3 ways to use signals for customer retention

Consumers have more options — and more ways to search for them — than ever before. While this was once reserved for consumable products like a smartwatch player or a new pair of shoes, consumers are exploring financial products, such as HELOCs and auto loans, in new ways. Thanks to many of the alternative lenders in the market, you can’t just sit back and wait for people to come to you. To succeed in this market, you must know when they are shopping, find them, and put a relevant offer in front of them before they sign on the line. The best way to do this is by using signals.

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.

What is a signal?

Signals are pieces of information consumers and businesses create through their everyday actions that indicate they are potential customers. They typically fall into one of three categories:

• Behavior-based: 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: For example, an auto lease expiring, an adjustable mortgage rate resetting, or a child heading to college.
• Predictive: Passive signals the consumer may not even recognize, like debt that’s ripe for consolidation or a higher-than-average mortgage rate.

1. 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. The combination of well-designed onboarding program from Deluxe Marketing Services and an online, self-service account switching tool, like SwitchAgent, that integrates with your online banking environment, can help you create a fully customized onboarding path.

2. Spot customers who are shopping at your 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 sure-fire signal that someone is actively looking for a car, a house, or some other purchase that requires financing.

However, lenders who monitor only one or two bureaus can miss hard inquiries. Monitoring all three bureaus provides a 75 percent lift over referencing just a single bureau and even a 45 percent lift over monitoring two bureaus.

Deluxe's In-the-Market Alerts solution monitors all three credit bureaus and matches loan inquiries against your customer database to identify account holders who might be shopping the competition. Knowing they’re in the market for a loan can help you head off defection by quickly getting in front of them with a relevant offer.

3. Extend the right offer at the right time

Financial institutions are in a prime position to market additional products to their existing customers, something FinTech lenders cannot do. Yet 66 percent of engaged account holders indicate they aren't satisfied with the offers they receive from their financial partners. One key reason: The offers aren’t relevant to them.

Signals can help you tailor offerings to a customer’s likely need 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. Scouting for signals helps you extend a relevant offer when your customers are more likely to purchase.

Building a signals-based retention program

Financial marketing is often focused on new customer acquisition, and clearly, customer acquisition is a significant factor in growth. But retaining and growing the business you already have is just as critical. Signals help you accomplish both — and pairing signals with Deluxe tools for acquisition, onboarding, engagement, and retention marketing can help you lay a foundation for a comprehensive marketing strategy.