Episode 9 - Make Your CEO Smile by Converting Indirect Customers

Podcast Episode 9: The FI GROW team discusses how to convert indirect members or customers to larger relationships and what kind of messaging to use.

Transcription:

Have you ever been talking about something that's really useful and thought, "That's a great idea, let's hit record so we can share this with everyone?” If you're looking for best practices for your bank or credit union, join us while we talk all things sales, marketing, and strategy for financial institutions. Let's make it happen with FI GROW Solutions.

Meredith Olmstead:

Hi, there I'm Meredith Olmsted, Founder and CEO of FI GROW Solutions. And I am here with Penne VanderBush.

Penne VanderBush:

Hey.

Meredith Olmstead:

Penne is our Chief Strategy Officer, and we were just having a really great conversation about how to convert indirect members or customers to larger relationships, and to really understand how to grow a relationship with an indirect member or customer. And we thought it would be a great conversation for us to hit record on and talk a little bit more about. So Penne, really quickly, what do I mean by indirect members and what are indirect members even like?

Penne VanderBush:

Yeah, so when we think of in direct members, these are members who are joining a credit union, they could be indirect customers if you are a community bank, but they're joining from a dealership. And so it's kind of unique because we actually have clients who have indirect members, who are not only joining from auto dealerships, which I think is the go-to when we talk about indirect, everyone thinks about auto, and there is a lot of volume there. But we also have clients who have members joining from an RV dealership or a pool dealership, if that's what you call the pool places. So they're going to get a pool and they need financing. So times indirect members are not just coming from auto dealerships necessarily, but they could be coming from these other places where they're making very large purchases.

Meredith Olmstead:

Yeah.

Penne VanderBush:

And the institution is available as an option for financing.

Meredith Olmstead:

Gotcha. And so they're not your typical new customer, right?

Penne VanderBush:

Correct.

Meredith Olmstead:

I mean, they're rate shoppers and they tend to have multiple relationships with various financial institutions because they want the best price for whatever loan they're in the market for. They're at a point of sale situation, where they're picking a financial institution based on rate quotes. And so is it realistic to try to drive a primary financial institution relationship with those kinds of customers?

Penne VanderBush:

So I don't believe that it is, and the work that we've done with our clients has proven, that if someone's willing to go to this point of sale, a dealership or otherwise, and develop a relationship with a lending institution of any sorts based off of the rate that they got out of the payment that they've gotten, then they're not the type of person who you are likely going to be able to develop that primary financial institution, that PFI relationship with. And so we don't recommend to our clients that they try that. And what we do have is very effective onboarding programs for indirect members. So we'll run a direct member onboarding program. Those programs are typically longer, 90 days plus, in an onboarding program for a direct member.

Penne VanderBush:

These indirect members, we run in separate onboarding programs, with a completely different approach, and the program lasts about 30 days because we know that that's about all the time that you're going to have their attention to really even introduce who you are. They may not even realize that they've just joined a credit union, and then to be able to onboard them to deepen the relationship a little bit. So we run much shorter onboarding programs with very different goals for these members.

Meredith Olmstead:

Yeah. We actually have a case study on our website about one of the offers that we include for an indirect onboarding, and it's a pre-approved credit card offer. So basically the idea is that if you have somebody who's just bought a car through an indirect loan, through a dealership, you have a recent credit pull on them, and why not pre-approved them for a small line of credit, a credit card, with a small line of credit on it, because you know that they just qualified for a car loan. So more than likely, they're going to hit your metrics that are necessary to qualify for a small credit card. And we've seen great results in that. We do have a case study on the pre-approvals for credit cards. Are there other pre-approved kinds of offers, Penne, that you have seen work for indirect onboarding?

Penne VanderBush:

Yeah. So I think the key word here that we need to make sure that we're pointing out is we are saying pre-approved, we're not saying pre-qualified, this isn't an offer to reapply for something else, we're truly saying pre-approve them. You have that credit report, you just authorized a loan for them, you should be comfortable pre approving them for a small amount. So we do have a client that we run a different offer for, and this is for personal loans. And this offer will go out to members who are indirect through auto or indirect through that pool loan program. And it's a great offer because a lot of the times, someone's just spent the money in their pool, you could speak with them about, they might need a patio set or an outdoor furniture set, or the pool comes with all these other things that they might need.

Meredith Olmstead:

Accessories, yeah.

Penne VanderBush:

Yeah. And so we're pre-approving, in that program, one of the programs is running at $2,500, there's a different program at $4,500. And in those offers, we also give the ability to request more. So the messaging is that you're pre-approved for $2,500, but if you'd like more, let us know. And no matter which of those CTAs that they're clicking on in that email, those call to actions are going to landing pages with very simple forms. So if somebody's accepting the loan offer, it's a very easy, simple form, a few form fields saying, "Yep, I'll accept it." That goes right into the lending department. And they're able to issue that loan very quickly for them.

Meredith Olmstead:

Yeah.

Penne VanderBush:

So we're seeing some great metrics on these programs as well.

Meredith Olmstead:

Yeah. I've seen, overall, in general, really low bounce rates on these offer landing pages, and higher than average, longer than average time on page. So what this basically does is tell Google, "Hey, this landing page, this website that's housing this landing page has a good quality offer. People are spending time on the page, they're spending time looking other pages on the website as well. And so this is really good for driving future organic traffic to the website." But besides that, we are talking about making your CEO smile, when we talk about converting indirect members or customers. So do you have any stats on how the one program that you were talking about is really working?

Penne VanderBush:

Yeah, so this program is a newer program, it's run about six weeks. We have seen about $50,000 in additional loan volume come in so far through that program. And we're also keeping an eye on the email metrics in that onboarding program. And we know that we'll see average click-through rates on the first email, 14%, and the second email will be about 10%, third email, a little bit lower, that fourth email, we see a significant drop off in the click-through rate. This goes back to the timing and the frequency. You have to move quickly with these indirect folks. They are rate shoppers, and you want that credit report while it's fresh, make that offer quickly. But these programs really are super short, a month or less of total time.

Meredith Olmstead:

Okay.

Penne VanderBush:

Four emails or less, and then we do see that drop off. So you need to act quickly, but we definitely see success in deepening the relationship by offering that pre-approved loan offer. So that at least those indirect members have two loan products with you.

Meredith Olmstead:

Yeah.

Penne VanderBush:

And I think that's really about what you could expect or deem to be a success with indirect members.

Meredith Olmstead:

Yeah, I agree. Okay, great. Well, great stuff. I'm so glad that we hit record on this conversation. If you all are interested in more, do visit our website figrow.com, and check out that case study on Mutual Security's, indirect onboarding that we did. For that, so then we also have some really great online courses. If you go to our FI GROWTH Academy. And some of that is related to what we're talking about with email marketing and pay-per-click, so driving some traffic to some of these offers potentially. And let's go Make it Happen, and we will be hitting record again soon.