How to Improve Customer Retention with Intent Signals

Jun. 17, 2022

8 Minutes

In the hyper-competitive credit landscape, improving customer retention is critical for financial institutions’ long-term stability and growth. Consumers have more options for consumer credit products—and more ways to search for them—than ever before.

Spurred by the “Great Acceleration” of advancements in digital customer experience since 2020, consumer expectations and purchase habits are changing quickly—even for financial products like HELOCs and auto loans. Customers expect the same degree of searchability, variety and ease from their bank that they find when doing business with other sectors, like retail. At the same time, increased competition from the boom of fintechs and other alternative lenders entering the marketplace over the past 10-15 years has put once-reliable customer relationships back in play.

This has all made customer loyalty harder to come by than in the past. There is simply too much competition on every customer value metric—from rate and term, to service and experience (and more often than not, a combination of both).

Why is customer retention important?

Financial marketing is often focused on new customer acquisition (a significant factor in growth). But retaining and growing the business you already have is just as critical.

In the same way that lead nurture paths are part of new customer acquisition tactics, customer nurture is critical to retention tactics. You can’t sit back and wait for your customers to come to you when they have needs. Succeeding in this market means actively—and continually—courting your own customers.

For loan marketers focused on how to improve customer retention, one of the best ways to do this is by using signals.

What are customer buying signals?

Intent signals (a.k.a. triggers) are pieces of information consumers and businesses create through their everyday actions that indicate they are potential customers. Knowing what signals to watch for, and what to do with that information, is the core of any customer loyalty and retention program.

By using intent signals, loan marketers can reach out before competitors to win new business and improve customer loyalty and retention. Signals help you accomplish both — and pairing signals with Deluxe tools for acquisition, onboarding, engagement, and customer retention marketing can help you lay a foundation for a comprehensive marketing strategy.

Video Transcript

I think one of the most important things that our Lenders can do if they have a credit sugar program is use an omnichannel strategy. First, you really want speed to market. It's so, so important, and especially if you're monitoring your own customers, they're expecting to hear from you. If the last time you reached out to them was to wish them a happy birthday or maybe wish them a 4th of July party, right? You want to be back in front of them to remind them of what you can do for them. The timing is super crucial. We recommend reaching out with email because it gets there really fast. You can also employ a telemarketing strategy that's always effective again for your customers. They're expecting to hear from you. They're much more likely to pick up the phone. And then finally, you don't want to forget about direct mail. Direct mail really is the workhorse of the industry. It may get there last, but it really does have that response. Power and the staying power. It's a physical piece of paper that people have, and maybe, you know, the kids pick up the mail or something, but the wife or husband person is going to action. That item still sees it versus some of the other channels that aren't as permanent. Really, when you work them all together, that's when we see the greatest results. There are a couple of things that make deluxe trigger program unique, so are in the market alerts program first monitors, all three bureaus. That's something that you really need. So that you get the complete picture of who's in the market. You want to make sure you're capturing all people who are applying. So three credit bureaus is a must. And then automation is key. When you think about all the components to a daily program, you've got your monitoring file, your credit criteria, you've got the three different files from the bureaus, you've also got the vendors that this is going to. It's a lot to manage, so it has to be automated at Deluxe. It's automated from start to finish. It really is. Set it and forget it. We have a talented team that helps you set up your program and then make sure it runs seamlessly day after day.

Customer buying signals typically fall into one of three categories:

Behavior-based signals. Either explicit behaviors, like hard credit inquiries and online searches that signal intent to purchase, or subtle behaviors like filing a change of address form.
Event-based signals. For example, an auto lease expiring, an adjustable mortgage rate resetting, or a child heading to college.
Passive signals. Passive signals the consumer may not even recognize, like debt that’s ripe for consolidation or a higher-than-average mortgage rate.

Three ways to use intent signals to improve customer retention

Marketing signals are a powerful way to target account holders and keep them on board. With the right tools in place, you can monitor the behaviors that indicate a need or intent to buy, screen against your current customer list and lending criteria, and proactively reach out with relevant offers before your competitors win their business.

1. Easily identify at-risk customers

Account holders who don’t use services like direct deposit, online bill pay and debit card transactions are more likely to let their accounts go dormant, which is sometimes called "silent attrition.” Tracking the signals generated by the absence of these behaviors can help you identify customers who aren’t fully engaged and target them with relevant communications to encourage them to use your financial institution for these services. Fully engaged customers are not only less likely to leave you, they’re more likely to open a credit card, brokerage, mortgage and other additional accounts.

Of course, the best way to avoid silent attrition is to engage customers right away, when they’re new to you. Successful onboarding ensures a higher rate of conversion from new customer to fully engaged account holder.

2. Reengage with customers shopping competitors

With the availability of marketing signals, including hard credit inquiries, there’s no longer a good excuse to watch an account holder walk out the door without putting an offer in front of them. A hard credit inquiry is a surefire intent signal that someone is actively looking for a car, a house, or some other purchase that requires financing.

Knowing they’re in the market for a loan can help you head off defection by quickly getting in front of them. However, lenders who monitor only one or two bureaus can miss hard inquiries. Among Deluxe’s own clients, we have found that the lift in performance when you add a second bureau doubles when you monitor a third—and that’s true for both prescreen and trigger campaigns.

In addition to tri-bureau monitoring, make sure you’re also matching loan inquiries against your customer database to identify account holders who might be shopping the competition.

3. Extend the right offer, at the right time

Banks are in a prime position to market additional products to their existing customers, something most non-bank fintech lenders cannot do. But even the most engaged account holder will only take further action if the offers they receive from you are tailored to their needs.

Scouting for signals helps you extend a relevant offer when your customers are more likely to purchase and, if you desire, even make a firm offer of credit. Signals like hard inquiries, which show an intent to buy, are the strongest indicator. But other, less obvious signals — like a consumer’s income rising into a more desirable credit bracket, an online search, a mortgage rate increase, or paying off debt—can also be predictors of a financial need. So can milestones like getting married, buying a new home, or having a baby.

Effective customer retention marketing uses partners

If you don’t have the internal capabilities to monitor multiple credit bureaus, check signals against your customer database, and operate ongoing retention campaigns, it might be time to outsource these tasks to an external data provider.

However, not all data partners are created equal. When you need to defend, and deepen, existing customer relationships, a great option is to partner with a full-service supplier—like Deluxe Data-Driven Marketing—that can provide customer data and strategic recommendations for accomplishing your exact business needs.

EVENT-BASED TRIGGERS