Anchoring Your Customer
How engaged are you with your customer?
Retail lending, of late has seen a tremendous increase in competition, aided by a fast increasing customer base and demand. As an upshot of this phenomenon, one sees a plethora of retail lending products and product variants that are available in the market. Every single customer represents a certain revenue opportunity to the organization. An entity today can offer multiple services to a single customer or can offer the same service again and again. With every instance of service that is offered to a customer, the organization stands a chance to earn a certain revenue. And if the customer base is large, there is an opportunity for the organization to create an ongoing revenue stream through offers of various products and services. However, for this to happen it is absolutely essential that the customer stays with the organization and does not shift his / her affiliation to a competitor.
Speaking of retail lending, any organization involved in direct lending or distribution of lending products, can offer to its customer various products and services….some are given below:
- Loan for home purchase
- Unsecured business or personal loan
- Home Improvement Loan
- Loan against property / debt consolidation
- Top Up Loans (add-on cash out loans to the customers)
- Retail Deposit products
A customer would not avail all these products and services at the same time. His requirements for would evolve at different points in time. The organization should be able to connect with the customer at the right time, i.e. when customer’s requirement for the product / service shows up.
In this article, we examine some methods in which organizations can work their way towards deepening their customer relationships and maximizing the revenue opportunity from each customer.
- Customer Referrals: Ask your customer to refer their friends / relatives to avail your product / service and pay them a certain amount for successful referrals. This has been one of the most popular methods of customer engagement that many organizations have used and succeeded. This method has been more popular outside of financial services, but there is no reason as to why this should not work for financial services, especially lending products. Who knows? You could end up creating a good sourcing associate or two.
- Customer Contests for service improvements: Invite your customers to participate in contests to provide suggestions for service improvements. As a customer, he / she would have experienced your service and would be well-placed to suggest improvements. Some criticisms might also come, but then that is the best part. When someone gives you a negative feedback there lies a spending opportunity for you to take a hard look and see how you can improve that piece of product / service. How about a ‘Customer of the Month’ award?
- Draw customers to your website: Having an active website can provide many opportunities to engage with your customers. Find ways to get your customer to visit your website often. Banks that have been successful in promoting internet banking have also been successful in doing cross sell of products to their customers. Internet banking works very well for loan customers as well. Showcase other product offers / services / contests in the website and invite customers to choose / participate.
- Monthly newsletters (emailers): Work on engaging content and create monthly newsletters that reach your customers on their inboxes. Good quality content does not necessarily have only to do with finance. If you can find something, say in education that can be useful to the children of your customers, it will surely find acceptance. For example an article on available career options for select subject streams would be exciting and would be found useful. Ideas for interior designs, articles on better use of space etc. would be found interesting.
There could be many other low-cost ways of engaging with your customers that you can think of. But it is vital that every lending organization keeps an eye on this aspect of their business. For if the customer is not engaged with intensely, it is only a matter of time that the revenue opportunity represented by the customer, slips out of hand.