Consumer lenders are seeing a significant rise in popularity and are leading the way in the ever-changing landscape of financial institutions and loan originations. Many consumer finance lenders are flocking to digital platforms hoping to transform their marketing strategies by providing consumers instant online banking and mobile offerings. However, you may want to reconsider these tactics after learning more about some of our key insights and takeaways, including how offline actions actually significantly drive consumer decision making.
The problem is, while an online approach makes daily banking needs like money transferring, bill pay, etc. easier; people still rely on offline actions to primarily drive decisions about more complex transactions such as taking out a loan. A major challenge for consumer finance lenders is ensuring a seamless transition between their digital presence, direct marketing presence, and offline presence to create a consistent customer experience and gain invaluable trust from their prospects. Many consumers state that decisions about major financial decisions are based on offline interactions; whether it be calling or visiting a financial institution to discuss the process with an expert.
In order to understand how your marketing and data processes affect your offline presence as well as your prospect lead generation and awareness; it's important to first understand some key takeaways about consumer-lending behaviors.
Consumer-Lending Behavior and Insights
1. Embrace going offline
Digital marketing is a huge trend right now, and while younger generations are portrayed as flocking to the internet to avoid interaction and enjoy a smoother process, Invoca's survey of consumers who recently took out loans of $15k or more paints a different picture.
Banks, especially, need to take advantage of the current environment of online-focused lenders, by utilizing their physical spaces and offline interactions to make major impacts on consumer decisions and trust. 65% of respondents stated they were more likely to trust and take out a loan from an institution that they spoke with on their phone for big ticket loans like personal loans, cars, homes and higher education. This number jumped to 73% when it came to taking out a loan of $100k or more.
2. Customer Experience Matters More than Ever
In the current climate of personalized marketing, consumers expect all channels to be intuitive and customized to their tastes and needs. Since we know that consumer calls and in branch experiences can drive larger loan originations and boost consumer loyalty and trust, it's also important to keep your marketing consistent with your brand, while ensuring deep knowledge of consumer actions across all channels. 84% of respondents said that immediately being routed to the right representative on a call increased their trust of that institution and the likelihood of their decision to take a loan with them.
So how does that effect your prospecting processes? In this case, using extremely accurate and thoroughly cleansed data that's been verified from multiple sources, as well as using demographic, psycho graphic, and predictive attribute appends to get the fullest picture of your prospect before they even receive your marketing messages, whether the first point of contact is by phone, by email or by direct mail. Personalizing direct mail and email pieces with a unique code that immediately identifies the prospect when they express interest means that you can easily expedite their experience, and gain their trust by already having the information you need to provide them with the products and services you know they're eligible for.
3. Offline Actions Drive Research
For the majority of consumers, offline actions are the primary mode of research when making a decision about a financial institution to apply for a loan. 38% of consumers visited a branch before coming to a decision, giving a surprising edge to brick and mortar locations in a time when many people are watching fintech closely for competitive marketing modes. 84% of consumers are calling multiple banks, multiple times during the first phase of searching for a loan.
How are consumer lenders taking advantage of these trends? By ensuring that digital marketing is kept up with, as well as marketing to local areas in a personalized way, lenders are able to see a significant increase in brand awareness during the research phase of their prospects. By utilizing custom radius data, as opposed to traditional radius bucket segmentation, lenders with storefront locations are able to drive visits and trust to their lender locations through personalized marketing that makes it easy for their prospects to feel welcome and comfortable about making a call, stopping by, and feeling secure about the ability of that lender to be available to handle any difficult or complicated questions.
Implementing Consumer-Lending Behaviors Into Your Marketing Strategies
1. Do Your Research
Always make sure you have the data in place to understand your current customers, potential prospects, and ideal lending opportunities. By utilizing data about buying stages, product interest, competitor awareness, and predictive modelling to identify key prospect attributes that can identify the most likely prospects for your products and services, you'll be able to identify your core customers and prospect in order to refine your strategies and tailor your messaging. You'll also want to identify the primary markets that will be key for offline actions such as branch visits. On a campaign level, it's good to market outside of your area in order to reach those who may be eligible for a loan and can complete the process remotely; but also developing a customized radius map will allow you to invite your locally based prospects in to talk through the process with one of your experts, which is proven to boost the likelihood of their decision to take a loan with you.
2. Keep Segmentation a Priority
You also want to identify the right range of prospects for each of your specific products and track what prospects are receiving which offers. By utilizing tri-bureau data, you'll be enabled to keep your criteria narrow, without losing quantity, since you'll be capturing 20-60% more of your audience with each bureau you add. Keeping marketing materials unique, such as including bar codes in mail pieces and emails for consumers to scan in store or through your app, will allow you to make sure you're always routing them to the offer that you know they're eligible for and interested in. Other ways to streamline the process is to monitor your customer list, and stay informed of when one of your clients is searching for a loan with another institution -- allowing you to maintain contact and stay in front of them with the perfect offer to retain their account.
3. Always Use Accurate Data
You never want to extend a firm offer of credit based on data you're not sure you can trust. By utilizing tri-bureau solutions, and an data provider that's known for accurate and consistently cleansed data, you can trust that the right offer is being extended to the right people. Your data provider should be able to discuss as-of dates, enabling you to understand how fresh your leads are, as well as guide you through their processes of de-duplication, suppression, and help you understand the market through expert industry knowledge. You'll also reduce marketing dollars being wasted on bad-quality leads, and instead be able to focus your acquisition and retention efforts elsewhere, since you can trust that you're getting the highest quality and freshest data possible -- especially if you want to tap into the advantages of offline action through personalized pieces, local targeting, predictive modelling, and getting higher quality phone leads (always hard to verify, but getting less phone numbers that are higher quality will still provide a higher ROI).