Lending is different now.
Enticing loan products and responsive teams count for less if you can’t reach the right borrowers and keep them happy, especially in a fiercely competitive segment.
From community payday lenders to national banks, small-dollar lending is an already crowded segment, which continues to grow.
In this moment, think of your brand as a primary differentiator that can, and should, enhance lead generation, and ultimately conversion rates. As with all things financial services, trust, transparency, and positive experiences are crucial to get your brand to the top.
To do this, smart lending marketing strategies become essential. In this article, we’ll explore methods that can help you leverage omnichannel approaches to attract, analyze, and retain qualified borrowers whose income sources, and job profiles, continue to evolve.
The Importance of Lending Marketing
Traditionally, for those with weaker credit scores, the universe of small-dollar lending has featured installment loans, lines of credit, auto title loans, payday loans, and rent-to-own, with few financial institutions involved.
In 2020 new regulations sought to better-protect consumers. Coordinated by the Office of the Comptroller of the Currency, FDIC, Federal Reserve Board of Governors, and the National Credit Union Administration, these changes have transformed the small-dollar lending terrain, creating greater competition.
As recently as five years ago, no large banks were offering small-dollar loans to their checking customers. Now six of the eight largest U.S. banks do.
Consumers are naturally attracted to the ease of what are considered “safer and more-affordable options,” which can deliver significant interest savings and instant access to funds.
Borrowers are also getting smarter. And may expect rates that are more competitive and flexible repayment terms.
With bigger players and deeper marketing pockets now in the space, smaller lenders need to work harder to get attention. An effective targeted lending marketing strategy, driven by a compelling value proposition, can start to foreground your brand, grow and protect market share, and help you stand out in a crowd so marketing success becomes a reality.
Lending Marketing Strategies to Attract Borrowers
Engaging with potential customers is a complex journey. Today’s competitive lending highway is crowded with options for those consumers shopping for affordable small-dollar loans.
Without a real plan, your brand could take a wrong turn. One guardrail is leaning into the immense power of marketing with a structured, holistic, loan marketing effort.
You can set real goals, and help ensure nothing gets lost along the way. Lead with a roadmap. Not the road. Here are some strategies to keep in mind.
Digital Marketing
The potential heft of digital marketing for smaller lenders can’t be overstated.
As noted by Dave Mortach, consumers routinely use online channels to research loans, making digital marketing a powerful tool for lenders to attract, engage, and convert potential borrowers.
Digital lending marketing is shaped by many moving parts:
- Web content: Your site’s primary “calling card,” where your integrity, reputation, and reliability are vetted. As a baseline its look and feel should be engaging and clear.
- SEO: Think of SEO as the backbone of a strong digital lending marketing strategy. As a start, make sure your products are clearly defined and have unique pages.
- Content marketing: Long-form content that educates your customer base on key topics and positions your brand as a thought leader. Research what customers are looking for, and give them the value they need.
- Social-media marketing: One component of digital marketing you can engage creatively to promote your products and services. These organic environments include Facebook, Instagram, Linkedin, and others.
Paid media and email marketing are also fundamental pieces in your marketing puzzle. Make sure you’re mindful about each one, and find ways to complement them, such as sharing tailored content on multiple platforms.
Lead Providers
While your digital marketing strategy is an essential first step to drive organic (i.e., unpaid) visitors to your brand, many lenders rely on lead providers, who act as intermediaries between your brand and potential clients.
Providers collect lead information from their own sources, and then assess whether they’re potential fits for your services. You then buy this lead information from them, which you’ll generally receive either as a spreadsheet or through a CRM (customer relationship management) system.
Lead providers can become a valuable partner in your marketing efforts, so you must absolutely make sure that they are the right partner for your organization. A good lead provider is transparent about their data collection methods, gives you realistic lead expectations, demonstrates proven tactics, and provides leads that are current.
Trusted lead providers include the likes of Zero Parallel and LeadsMarket.
Referral Programs
Marketing strategies for lenders often keep traditional options in the mix. Collaborative referral networks honor the art of the relationship.
In short, individuals, organizations, and existing clients receive rewards or commissions in exchange for referring potential borrowers.
These partnerships, often community-based, drive new business, while helping borrowers find desired solutions from reliable sources.
Consider a few benefits among many:
- Protect budget: Referral networks can be cost-effective. The brand spends only when successful referrals are made.
- Learn more: Referral borrowers have their own preferences. This data becomes available to you, thus helping you tailor products and services.
