The ONE Tool to Increase Customer Loyalty and Advocacy

Insights» Marketing & Outreach

September 1, 2020by Abhi Golhar

Read the full Originate Report September edition here.

Marketing for your lending business needs to transform with the changing customer expectations. The concept of a marketing funnel that ends with lead conversion and customer acquisition is already outdated today. If you want to skyrocket your lending business and reach exponential levels of growth, the approach towards the marketing funnel needs to transform.

The New Age Marketing Funnel

Most of us are familiar with diagrams that show the customer acquisition process in the form of a marketing funnel that is wider at the top and narrows down towards the bottom, culminating in a small outlet. The top part is the awareness stage, the middle denotes the consideration stage and the bottom portion is the decision stage. A marketing funnel is simply a tool to help you visualize your buyer’s journey from the stage of gathering the initial knowledge about your lending business to the stage when they finally convert and sign up for availing financial services. However, there is a snag in this model. The marketing interaction does not cease at conversion, it extends beyond that. Renewed efforts need to be made after the conversion to build customer loyalty and result in advocacy. Thus a high performing marketing funnel needs to be composed of the following stages.

  1. Awareness stage
  2. Consideration stage
  3. Decision stage
  4. Loyalty stage
  5. Advocacy stage

Why Lending Businesses Need To Focus On Customer Retention

Acquiring new customers may form the business baseline for private lenders but customer retention is the key to excellence. It keeps the money flowing in the form of repeat business. According to Bain & Company, the cost of acquiring new customers is 7X the cost of retaining an existing one, so focusing on building customer loyalty makes total sense from the business point of view. It is also easier to sell to customers who you have had a previous relationship with. Focusing primarily on acquisition may bring new customers to your lending business, but without a focus on boosting customer loyalty and advocacy, you risk to disappoint your existing customer base which may prove counterproductive. The bad news is that lending businesses rank among the lowest in terms of customer retention. Most lending businesses fail to retain a whopping 93 percent of their customers who choose to go for a new mortgage. The coronavirus pandemic has already heralded that a transformation is required in the lending businesses. The good news is that technology can act as a savior and all you need is one tool to help you rank high on customer satisfaction and boost retention.

CRM For Customer Retention and Advocacy

Focus on maintaining and enhancing relationships with borrowers needs to be an organization-wide change but technology can definitely provide the necessary tools to accomplish it. The mortgage industry is now focused on using digital tools and data to their advantage for growing their business. Customer relationship management (CRM) software like Benchpoint or Active Campaign can help lenders stay on the top of their game and better manage customer interactions through all stages of the marketing funnel, right from awareness to advocacy and optimize the customer lifetime value.

What is a CRM?

A CRM is a software that can help sales and marketing professionals record and manage their customer interactions. It provides a comprehensive overview of the customer interactions in each stage of the customer acquisition and retention process. Not only can you access and track historical deals that have occurred with the customers, but you can also plan for future leads and nurture the existing relationships, all from within the software itself. A CRM gives you data-backed insights about the historic customer interactions, allowing you to discern what’s working and what isn’t. It also allows you to identify any bottlenecks in the process and helps optimize your lending business for maximum profitability.

 

Advantages of CRM in Private Lending

  1. Personalization at scale: Technology allows businesses to treat every customer who applies for a mortgage or loan to be treated on an individual level. The products and services offered can be customized to individual needs.
  2. Easy tracking of past conversations: The interaction with each borrower can be logged into the CRM and this data can be leveraged at the time of future needs. For example, if a certain borrower has previously enquired about a certain type of loan or mortgage, the marketing team can send them supplemental information needed to take the process further.
  3. Customer satisfaction as a result of quicker processing of loans: Since the lenders don’t have to juggle between tons of different software and have the access to all the data and documentation they need within the CRM, the processing of loans takes place faster and results in greater customer satisfaction.
  4. Smoother customer interactions: All customer interactions being logged into the CRM ensures that a customer doesn’t have to have the same conversation over and over again. The customer support representatives can simply check out the customer profile in the CRM and they will be brought up to speed.
  5. Leveraging data for new business opportunities: Data within the CRM can help pinpoint potential leads for upselling and cross-selling which can take your lending business to newer heights.
  6. Data-driven insights for process improvement: CRM data and insights derived from the reports compiled from it can help in identifying successful campaigns that can be replicated and areas of improvement to be worked upon for bringing in better opportunities for your lending business.

Closing Words

The face of lending may look quite different in the next few years as loans are delivered in new and innovative ways. The applicants might avail your services and fill out loan applications remotely. With 24×7 availability and query resolutions through chatbots, data will prove to be the means of rising over your competition and boosting the profitability of your business. While data management through a CRM software may seem like a futuristic idea, the tech-savvy borrowers of today expect no less. Having access to data and drawing actionable insights from the same will essentially be the key to ensuring customer loyalty and bringing in new business lending opportunities through customer advocacy.