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Digital Lending

Expert Guide to Driving Better Conversions in Digital Lending

April 25, 2022 Precisa Team No comments yet
Expert-Guide-to-Driving-Better-Conversions-in-Digital-Lending

So let’s get straight to it: digital lending is the future. However, as per Experian’s take on digital loan conversions, 97% of applicants abandon the digital lending process, leaving a teeny-tiny 3% conversion rate.

While digital loans have a fantastic appeal of convenience that people love, this appeal doesn’t guarantee conversion. Fortunately, we have the technology—Big data, increased digitisation, advanced data analysis, AI, IoT, and whatnot.

But it takes more than tech capabilities to excel in digital lending (which is conversions). You need to leverage behavioural economics to coax customers. The idea is to push customers down the conversion funnel to walk them through the end of the loan process.

Continue reading to discover how you can win over your customers and nudge them to lending conversions.

Customer Experience Wins at Digital Lending

One of the common principles of behavioural economics is a nudge, as idealised by Richard Thaler in his 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness.

According to Thaler, deciphering the concept of nudge, humans are not always rational about making financial decisions. They enjoy exploring options.

Therefore, the catch is building a process flow centred not only on the customer journey but also around freedom of choice with enough options to consider.

Getting customers aboard your credit products

Getting-Aboard

Onboarding customers is the most challenging part, as customers often do not push through the complete onboarding process. Moreover, benchmarking the onboarding prospects is difficult, including the customer journey, product insights, and application.

But nudge somehow makes it easy by implying positive reinforcement and suggestions. Here is how you can improve your onboarding process using the nudge principle:

  • Hook customers with something that can pique their interest. It can be as simple as featuring their eligible loan amount.
  • To pre-populate fields, you can use APIs. One such example is Google Autocomplete Form which enters an applicant’s entire address, sparing the user the hassle of manual input.
  • Add simple and clearly defined steps in the process and eliminate unnecessary inputs.
  • Add an auto-save form option for when people want to keep the filing process to fill later.
  • In case clients do not get back to the form, plan a campaign targeting abandoned form applicants to redirect them to the process. For example, adding an offer or deal would compel them to finish the process.
  • Provide support that customers can vouch for in case of queries. This humanises the process.

Use data analytics to your advantage & build a cross-promotion campaign

The lending market is vast, and brands are draining every tactic to target customers using custom or tailored products. For instance, lenders amass data on buyer intent to target customers with the relevant product or, better yet, offer a new line of lucrative credit products.

As a lender, use a cross-promotion strategy and customise marketing your products based on a customer’s personal needs. You can also leverage data insights to predict future loan needs based on cash flow and previous lending patterns.

You can also customise your product by benchmarking your client’s pre-approved loan amount derived from spending patterns. For the end goal, target the right communication mediums by taking notes of the right time and need and sending your message to your customer.

Half of the conversion magic is done when you streamline your communication lines and hit the customers when they need your product.

This marketing strategy serves new revenue streams onto your plate, fresh out of your customers’ pockets.

Delight your customers during a process completion or compel them to put a word out there

Successful sale is not the end goal for any conversion funnel. You have to give your customers reason to stick with you for subsequent transactions and for a long time.

You can delight your customers even when they are in the middle of the conversion funnel or at the bottom. Let’s consider two avenues of possibilities: one where you are still not able to make the sale, and the second, where you just want your customers to vouch for you.

Here is what you can do:

  • Delight the prospective customers – Let’s say a person has still not been through the application process. You can again use the concept of a nudge and offer something, say a discount on any charge entitled to you.
  • Reward your customers – You can develop a reward system for your loyal customers who choose to stick with you through thick and thin. This is another strategy to get customers to stay with you longer and get them involved in word-of-mouth marketing for you. Works like a charm most of the time.

Closing Thoughts

It doesn’t matter how compelling your offer is or how well you leverage technology; if you do not use them to enhance the customer experience, you will not get the best results.

Customer experience sits comfortably at each funnel stage, thereby channelling business. You get your customer experience right; you have your conversion rates sorted.

Precisa is the new-age automated and data-driven solution for digital lending. Our bank statement analyser at Precisa breaks through the otherwise lengthy manual process of approving applicants applying for a loan. As a lender, you save time, and mishaps, while analysing potential loan applicants’ bank statements for eligibility.

Like the idea? Our 14-day free trial version is available to explore how powerful this tool is.

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