The cost of customer acquisition in banking is at the forefront of many business leaders’ minds, as most lenders spend around $200 per acquired customer. Customer acquisition cost (CAC) is one of the most significant costs of running a financial institution and finding ways to reduce it is the key to making lenders more profitable in the long run. A lower CAC can also reduce financial risk overall by making new business relationships take less up-front investment.
There are several ways to acquire customers, but most of them involve costly marketing campaigns that risk increasing CAC in exchange for driving conversion. Today, we will break down the best ways to reduce CAC by focusing on lead magnets that don’t cost as much to maintain and can even drive profits.
The strategies we suggest for lenders are:
- Increase visibility on social media
- Provide an omnichannel experience
- Partner with a POS financing company
Let's dive into each and explore how to lower costs and still acquire new customers.
Increase Visibility on Social Media
Lending is a longstanding industry, and most financial institutions have been around for a while. This brings many benefits in the way of regulatory compliance, business savvy, and tried-and-true product offerings for their clients.
The drawback, though, is that not all of them are very quick to adapt to new market trends that younger companies take full advantage of to get a competitive edge. Social media is one of these trends, and it often doesn’t cost much to increase visibility and interaction with both existing clients and uncaptured leads.
Lenders should work to build out social media profiles on all major platforms (Facebook, Twitter, Instagram, LinkedIn.) and ensure that each of these profiles is posting frequently. This can mean posting promotions, educational posts, or even just participating in popular social media trends. The most important aspect of a social media presence, though, is to be easily accessible to customers through every platform, with staff ready to give potential leads prompt responses whenever they reach out or interact.
Provide an Omnichannel Experience
On the note of being ultimately accessible, many consumers start their purchase processes on one channel (like an app on their cell phone) and finish it on another platform (like a website on their computer). For these consumers, it is vital that a lender looking to convert them offers an omnichannel experience, wherein a customer’s progress can be saved and carried over to another platform mid-transaction whenever possible.
This is a bit more expensive than the social media angle but can provide an experience that widens a lender’s net and captures more leads through convenience and flexibility.
Partner With a POS Financing Company
One of the most popular financing trends and one of the easiest routes to customer acquisition in banking over the past few years has been POS financing. Consumers that have had their shopping pushed even more online than before and their buying power forced to fluctuate more than usual see the flexibility of consumer financing as necessary to a modern shopping experience.
As a result, businesses that offer some sort of POS financing see an average 20-30% increase in conversion and a 30-50% increase in average ticket size. Lenders can capitalize on this by partnering with a quality fintech firm that helps connect lenders and merchants through a POS financing software platform.
These fintechs make it simple for lenders, allowing them to focus on bringing their quality finance offerings to the table without worrying about building their own lending platform. White-label platforms allow lenders to put their own brand on any customer-facing portals or applications, giving them all of the consumer rapport that is to be gained from offering such flexible and convenient options.
Lower Costs of Customer Acquisition in Banking With Skeps
Skeps offers a comprehensive, end-to-end consumer financing platform that helps lenders and merchants connect with convenient and modern financing options. Working with an entire network of established lenders and a wide variety of merchant partners, we go above and beyond instant installment loans. We help lenders offer a few different types of consumer financing through third-party merchants, including:
- Instant installment financing
- Co-branded credit cards
- Consumer loans and leases
So If you’re looking to partner with a forward-thinking fintech company that will get your financial products in front of as many consumers as possible, Skeps is the perfect fit.