The world was pushed online last year, and there’s a reason businesses are staying there. As millennials and Gen Z position themselves to obtain
Borrowers are getting this more digital, convenient experience from direct-to-consumer lenders. To remain competitive, retail lenders must become competitive in the DTC space. Here are three actions you can take to stay relevant and successful.
1. Tailor communications to the channel
The DTC borrower experience is vastly different from the retail experience. The way lenders communicate with DTC borrowers, therefore, should also be different.
Sending the right message to the right customer at the right time is key to tailoring communications to the borrower’s preferred channel.
In the retail world, most consumers have met face to face with their lender and, in some cases, even have a direct personal relationship. Having this familiarity makes interactions easier to manage and increases the likelihood of a quick response.
By contrast, in the DTC world, the lender and consumer have never met and most likely have only had one or two light conversations through the phone.
In order to build a strong relationship with a DTC borrower, lenders need to show they care by communicating on the consumer’s terms with a personalized touch. Since they are likely not in the same market as the consumer, they need to leverage their ability to deliver value by drawing from research to tailor advice.
The lender must make sure every marketing communication is aligned with where the customer is in their journey. This could look like adding a personal touch to emails and text messages by making sure they come from a person and not the company or delivering actionable and informed content by leveraging your existing consumer data.
2. Embrace first to connect in addition to first to contact
More than
And according to JD Power, retail lenders “significantly outperformed fintechs in putting the customer first.”
As retail lenders expand in the DTC space, one key differentiator they offer is their ability to build relationships.
The imperative, then, is not just ensuring DTC borrowers have a smooth application, but also that loan officers are connecting with them just as they would with borrowers on other channels. By doing this, loan originators position themselves to serve the customer again and again throughout the lifetime of their loan, as their needs change.
3. Follow the market
The refinance boom will come to an end … someday. While rates are still at record lows and many lenders are focused on the easy to capture refinance, the first-time homebuyer demographic continues to show increased opportunity.
In 2020 alone,
There are also significant opportunities to delight existing homeowners. Lenders have taken the time to collect meaningful data on their consumers and can easily leverage that information to show consumers how they could save money by refinancing with current rates, or take advantage of additional equity as their property values change and they pay down their original loan.
This is the benefit of cultivating relationships with borrowers. By establishing a meaningful connection, you’re able to find ways to excite everyone involved.
Relationships still reign, so get the right tech to build them online
In spite of the world going increasingly digital, it is clear that human connections are still a priority for consumers. This means retail lenders must merge the warmth of personal connections with the convenience and ease of digital lending.
To this end, transactions that take place on digital platforms should not feel isolating, especially when borrowers are making one of the biggest decisions in their lives, such as buying a home.
The good news is that retail lenders have already mastered the most difficult part of this: cultivating personal connections. The only thing limiting your ability to cultivate strong human connections online is your team’s technology and how you use it. If you haven’t yet, now is the time to level up your tech stack.
