan products.
Purchasing or refinancing a vehicle can be an arduous process. Borrowers are inundated with numbers and terms they may not fully understand, and usually walk away with paperwork that gets shoved in a drawer and only looked at when it’s time to refinance the vehicle or pay it off. Many times, indirect borrowers may not have a clear understanding of who their new lender is after all is said and done, so make sure your financial institution creates a welcoming start to your new relationship.
You can greet your new borrower within minutes of them signing their loan paperwork with an automated email or text message. Thanking them for their business and congratulating them on their new vehicle via text or email can start the relationship off on the right foot.
Once the loan has been funded and all information is ready to present, create a compelling welcome kit that includes:
Attention-grabbing colors and visuals. Once you have the customer's attention, you have the chance to establish a relationship.
An introduction to your financial institution, emphasizing community ties if possible and applicable.
Loan terms and details as clearly and simply as possible.
Information on other products you offer and an explanation of why it's beneficial to have multiple financial products from a single source.
A thank you note to let the borrower know you appreciate that they chose your financial institution.
Contact information for the loan officer, customer support, etc.
Now that your borrower knows a little more about you, work on deepening the relationship. Drip campaigns are a great way to keep your institution top of mind for your indirect borrower and allow you to showcase various products. Utilize email and direct mail to reach out on a consistent basis to remind your borrower about all of the various products and services you offer, keeping convenience the main focus for your messaging. Indirect borrowers may not be located in your neighborhood, so products that work well despite geographic location include:
Various insurance products
Credit cards and credit card balance transfers
Lines of credit
Typically, indirect borrowers are less likely to walk into a branch and more likely to interact with your institution through mail, phone, or digital channels. Make sure you’re ready to do business with them on their terms. In addition, make sure your borrower has digital access to their vehicle loan. Quick and easy online and mobile access to loan information, the ability to make online loan payments, and online access to skip-a-pay requests, are all ways to impress an indirect borrower and potentially gain a shot at increasing loan and deposit balances with them.
People prefer interaction through different channels. Some of us like to talk on the phone, while others only communicate through email, text, or online chat. Consistency, and sometime redundancy, is required to gain top-of-mind awareness amid a sea of competing messages. In addition to the welcome kit and an email/direct mail drip campaign, set up some additonal ongoing communication touch points to keep them engaged long after they've closed they loan:
Send an email newsletter that provides educational information on a variety of financial topics.
Conduct periodic personal check-ins by phone and/or email to offer help with their existing products and answer any questions/concerns they may have. After learning what their pain-points are, you can then provide helpful tips or suggest ancillary products that will help them overcome those pain-points and increase their satisfaction with your institution.
Use Facebook, Twitter, and other social media to stay connected, deepen your relationships, and invite feedback.
Use product-related posts sparingly. Remember, social media is about social connection—not about making a buck. Filling your social feeds with sales pitch after sales pitch, will turn people off.
Create and share your original content, and share content created by your customers, vendors, and leaders in your community.
Post and start discussions about community events and other local news/functions to demonstrate you care about and are active in the community.
Vary the days and times of your posts; don't ignore weekends, when your borrowers may have more time to browse and respond.
Repurpose content among social sites, but vary your timing so your social feeds don't seem too redundant.
Have a designated person or team that is responsible for monitoring your social sites at all times, and have a detailed plan in place for addressing questions and/or complaints appropriately and in a timely manner.
Many may view indirect lending as a short-term transaction with little opportunity to grow into a full banking relationship, but there are ways to increase balances, improve retention, and build your indirect portfolio into a long-term avenue for generating growth within all facets of your 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.
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