Five Tips for Building a Stronger Credit-Based Relationship With Your Customers

Credit education is more than a corporate social responsibility activity — it’s a platform for building stronger, credit-based relationships with customers that deliver multiple benefits for all parties.

Here are five tips and reasons why lenders should implement credit education into their customer strategies.

1. Keep your customers’ welfare at heart

The traditional transactional relationship for a product or service is near obsolete. Today, consumers expect more and more from brands they interact with, and the new standard includes highly personalised, communal relationships in which customers’ needs, wishes and welfare are considered. Successful Financial Services providers put customers at the heart of their operations, knowing an attractive value exchange can enhance brand loyalty and keep customers coming back.

Make it a point to understand your customers’ goals and aspirations, and offer accessible, actionable and easy-to-understand credit and financial information. Empower consumers to identify and tackle potential issues as they happen, correct inaccuracies impacting their credit scores, and improve their confidence in managing financial matters. This approach will incrementally fortify your brand reputation, support KPIs across the customer lifecycle, and further complement efforts to meet the FCA’s new Consumer Duty regulations.

2. Informed consumers make for loyal customers

Successful engagement creates a connection between customer and brand. Built over time, it helps increase loyalty, reduce attrition rates, and according to Sales and Marketing Management, increase revenue. To improve engagement rates, businesses should regularly interact with customers via their preferred channels. Executed in an authentic way, this can help a brand stand apart in a competitive marketplace and build trust.

Unlike FMCG’s that work with an ever-changing set of product SKUs, financial providers seemingly have a limited set of options when engaging with customers regarding their financial products. Those serious about improving engagement rates should seek to connect with customers by creating poignant talking-points and thoughtfully investing in their overall digital customer experiences. Credit education and tools like CreditView are a great way to do this as they provide customers relevant, valuable resources and insights. But this solution is more than just an engagement vehicle, it encourages customers to become more financially literate, helping them make better-informed decisions and plan for their future financial goals.

Financial providers that digitally arm consumers with quick and simple credit education tools can ultimately become a go-to resource and trusted provider of choice.

3. Help consumers build their credit scores

The nature of lending means there are consumers your business can’t currently transact with; however, this doesn’t mean this cohort should be ignored. On the contrary, financial inclusion is something we all need to encourage. Declined applicants may not meet your criteria now, but with help, they could be future customers.

Again, educational content and tools that help individuals improve their credit status can be of great service on their journeys. And supportive brands are more likely to be top of mind when these consumers are in a position to apply for credit. TransUnion insights show consumers who were thin file when they registered for CreditView were 2.7x* more likely to move to full file within the first six months of monitoring compared to the same population within the UK credit-active group.

Be the company that lends a helping hand to consumers by educating them on how to improve their creditworthiness and providing the tools they need to build their scores.

4. Create a sticky relationship

In a competitive lending market, successful businesses are those with effective customer engagement, loyalty and retention strategies in place to keep hard-won customers.

A sticky relationship translates to a more loyal audience, low churn rate and higher engagement. The keys to creating this type of relationship are giving regular reasons to engage and meet customers’ expectations of more meaningful, valuable and personalised experiences. The best exchanges are those which engage the customer before they even realise they need your insights or products in the first place. Customers might not know how beneficial credit education and actively working to improve their positions can be in meeting their financial goals. But with gentle nudges — such as regular updates that help them understand the power and possibilities of their credit reports — you can keep your brand front of mind.

CreditView Monthly Alerts bring customers back to your app or web platform again and again, providing regular opportunities to engage even when you can’t actively offer them further credit.

5. Have profitable relationships

With access to credit insights captured through regular customer interactions, you can present the most suitable offers at the most appropriate times, increasing the likelihood of obtaining successful applications with your brand. Acquisition costs are high, so invest in your captive audience by engaging prospects and customers with offers via your app or login — which can help increase conversion rates without heavy investment.

In summary

By taking a proactive role in your customers’ credit education, you can provide them with greater financial awareness, ongoing support, insightful tips and personalised offers at the right time. Going the extra mile can help them make more informed, responsible and sustainable decisions while positioning your business as their premier financial resource. 

Download our eBook — CreditView: Using Credit Data Insights and Tools to Create Brighter Futures — to learn more about the benefits of credit reports, as well as how consumers are already enjoying value via CreditView; how to become your customers’ trusted choice for credit education; and how you establish strong, profitable and long-lasting consumer relationships.