4 Steps to Loan Loyalty

By Rich Walker

How to ensure your customers keep their loans with you.

There’s no better indicator of a consumer’s intent to purchase a new mortgage product than a hard credit inquiry for a HELOC or refi. However, if that signal comes through on one of your account holders—and you’re not involved in the deal, you’re at risk of losing that opportunity to a competitor.

Mortgage holders defect at an alarming rate. The first quarter of 2016 saw 1.4 million mortgage originations in the U.S., half of which were refinances. There’s no doubt that with the ease of online shopping and the rapid growth of online aggregators and aggressive non-bank entities, a good percentage of those refis went someplace other than the homeowner’s primary financial institution.

By using signals to identify account holders who are actively shopping, getting in front of them quickly with an offer—and deploying a consultative sales approach when they respond—you can retain their business and ensure they end up in the right product.

Monitor these three predominant types of signals.

Consumers create signals constantly as they interact with the economy. They make purchases and payments, click on ads, take out new credit cards, and close out paid-down loans. Some signals are triggered by an event: for example, an auto lease expiring, an adjustable mortgage rate resetting, or a child heading to college. Others are predictors of potential future need, such as debt that’s ripe for consolidation or a higher-than-average mortgage rate.

Most signals fall into one of three categories:

    • Behavior-based – These include both explicit behaviors, like hard credit inquiries and online searches that signal intent to purchase, and subtle behaviors like filing a change of address form that might be an indicator of a future need.
    • Event-based – Events like an auto lease expiring, an adjustable mortgage rate resetting, or a child going off to college are signs the customer may be about to experience a significant financial shift and might require a new financial product in the near future.
    • Predictive – While these passive signals, like debt that’s ripe for consolidation or a higher-than-average mortgage rate, don’t show intent, they help identify prospects who could be helped by an alternative financial product.


Signals aren’t new to bank marketers. In 2016, financial institutions spent over $8 billion on digital advertising. Every one of those dollars was deployed with a similar mission: to get in front of consumers actively shopping for a product or service. But tracking clicks on digital ads leaves a lot of room for error. While online activity indicates interest, it doesn’t always indicate intent.

Follow these four steps to use signals at your bank.

Signal-based marketing allows financial institutions to target more effectively—making campaigns more efficient and successful. In fact, banks that follow best practices for signals marketing report improvements in retention of up to 300%—and experience ROI of $90 in revenue for every dollar spent. So, what steps can you take to head off mortgage defections?

  1. First, identify customers who are actively in the market for a new mortgage loan. Credit bureaus generate credit-inquiry signals daily. Monitor all three bureaus to maximize your visibility into who’s shopping. With the average time to close a mortgage around 30 days, there’s plenty of opportunity to intervene and win the customer back.
  2. Second, identify customers who meet your specific underwriting criteria. If the credit inquiry is delivered with a full marketing-stage credit file, you can apply your criteria and make offers only to those you know will qualify.
  3. Third, send the consumer a targeted marketing communication. Use a single, compelling message that’s all about saving—either on interest or on monthly payments—so the customer can immediately grasp the value proposition. While there may be products better suited for their situation than the one they’re shopping for, don’t confuse them by referencing multiple products. Save that decision-making process for the point when they’re talking to one of your competent, consultative sales associates.
  4. Finally, don’t let things fall apart when the customer hits your call center by staffing specialists who can only speak to one financial product. Use a consultative sales approach with a well-versed staff that can help the account holder navigate multiple financial vehicles. Once you know more about the customer’s specific situation, you can work with them to help them select the most appropriate product.

For example, an account holder seeking a HELOC to consolidate debt might be better served by a cash-out refi or a personal loan. Or a customer seeking a refi may not realize that with interest rates on the rise, a HELOC might be more advantageous. Getting customers in the right products at the start can further help your retention efforts down the line.

Combining signals with targeted marketing and consultative selling is the foundation for a sound retention strategy. And both parties win: Your customer gets the right product and you keep an account holder. But more importantly, you’re building a solid customer relationship by demonstrating you care enough to make sure your customer is best served. And that instills the kind of loyalty that can last for years

Rich Walker is executive director of strategy and advisory services for Deluxe Corp., a financial services marketing firm. As the former vice president of marketing at Capital One, Rich has a long history of using data to create targeted campaigns that target consumers at the right time, with the right message and offer. His recent white paper, Signals: The Marketing Evolution You Cannot Afford to Ignore, explores the ways marketers can use consumer signals to run stronger campaigns that drive better ROI.