- Deepen trust: Word-of-mouth marketing still matters. With a personal topic like money, when a trusted source recommends a financial brand, the lender’s credibility can only benefit.
Organic referral networks create yet another avenue for connecting your brand to a wider base. Referral programs can advance brand momentum, often uncovering hidden opportunities in new segments.
Partnerships and Collaborations
Referral marketing can be an exciting pipeline for reaching new segments. But nuance is key.
You don’t want to be “one size fits all,” because attracting the wrong leads means wasted effort.
As a starting point, refine the process. With the help of data technologies, you can develop accurate consumer profiles, while defining prospects and trends. These can then determine how you create, and nurture, partnerships.
If your goal, say, is reaching young professionals, partnerships with financial advisors could make sense. If you’re after young homeowners, consider middle-market real-estate firms. When you carefully tailor a partnership or collaboration, you’ll often realize better results.
Lending Marketing Strategies to Retain Borrowers
In the lending world, retaining “happy customers” is a simple and real goal. Happy customers gossip about you in all the right ways. Happy customers deliver repeat business. Happy clients are loyal because you solved their problems.
Here’s how you keep your customers being your customers.
Customer Relationship Management (CRM)
Despite our fast digital world, regulated financial transactions require forms and documentation, which take time.
As your lending brand grows, you may oversee relationships (and more documents) for a larger portfolio. The ultimate goal is less bureaucracy, and helping everyone get what they need. This is where a customer relationship management platform (CRM) could help.
When lending brands are organized and consistent, it not only tightens the process internally, but ensures that customers feel happy, trusting, and at ease. The benefits are many.
Not all CRMs are the same, so it’s a matter of finding the right platform for your business. When you do, you can easily track leads while managing existing accounts. This will help you provide good customer service, and ultimately nurture high-value relationships.
Borrower Experience
It’s a warm feeling: A prospect opens a tailored email from a new lender. They immediately see their name, and a mention of one of their hobbies.
As noted by Campaign Monitor, click-through rates and conversions are significantly higher with personalized lending marketing strategies.
Delivering a range of dynamic applications, “personalization” naturally moves beyond digital channels. People like to feel special. Financial customers who feel important are likely to be repeat buyers if they believe you value the relationship.
You can jumpstart this trust with an inviting omni-channel user experience, proactive support, and consistent, helpful communications.
Loyalty Programs
Customer loyalty is the bedrock of any successful industry.
Small-dollar lending is no different, as loyal customers can bring advantage to a brand trying to manage marketing budgets in a competitive segment.
Successful loan-loyalty programs work best when they’re personalized, customized, have smart channel integration, and feature clear engaging communication. They take many forms:
- Direct cash rewards or cashback.
- Discounted interest rates on future loans.
- Access to financial-planning services.
- Friends-and-family referral bonuses.
- Exclusive loan offers.
- Discounted loan-processing fees.
When more of your customers are repeat buyers, this can lower overall acquisition costs. You can likewise track the default rates of existing customers and better-manage risk.
Naturally happy borrowers often become cheerleaders for your brand. They refer family and friends, and organically grow your base.
Measuring Lending Marketing Success
Data takes you farther. Understanding, calculating, and tracking the right metrics and key performance indicators (KPIs) is at the heart of a successful lending marketing execution.
Ultimately, KPIs help you determine the growth of your business toward your end goals.
The KPI universe is also vast. As you start to engage this data set, research the metrics that have the most relevance to your lending brand, such as:
- Loan approval rates.
- Loan default rates.
- Website traffic.
- Acquisition costs.
- Conversion rates.
From enhancing your ROI, to optimizing operations, to tracking customer satisfaction, KPIs are critical in shaping informed financial decisions and protecting the long-term health of the company.
Make Data a Trusted Partner
Like spokes on a wheel, the wealth of lending marketing channels work in concert and deliver tremendous opportunity.
The key is a thorough understanding of who you’re after, what they need, how to get their attention, and how to bring them closer to conversion in each unique channel environment.
The correct channel-and-data analysis can also bring surprises. When lenders understand how people earn money in various forms, from full-time jobs to contract work, they can tap hidden opportunities in new segments.
All you need is the right partner to give you that information. Bankuity’s advanced banking verification (ABV) technology gives all the data you need—and more.
You can leverage it to make the best-informed decisions about your borrowers, including how you target your lending marketing strategies.
Schedule a demo today, and find out how data can transform your business.
