3 Strategies for Effective Consumer Communication

SAN DIEGO — Technology is changing the way lenders engage with their customers, prompting lenders to hone their value propositions, Westlake Financial Service’s Senior Vice President of Marketing Mark Vazquez said at the Auto Finance Sales & Marketing Summit this month.

Vazquez delved into tips on effective communication with consumers through both traditional and non-traditional avenues, as well as the importance of keeping those lines of communication open with dealer partners.

“As lenders, we hold a very large role in the whole evolution of auto finance and sales because of our position in the market and our resources,” he said, revealing how financiers’ involvement can shape the industry and how following a few simple rules can transform pain points into opportunity.

Act on the Data 

For lenders on the up-and-up in the auto finance industry, the following statistics Vazquez shared during his presentation may sound familiar:

• 87% of consumers dislike something about car shopping at a dealership
• The average customer spends 15 hours shopping for a new vehicle
• An average sale takes four hours once the customer arrives at the dealership

To improve the financing process, lenders must first understand how consumers feel about the car-buying process. “Every time I see that kind of data, I always see room for improvement, which means there’s a problem we can solve and address,” he said.

One of the most valuable elements of this step is knowing where the customer is shopping, not just who the customer is. Vazquez said 60% of buyers’ time is spent online shopping — and a lot of that action takes place on mobile devices.

“We need to cater to the online buying power,” he said. “We have to be where [the customer is] at. From a marketing perspective, that’s very important.”

There’s a lot of data out there, Vazquez said, “but not acting upon it is the worst thing you can do.” He said it’s no surprise that consumers are increasingly spending more time on their cell phones, yet, “you’d be amazed at how often we understand this but don’t take action upon it.”

Identify Marketing Channels

Choosing the right marketing channel is a critical piece to successfully communicating your value proposition to customers. Even with the rise of technology and mobile buying power, Vazquez revealed that Plain Jane marketing tactics — direct mail and email campaigns — are Westlake’s most effective communication tools.

For example, email campaigns that offer consumers a rebate off their down payment generate a near 20% conversion rate at Westlake, Vazquez said.

The Irvine, Calif.-based subprime lender starts marketing to existing customers when they have paid off 50% of their balance; Westlake pushes the marketing efforts even harder when customers are at 75% of the balance. “A good way for [customers] to return is by offering them money,” he said, adding that the company’s retention rate has doubled in the past couple of years.

Have a Clear Message

Once the channel has been identified, the message communicated must clearly direct the consumer to an action. “You’re trying to drive them to visit one of your current websites where you can prequalify them, or [get them] to visit a list of preferred dealerships — whatever it is, the message has to be very clear,” Vazquez said.

For instance, if it is difficult for a consumer to engage in an email on a mobile device and act, almost 50% of the time they’ll stop, Vazquez said.

Part of maintaining successful communication with customers means having dealer partners echo that communication, Vazquez said. Lenders need to leverage technology and train sales reps to communicate those expectations.

Westlake, for one, uses an in-house website that the sales force and dealerships share to keep updated on which offers and products the lender is currently pushing.