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Why Retention is a Major Key to Your Success

By October 26, 2018February 11th, 2019News

Every business is looking for new customers and opportunities. Growth is the key to sustained success. There is a cost associated with growth of course. In the banking world, there are opportunities within your loan portfolios that deserve some of those marketing dollars. Taking advantage of these opportunities makes growth and profitability a lot easier. The key to this: RETENTION MARKETING.

Every day your customers are under assault from your competition. Mortgage customers are receiving offers from the big guys on a regular basis.  These offers are going to your best customers because they utilized readily available information.

Firm offers of credit are going to highly qualified customers. Credit card offers are being mailed on a regular basis. Car dealers are offering zero percent financing in some cases. How do you keep your customers in this environment?

1. Start with your Mortgage Loan Portfolio

You have a portfolio with thousands of customers that you service. Do know your retention rate? You do know that each month a certain percentage are going to pay off. Therefore, you need to replace those loans with new ones. It makes sense to reduce to the number you are losing.

Getting a current mortgage loan customer to refinance for example renews your mortgage servicing right, provides closing cost income and keeps your customer in the fold. It also opens the door to create new banking relationships with that customer.

2. Growth Opportunity: The Non-Mortgage Customer Portfolio

You have customers with checking accounts, a credit card, auto loan etc. but no mortgage. Some of these customers are renters; some may not qualify for a mortgage. However, by using recorded information you can determine who to market to for a purchase loan, refinance or home equity line of credit.

  • New mortgages in your footprint, from your competitors
  • Renter to home owner campaigns

Retention marketing allows you to:

  • Reach an audience that you currently do business with. They know who you are.
  • Maximize the “share of wallet” you have with each customer.
  • Use trigger programs to alert you when a mortgage customer has taken an application with another institution.
  • Reduce your marketing costs. You have a captive audience.