Your past borrowers are essential for sustainable growth. Here’s how to develop effective strategies for engaging them, enhancing their loyalty, and tapping into their potential as repeat customers.

You know it as well as I do: Private lending is highly competitive. Borrowers go to the lowest bidder sometimes, trying to get the best deal possible for their property. But they’re also looking for relationships, someone who can close their loan no matter what.

How do you “find” these relationships?

You already have.

Your “book of business”—your roster of past and current clients—is not just a record of past transactions, but a goldmine for potential future deals and a reservoir of referrals.

The Importance of Past Borrowers

Past borrowers are a valuable asset. They’ve already been through the loan process with your institution, which means they are familiar with your procedures and have established a level of trust with your brand. Reaching out to them can be significantly more cost-effective than acquiring new clients. You’ll save on marketing expenses and have a higher likelihood of conversion. Furthermore, satisfied past borrowers are more likely to provide referrals, helping to expand your client base organically.

Dial In Your Back Office

First things first: Do you have your back office in order? If you want past borrowers to refer business to you and continue to use you, you must make your processes as frictionless as possible. Consider hiring a virtual employee to take care of your tasks, manage your inbox and respond to your borrowers, make your back office completely seamless with accounting and reporting, and everything needed to look both professional and give your borrowers the very best experience. Even if you’re not the absolute cheapest, you’ll demonstrate that you are reliable.

Segment Your Audience for Personalized Outreach

Before launching an outreach campaign to past borrowers, it’s crucial to segment your past borrower lists based on relevant criteria such as loan type, property type, experience, etc. Segmentation allows more personalized communication, which can significantly increase engagement rates. For instance, you might tailor your messaging differently to those who took out home loans versus those who opted for personal loans.

Regular Communication Is Key

Staying in touch with past borrowers keeps you and your lending company top of mind. People are inundated with information and easily forget. Regular updates about your services, changes in loan rates, or even informative content related to financial management can make your communication valuable to your past borrowers. Newsletters, email updates, and personalized greetings on special occasions (like birthdays or loan anniversary dates) are effective ways to maintain contact without being intrusive.

Make a Friend Out of Your Borrower—They’re Human Too

Relationships are everything, and the lending business is no stranger to it. You have a lending business to run, and that, of course, takes precedence. Don’t make bad deals, even if someone is your friend. However, you can enhance any borrower relationship by asking about their family, dreams, hobbies, and goals. Keeping track of that shows the borrower they’re more than just a borrower—they’re a human with dreams and goals you care about.

Offer Refinancing Opportunities

Market conditions change, and so do the financial situations of your borrowers. Proactively reaching out to past clients with information on refinancing options can lead them back to you when they’re considering their next financial move. Many of your borrowers may likely be coming against maturity defaults. Offer them a refinance with more time, or maybe more time with additional money for their other projects.

Leverage Testimonials and Case Studies

Sharing success stories of past borrowers through testimonials and case studies can significantly influence decision-making. When potential and past borrowers see real-life examples of how your lending solutions have helped others, they are more likely to consider similar opportunities. Ensure you have permission to use clients’ stories and photos; then distribute these testimonials via your website, social media, or email campaigns.

Utilize Social Media

Social media platforms are powerful tools for engaging with past borrowers. Regular posts featuring loan advice, financial tips, or community news help keep your audience engaged. Encourage past borrowers to follow your pages, and engage by responding to comments and messages. This not only enhances relationship building but also boosts your visibility to their connections who might be potential clients.

Personalized Offers And Promotions

Create offers or promotional deals specifically for past borrowers to make them feel valued and encourage repeat business. For example, offering a reduced origination fee for second-time borrowers or special terms for those referring new clients can incentivize past clients to engage with you again or refer others.

Conduct Satisfaction Surveys

Understanding how past borrowers feel about your service is crucial. Regular satisfaction surveys can provide insights into what worked well and what didn’t. This feedback is valuable for improving your services and tailoring your outreach efforts. Additionally, it shows borrowers that you value their opinions, which can enhance loyalty.

Educational Workshops and Seminars

Hosting educational workshops or seminars is another excellent way to keep in touch with past borrowers. These events provide value beyond just the services you offer and position your brand as a helpful resource in financial decision-making. It’s also a great way to reintroduce your services to attendees who might be considering another loan.

Network Building Events

Invite past borrowers to exclusive events or meet-ups that allow them to network with others. Such events not only strengthen your relationship with past clients but also provide them with additional value, making them more likely to see you as a key business partner rather than just a service provider.

Implement a Loyalty Program

Developing a loyalty program that rewards past borrowers for their continued business or referrals can create a long-term engagement strategy. Points-based systems, where points can be redeemed for lower interest rates, lower origination fees, or other benefits, are particularly effective.

Ask for the Referral

As soon as you have bailed your new borrower out of a jam is the best time to ask for a referral. Whether it’s a refinance or closing a difficult deal, now is the right time to ask for them to refer their friends. You just saved their deal—they want to help you out. Ask now.

Engaging past borrowers is an ongoing process that requires a strategic approach. By understanding their needs, communicating effectively, and providing them with value beyond just financial transactions, you can turn past borrowers into lifelong clients and advocates for your business.

Implementing these strategies will not only enhance your borrower retention rates but also boost your overall business growth through repeat and referred business. This personalized, value-focused approach to client management is what ultimately separates successful lending institutions from their competitors. People always claim customer service, but they don’t practice it. Practice it, and you’ll always be profitable.