Auto lending is a key business objective for many of our credit union clients. Running a targeted campaign is a great way to increase auto loans, but you don't have to stop there. Additional fee income, combined with the opportunity to increase member loyalty, can be a byproduct of auto lending.
Cross-selling to your current members can give your sales staff an advantage — those clients have already placed their trust in your credit union, so they are a key target for cross-selling point of sale products.
We've identified three reasons why we believe cross-selling can enhance your auto lending strategy, and potentially be key to the future success of your credit union:
Increased Member Loyalty
The competition in the financial service provider arena is intense. Credit unions are competing with large banks and institutions, payday lenders, community banks, and even insurance companies. Offering low rates is no longer enough to keep your current borrowers and attract new ones. Consumers are looking for value in their financial service provider. Along with providing your borrowers with a low rate, the option to add products that can protect and insure their auto investment, save them thousands in the event of a mechanical breakdown, and much more is a great way to provide value and increase member loyalty.
When an accident occurs, the last thing your borrowers want to hear is that they owe thousands on a vehicle they can no longer drive. Instead, you can be the bearer of good news, informing them that the GAP with PowerBuy policy they purchased from you paid their balance in full, and they also have funds available for a down payment on a new vehicle. These kind of positive interactions lead directly to increased member loyalty.
Increased Fee Income
With shrinking returns on loans, it makes sense to become proficient in offering targeted point- of-sale programs to boost revenue, so when providing your members with the option to purchase vehicle protection products that can protect their investment and you earn fee income as a byproduct, it's a win-win. Cross-selling a vehicle protection product at the close of every loan will lead to increased fee income and perhaps help keep rates lower for your members, making your auto loan offering more competitive. The more well-versed and confident your sales staff gets at selling your members on the advantages of purchasing point-of-sale products from you — their trusted financial partner — the higher sales will be, resulting in even more fee income on top of your anticipated auto interest income.
Improving member services goes hand-in-hand with increasing member loyalty. Depending on the culture of your credit union, "selling" or "pushing" products may not seem like a way to improve service, but I'd argue that it's time for a new school of thought. You are your members’ financial educator, so think of it this way: how many of your members would lose their job if their vehicle was totaled and they couldn't afford to get a new one to drive back and forth from work? Providing your members with the option to invest in products that could potentially save them from a financial disaster is the essence of great service.
If you're looking for a way to maximize your auto lending and increase member loyalty, check out GAP with PowerBuy, the newest GAP product on the market. As the exclusive provider, we give you the ability to provide your members with a product that can not only pay off the balance of their auto loan in the event of a total loss, but also give them funds to finance their next vehicle with you.
Ronni Martinez joined SWBC in 1998 and is currently the Vice President of Specialty Auto Products for SWBC’s Financial Institution Group. Her background includes experience in accounting, budgeting, mortgage servicing, quality control, process improvement, and operational auditing. In her current role, Martinez oversees all of the administrative, operational, and sales support functions for SWBC’s Point-of-Sale products, including Payment Protection, Guaranteed Asset Protection (GAP), and Major Mechanical Protection (MMP).