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Auto re-fi loans can lead to additional revenue down the road.

I’m one of the lucky few who, at the moment, doesn’t have a car payment.  And when I say “few,” I really mean it. Just how many auto loans are out there these days? A lot… 113 million, by recent estimates. To give you an idea of the dollars involved, at the end of the fourth quarter of 2019, TransUnion estimated that Americans were carrying a total of $1.3 trillion in auto loan debt with the average auto borrower carrying a balance of roughly $18,500.

If I were making monthly payments on a car loan that was somewhere between 2 and 5 years old, I’d probably be looking to take advantage of historically low interest rates and refinance that loan right now. If I were a banker, and I was looking to bring new customers to my bank or new members to my credit union, I would probably be looking to use auto refinancing as a way to do that.

Unfortunately, now is the perfect time to market auto loan refinancing.  I say unfortunately because there is good news and bad news; together, they are making this a good time to refinance an auto loan. On the one hand – as you can see from the chart below, courtesy of Statista – there’s good news; rates are ideal for an auto loan re-fi right now. 

On the other hand, there’s bad news; Americans continue to face uncertain times due to COVID-19.  The pandemic has not abated and, as a result, the economy continues to take baby steps toward recovery, with tens of millions of Americans trying to find some kind of economic relief.  Saving just $100 each month by reducing their car payment would provide some of that relief.

While no one seems certain about the future of rates, one thing we know that we can all bank on; if you borrowed money a year or so ago to buy a car, you’re very likely paying more than you could be. Which brings me to why financial institutions should be marketing their low-interest auto loans to those who borrowed within the last two to five years. First, as you well know, it’s not easy to get someone to leave their financial institution and take their business elsewhere. Attracting new customers to your institution is hard work, and it can be costly. According to Bain & Company researchacquiring a new customer can cost five times more than retaining an existing customer. ”In financial services, for example,” the study says, “a 5% increase in customer retention produces more than a 25% increase in profit. Why? Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline. The success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is 5-20%.”

In order to make is easy for banks and credit unions to get their auto loan refinancing message out there, we’ve created a campaign of ads, both print and digital that can be customized quickly and easily.

Now’s the time to attract new customers and members.  Borrowers are turning to online lenders such as Lending Tree and Credit Karma for the ease and convenience they offer.  But you can offer them something more; not only competitive rates, but the personalized service that can, potentially, help you attract customers and members for life.

About Bank Marketing Center

Here at BankMarketingCenter.comour goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and with them, your brand. To view our marketing creative, both print and digital – ranging from product and brand ads to in-branch brochures and signage –  visit bankmarketingcenter.com.  Or you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.

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A Random Act of Kindness Goes a Long Way.

[H/T: Uproxx, photo via Reddit] 

[Photo via Reddit]

Never has pouring a beer engendered so much media hype. Of course, I’m talking about the press around Dave Grohl of the Foo Fighters pouring a fan a beer while on stage at a Foo Fighters concert a while back. What does pouring a beer have to do with banking?

Granted, you can’t – at least in your official capacity as their banker – buy a customer a beer. (What you do on your own time is your business!) But you can show the equivalent amount of understanding and compassion in other ways. 

What if you took advantage of SMS (Short Message Service) capabilities/opportunities and simply texted your customers every now and then?  Simple messages that, for instance, ask: “How are we doing?” or, better still, “Is there anything we can do for you?”  Offering a compliment or offering assistance seem like simple propositions. How hard is it?  Well, unfortunately, many find it remarkably hard.  When was the last time someone told you something, or asked you something, that actually made you feel good?  Rare even in the best of times and now, with a pandemic that has isolated us, rarer still.

It’s a known fact, yet often ignored, that a little caring goes a long way. And folks need it now more than ever. According to apnews, “the coronavirus pandemic has put millions of Americans out of work, but even many of those still working are fearful, distressed and stretched thin. A quarter of U.S. workers say they have even considered quitting their jobs as worries related to the pandemic weigh on them.”

In their recent article, Delivering Trust with Empathy – Where Next for Financial Brands, brandingmag.com tells us that “consumers engage with brands that understand their lifestyle and life stage. Financial brands really need to understand what matters to their customers…”

True. Importantly though, however, financial institutions need to do more than that. “Understanding customers” means more than simply offering products or services that happen to coincide well with a customer’s needs at that particular moment in their buyer journey. It’s almost like saying, “hey, we’re not here to sell you anything.  We just want to know how you are.”  Sounds odd, doesn’t it? That’s because, unfortunately, people seldom take the time to offer their appreciation or understanding.  While it might be a case of feeling it, but not expressing it because it can be uncomfortable, the result is the same; it doesn’t get said.

Grohl didn’t have to offer that fan a beer.  After all, the guy was already a fan, already in the audience and had, obviously, already purchased a ticket to be there. No sell was necessary. It was simply a completely selfless gesture.  And that’s what makes it all the more powerful.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and with them, your brand.

To view our marketing creative, both print and digital – ranging from product and brand ads to in-branch brochures and signage –  visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.