You offer incredible auto loan rates at your credit union, making your institution the perfect spot for members to finance or refinance a vehicle. The competitive rates you offer can certainly help members save money rather than lose it, which is why you should invest in an effective auto loan recapture program. Not only can a recapture strategy benefit your bottom line, but it can also support you in empowering your members to reach their financial goals. However, there are a few options when it comes to achieving success in these areas, including opting to do everything in-house, partnering with a vendor, or paying a vendor to take care of it all. In this article, we'll review how to choose the right approach for your credit union that will benefit you and your valued members.
Member Experience Matters Most
Member experiences, whether in-branch or online, have the power to drive decisions. Every choice you make as a credit union should be centered around your members' needs and how you can fulfill them with a simultaneous concentration on generating more loans. It's possible to achieve both a high level of member satisfaction and a positive ROI. It's just a matter of your approach to auto loan recapturing and refinancing.
How to Choose a Recapture Plan
Every credit union and the community they're part of is different, which means that choosing a recapture plan is not a one-strategy-fits-all kind of situation. Although we know you were hoping for a solid "this approach is the best" answer, the route you choose boils down to your CU's specific needs, challenges, and expectations. Here are five key steps to follow during the decision-making process:
1. Understand Your Purpose
Of course, your CU is looking for more loans, increased wallet share, and an influx of new members. However, it's important that you pinpoint what your primary objective is.
- If you want to focus on more members, you'll want to emphasize targeting, contacting, and following up with the right group of members that fit your desired persona standards.
- For those who've decided to generate more non-interest income, you need to ensure that you promote your additional products and services throughout your recapture program attractively.
- If more wallet share is your main objective, then you need to connect with existing members and create a seamless process for them. For example, you could give a reliable fintech partner API access to your member database, which would allow for autofill forms and existing loan data.
2. Establish Specific Goals
Setting both short and long-term goals ahead of time is critical, as it helps you establish what resources you'll need and determine the most effective method. Common variables for measurement include:
- Loan Volume
- Number of Booked Loans
- ROA
- Non-Interest Income
Ask yourself what you'd like to accomplish in a 30, 60, and 90-day period for each variable. Then ask yourself if those goals are achievable for each approach (in-house, partnering with a vendor, paying a vendor). This should help you choose between in-house or partnering with a fintech company. And, as you watch your campaign progress, make sure you take benchmarks at set times and measure them against your projections. From here, you'll be able to analyze and alter them to obtain better results.
3. Determine Your Budget
It's also important to decide how much money you want to spend and whether you'd like your payment to be upfront (when you purchase immediately via contract) or ongoing (a performance-based plan where you pay based on a percentage of every closed loan). Once you make a decision, that should direct you toward keeping everything in-house vs. outsourcing to a vendor.
4. Examine Your Resources
Your staff members have a variety of skill sets, but there may be certain skills that are missing. It's wise to consider that in-house programs will require a lot of time from your team, including everything from sales marketing to administration. When you choose to work with a vendor, you can ease the burden on your employees. Also, make sure to take inventory of other resources associated with advertising, list building, and direct mail, and determine whether you're seeing results or wasting valuable time and money.
5. Develop a Marketing Strategy
Now, take all the decisions you've made along the way and combine them into a single, solid marketing plan. Decide which employees are handling what tasks, the timing of everything, and the factors involved. Make sure both your marketing and lending teams work cohesively together, and if you've chosen to work with a vendor, keep them looped in as well.
Recapture the Right Way With an Efficient Auto Loan Recapture Program
Now you know the steps involved in choosing an auto loan recapture strategy, which can help you decide whether to stay in-house or look for an outside partner. After determining your primary objective, solidifying your goals, setting a budget, analyzing your resources, and creating a marketing plan, you can take action to benefit your members with additional savings!
Here at FLEX, we've collaborated with SavvyMoney, a fintech company offering targeted lending campaigns, valuable insights at the click of a button, pre-approved loan offers, loan lead identification, and more. Are you ready to embrace today's technology, so you can better serve your members? Download our eGuide today!
