Elevating Customer-Centric Communications

Lenders are increasingly turning to text communication as a powerful tool to enhance their customer journey. During the “Customer Best Practices” panel at SBT’s FinText 2023 customer conference, experts delved into the unique challenges and success stories of real lending customers.

Compliance Comes First

Lenders must make compliance the central focus of their communication strategy. Reg F and other industry mandates govern the way lenders can communicate with their customers, making compliance a non-negotiable priority. Throughout the customer journey, from initial outreach to the completion of a loan, compliance should be the forefront of every lender’s strategy. The consequences of non-compliance can be severe, resulting in legal penalties, damaged reputations, and erosion of customer trust. Lenders who integrate SMS into their communication strategy often do so with a dual commitment: driving operational efficiency and maintaining full compliance. By leveraging pre-approved messaging templates and standardized communication practices, lenders can ensure that every text message meets regulatory standards. This approach not only safeguards the lender from legal risks but also demonstrates a commitment to ethical and responsible lending practices.

Make Member Experience a Top Priority

Text can play a crucial role in enhancing member engagement and satisfaction. It offers a direct and immediate means of communication, to ensure borrowers feel supported throughout their lending journey. When customers have a seamless, satisfying, and efficient journey with a lender, they are more likely to remain loyal and engage in repeat business. Happy and loyal customers are more inclined to seek out additional financial products or services from a lender they trust. A positive member experience benefits both the borrower and the lending institution.

Partner with a Trusted Vendor

Selecting the right partner for your texting needs is a critical component to achieving success. Rafe Dunlap, VP of Collections Strategy at LendingClub (SBT customer), aptly states his texting best practice as, “Choose the right partner.” This choice directly impacts your messages deliverability, compliance standing, and overall ROI for the texting channel. Just as compliance, consent, and tailored messaging are vital best practices, choosing a trusted  and reliable partner ensures that your SMS strategy will be successful and yield long term benefits.

Focus on Reengagement

Text messaging offers a highly effective channel for re-engaging customers who may have abandoned their loan applications. With the immediacy and convenience of text communication, lenders can send timely reminders and updates to applicants, encouraging them to return to the application process. This proactive outreach not only helps in rekindling the interest of potential borrowers but also expedites the loan approval process, leading to a more streamlined and efficient experience. This customer-centric approach not only improves the chances of converting leads into borrowers, but also fosters an ongoing line of communication between lender and borrower, which can be invaluable in a competitive lending landscape.

Avoid Passive Opt-Ins

Lenders have traditionally depended on passive opt-ins from customers, which can limit the reach and engagement potential of their messaging campaigns. Opt-ins, or communication consent, received from consumers after they have entered your funnel are considered passive, as they cannot target new or potential borrowers. With the implementation of more proactive texting strategies, lending organizations can significantly expand their subscriber network and extend their reach throughout the entire customer journey. By adopting a proactive approach to opt-ins, lenders gain the ability to connect with potential borrowers at various critical stages within the customer journey. This includes reaching out to prospects who have shown interest but haven’t initiated an application, engaging with applicants who have started the loan process but not completed it, and providing updates and assistance to those during the application and approval stages. Proactively communicating with individuals at each of these touch points allows lenders to create a smoother and more efficient lending process. It also enables them to nurture and guide potential borrowers along the entire funnel, increasing the likelihood of conversion. A proactive opt-in approach allows lenders to engage with their audience, making it more dynamic and responsive to individual needs, thereby improving customer satisfaction, loyalty, and, ultimately, loan acquisition.

Measure What Matters

A successful messaging strategy relies on continuously analyzing your communications to measure effectiveness and ROI. Key KPIs Include:

1. 1. 1. 1. 1. Opt-ins and Opt-out Rates: Monitoring the number of customers opting in and out of SMS communication is crucial. A higher opt-in rate reflects an engaged audience, while an excessive opt-out rate might indicate the need for refining your content or frequency.
            2. Deliverability: Ensure that your messages are successfully reaching their intended recipients. A high deliverability rate ensures that your messages are not being blocked or filtered by carriers or devices.
            3. Click-Through Rates (CTR): If your text message contains links to important information or actions, CTR measures how many recipients are taking the desired action. This can be particularly valuable for tracking conversions or guiding customers through a specific process.
            4. Timing and Day of Sends: Analyzing the timing and day of your text sends can help you identify when your audience is most responsive. This data can inform when you schedule messages for maximum impact.
            5. Variety of Message Content: Keeping an eye on the types of messages that resonate with your audience is essential. Different content styles (e.g., promotional offers, informational updates, personalized messages) may perform differently, and understanding these preferences can guide your content strategy.

To inform a successful text messaging strategy, it’s crucial for lenders to consistently monitor these metrics and adapt their approach accordingly. Regular analysis allows you to refine your messaging strategy, optimize the content to better suit customer preferences, and maximize the efficiency of your communication efforts.

Harness the Power of Omnichannel

Incorporating text communication into an omnichannel strategy enables lenders to not only meet customers where they prefer to engage but also ensures that vital messages are delivered promptly and in a manner that resonates with borrowers. The adaptability and effectiveness of text messaging within an omnichannel approach make it the optimal choice for lenders seeking to enhance their customer engagement and overall communication strategies.

Learn how SBT’s solutions can aid in your lending efforts. Schedule a meeting today.