Having a large customer base is the goal of every business. Not only is it one of the pillars of growth, it also allows a lender to diversify their revenue base. A solid customer base is a sign of a healthy business and the quarter on quarter growth is a metric that every smart investor peers at with eagle eyes.

But like every start up would tell you, growing the customer base is a very tough task but not impossible. 

To grow your customer base, you must note that in trying to acquire new customers, you must also direct efforts towards retaining the customers you already have. There’s little reward in chasing after new customers, whilst the ones you already managed to get are running out on you faster than you can catch your breath. Whatever made the existing customers to run will definitely chase away the new ones.

To achieve profitable and sustainable growth of your lending business, both customer acquisition and customer retention strategies must be adopted. In fact, smart investors measure the quality of a lender by looking at the number of repeat customers because most lenders only make real money from existing customers taking on new loans. 

Customer acquisition and customer retention as a lender

Customer acquisition describes the process of getting new borrowers to take a loan from you. It covers all the activities you undertake to get people who have never signed up with your business or taken a loan from you to do so. This is usually tied to your marketing strategy and involves a great deal of advertising. 

Alternatively, customer retention speaks to your ability to get your current customers to keep taking loans from you (and repaying of course) and not turn to your competitors instead. There’s a lot of brand building and customer loyalty strategies involved with nurturing these customer relationships.

Marketing can cost a small fortune and there are absolutely no guarantees. Acquiring a new customer can cost up to five times what it costs to keep an existing one. Remember that these are people who have never taken a loan from you before; the goal of marketing is to convince them that they should apply for a loan from you rather than the next lender. It’ll take more to convince a borrower who’s not even sure if you’re a <responsible lender> or a loan shark than to convince Ms. B who has already taken and repaid three loans from you to take a fourth one. You have to really sell yourself. Pull out the big guns on marketing. And they don’t come cheap. 

The probability of getting a borrower who has already taken a loan from you (and loved it) to apply again is very high. Even if they didn’t have the best experience the last time, they are more likely to give you another chance to win them over again. Increasing your retention can increase your profitability exponentially. Additionally, existing borrowers are also more likely to try a new loan product or new feature you release because of their established relationship with you and familiarity with your brand.

How to successfully grow your customer base as a lender

The benefits associated with retaining existing borrowers don’t strike out the importance of converting new borrowers. We’re simply saying, do both. In this case, it’s possible to eat your cake and have it. Here are some of the ways you can successfully expand your customer base:

Synergize sales and marketing 

There’s a need to ensure coordination between the sales and marketing functions. The rationale behind this is that all marketing activities are geared toward getting people to buy your product. All roads lead to sales in this case. You can develop a marketing strategy, identify your target market, create content that reflects their intent, define the best channels for delivery and execute in the best way to connect with your target audience.

Social Media

Social media platforms have connected our world in ways that we probably thought to be impossible a decade ago. As a lender, you must also leverage social media as a marketing tool as a way to reach your borrowers, establish your credibility as a lender through your brand and most importantly, to convince borrowers to get their loans from you. However, this should be done with caution. The focus on messages about loans on social media is now negative when you are perceived as a loan shark. Google and Facebook no longer allow the promotion of loans less than 90 days or with interest rates of more than 3% per month.

You have to do your research on how these algorithms work, the best times to post, the kind of content to post and promote (social media ads) and how to attract the most eyeballs to your business. Remember you’re not trying to become an influencer for the fun of it. You’re trying to drive conversions. 

Provide superior customer support

As we said earlier, the relationship between lenders and borrowers can go south fast because money is involved. But it’s still possible to deliver A grade customer service. Read more about how you can differentiate your lending business through customer experience. You can also increase the effectiveness and efficiency of your customer support team with the customer management system from Freshworks on Lendsqr’s platform

Address customers’ pain points through product improvement 

A ‘personal touch’ in business doesn’t get much more personal than this. Imagine the joy your customers will feel when they see the complaints and suggestions they made to you translate to a fix or new product feature? You’ve won their hearts and their wallets. This must be done within reason, of course. It’s neither possible nor sustainable to change your product to the cacophony of thousands of borrowers all clamoring for one thing or the other.

Customer referrals

You know you’ve hit a gold mine when borrowers begin to tell others about you. Customer referrals cost you nothing with the possibility of gaining everything. This is the most organic way to grow your customer base. Keep your borrowers happy and they’ll spread the cheer. Free of charge. 

Give this an extra kick and reward your customers for doing this. You can include a referral feature with a unique link which they can share with friends and family to earn something. It could be an interest-free loan the next time they apply; a little extra money deposited in their wallet for every referral that becomes a new customer, etc.

Grow your customer base on Lendsqr

The best way to ensure borrowers keep coming back is to give them a great borrowing experience. Sign up for free and do just that on Lendsqr. Access a robust and extensively configurable loan decision engine, up to $10,000 credit to use on one of the top customer support platforms and a customer referral system already in-built on the platform.

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