Business owners want their lending process to be easy, quick, and painless. As a small business lender, your revenue is directly correlated to the satisfaction of your customers.
The SME lenders who win market share today are in that position because they offer a superior level of service and have happy customers.
Often there is a gap between what customers want and expect and what SME lenders are capable of providing. Customers want a quick decision, but lenders must carefully weigh the associated risks without sacrificing quality of service.
The need for small business funding is well documented, but customers will not hesitate to move on until they find the right lender. Your competition has the right technology in place, and it’s giving them a significant advantage. Many SME lenders still rely on legacy lending software that doesn’t allow them to offer the best experience possible. By failing to meet the needs of their customers, lenders are leaving opportunities on the table.
In this article, we will explore the role of digital transformation in providing small businesses with the streamlined, personal customer experience they’re looking for in a lending solution.
Why the SME Customer Experience Matters
Happy customers are the lifeblood of any business, but this is especially true in the world of small business lending. Low rates aren’t enough to attract business; it’s the customer experience that serves as a differentiator among lenders.
Small business owners are personally invested in their business, to the point of using personal savings to fund their operations. For this and many other reasons, they want a partnership with a lender who really understands the needs and goals of their organization and can offer a hassle-free solution.
Alternative lenders don’t have the opportunity to meet their customers face-to-face. As a result, lenders have to create an exceptional and personalized customer experience within a digital framework.
One important takeaway from the COVID-19 pandemic is that SME customers have placed a premium on real-time decisions, process transparency, and low-friction solutions. According to a 2021 J.D. Power Study, 45% of small business owners now define themselves as “digital-centric.” This is up from 33% before the pandemic. This shift in preference towards digital channels has bridged the gap for a personalized customer experience despite zero in-person interaction. With the right technology partner, alternative lenders are able to deliver just that.
A Great Customer Experience Is Good for the Bottom Line
In nearly every B2B or B2C industry a stellar reputation or lack thereof could mean the difference between scaling your business or failing to thrive. Happy customers become repeat customers. Happy customers agree to leave positive reviews and refer industry peers. Positive reviews and referrals lead to exponential growth for your alternative lending business.
Yes, the process of funding is largely transactional, but the intangible elements of the customer experience should be equally emphasized. One McKinsey article puts it like this: “[Lenders and financial institutions] need to make the customer experience the starting point for process design. To do so, they need to understand what customers want, and how and when they want it. Instead of a major cost center, operations of the future will be a driver of innovation and customer experience.”
Automation, transparency, and innovation are all tied to an enhanced customer experience, as they allow for a faster and more accurate response from the lender. These elements also allow credit management staff to focus less on operational tasks and more on resolving issues that cannot be automated.
When the focus is free to shift to a great customer experience, lenders experience greater rates of customer retention and advocacy, leading to a better reputation and more revenue.
Acquiring new customers can cost an organization nearly five times as much as retaining current customers. If loyalty is the key, customer experience is essential because the experience drives over two-thirds of customer loyalty.
In addition to meeting the customer’s needs with loan products, lenders can retain current customers by:
- Providing opportunities for engagement
- Creating an effortless experience
- Being transparent with all operations
Customer centricity, not low rates or the most loan products, will give lenders the competitive advantage they seek in the new digital landscape.
Three Steps Lenders Can Take to Improve the SME Lending Experience
The experience you offer your customers can take your lending business to the next level. So how do you achieve a crowd-pleasing experience? Small business lenders can take these three steps to improve their customer experience.
1) Move On From Legacy Systems
The average customer wants and expects instant responses. With more digital and real-time communication channels available at their fingertips than ever before, busy customers are acutely aware of the benefits of these digital channels and their impact on time and productivity. Customer expectations and preferences are not compatible with obsolete legacy lending systems, which are plagued with paper trails and lengthy processing times.
SaaS lending platforms can help streamline workflows for a quicker, more efficient lending process by automating routine tasks, providing built-in templates for communication, and integrating institutional-level reporting with advanced configuration and customization.
2) Personalize Your Customer Experiences
Borrowing money is a personal endeavor, and each interaction with your customers should be highly reflective of this reality.
Make good use of the customer data that you acquire, and leverage the data you already have to make powerful decisions when scaling your lending business. Ask yourself questions like these when examining data you have and how you will continue to gather customer data:
- What offers were most successful?
- Who are my ideal clients, and who are the riskiest clients?
- Are there any patterns in terms of client profitability and geography?
- What messaging strategies and timing contributes to the most growth?
Utilize your data strategically to segment and target growth in defined industry segments. Build relevant experiences and robust relationships with your customers by collecting data with an agile lending platform.
3) Remain Responsive to Shifting Customer Needs
Invest in your digital experience to ensure you are keeping pace with shifting customer wants and needs. If the last few years have taught us all anything, it’s that the lending industry changes quickly. Customers want a seamless experience without friction, but today’s “seamless experience” may not meet tomorrow’s expectations.
How can you remain responsive to shifting customer needs? Keep the lines of communication open by building intentional opportunities for customer feedback. Ask for reviews, surveys, and details on each customer’s experience. Examine NPS scores and dive into any areas less than satisfactory. With the lack of face-to-face communication, this digital experience is a core part of today’s customer service.
Create a Better Customer Experience with Onyx IQ
Creating a great customer experience is the key to unlocking growth as a small business lender. In your quest to create a customer-centric culture in your SME lending business, you can partner with the right technology partner to:
- Drive actionable customer insights
- Create customer value through a seamless online process
- Identify opportunities for growth through data segmentation
- Foster a culture of personalization and positive engagement
Onyx IQ is the digital SME lending solution designed to provide a user experience where data intelligence thrives. Our platform can support every step and requirement of your small business lending process.
Request your demo today.
