3 minutes
Credit unions can do more to welcome and then meet the longer-term expectations of members who join for indirect and direct car loans.
Sponsored by SWBC
We’ve all seen the reports, studies and polls—right now auto loan growth is the North Star setting the direction for growth at many credit unions. But how many financial institutions are thinking beyond the positive loan growth to capturing new members' loyalty?
The National Credit Union Administration noted that in the second quarter of 2017, median membership growth was negative in 23 states, which represented 50 percent of all federally insured credit unions. So if members are coveted by institutions, why aren’t credit unions doing more to welcome new members they’ve gained through indirect and direct lending? And how can credit unions position themselves accordingly to meet customer expectations?
Let’s answer these questions one at a time and see if we can discover some takeaways for your credit union to consider implementing in today’s fast-paced auto lending industry.
Welcoming New Members, Personally
The influx of new members through indirect and direct lending strategies is an opportunity to earn continued business from these members who might be new to credit unions all together. For a 2016 PricewaterhouseCoopers report, a focus group asked participants to identify areas of improvement during the auto loan financing process. A common concern was that once a borrower received the keys to the vehicle, little to no personalized follow up was conducted by the financial institution.
Personalization has become a proven method for increasing brand loyalty. Creating and implementing a simple, post-purchase onboarding process can help new borrowers feel welcome and appreciated. If a borrower has had the quintessential dealership experience, anything to help reinforce they’ve made a good purchase—if nothing else that they’ve selected a great lender—will go a long way. Remember, it’s the little details that will help create loyalty beyond the auto loan.
Meeting Customer Expectations
Once you’ve built some trust with these borrowers, they’ve chosen your credit union as their lender, and you’ve personalized onboarding communication with them, you’re ready to grow the relationship. This is your credit union’s opportunity to begin introducing other personalized services for your new borrowers.
For example, you can encourage them to purchase a major mechanical repair policy to cover any potential vehicle repairs they may have down the road, offer to give them an auto insurance quote if your credit union offers insurance in house, and educate them on the importance of payment protection plans that could protect their investment and credit score should they ever become unable to make their payments.
Establishing a relationship with a customer who may never walk into a physical branch takes time to grow and evolve. However, the first step is to recognize the need to nurture the relationship from the beginning, regardless of the loan’s direct or indirect origination.
Indeed, building a relationship with potential new members can start—digitally—even before an auto loan is issued. Ensure your credit union has educational resources available online and can be easily found by search engines. As they do with any large purchase, potential members go online to research vehicles and loan options. Consider having blog posts, infographics, or “how to” videos available on your website to build trust with a potential borrower right from the start.
John DeLuccia is account VP/financial institutions group for CUES Supplier member SWBC, San Antonio, Texas. Discover how the auto lending industry is evolving with SWBC’s new ebook, free with registration, 2018: State of Auto Lending.
Read more about auto lending in “Overcoming Roadblocks to Drive 2018 Sales” and “Loan Zone: Auto Loan Compliance.”
If you liked this post you might like attending CUES School of Consumer Lending™ and CUES Advanced School of Consumer Lending™.
