WE DISCUSS IN THIS EPISODE
A controversial topic for our hosts today all around cash back offers: why lenders use this strategy and how it affects you as a broker, and your client! Take a listen now. Key points include:
- The timelines, the service the client gets, the process – it can be hard to keep the client motivated to say with the bank when a cash back offer is there, but takes so much time and effort to gain.
- Typically, cash back offers aren’t great because the banks don’t have the capacity to process the application quickly. So this leads to a poor customer experience and is disappointing for everyone.
- I feel there are better ways of managing the customer experience here. I think banks should reward customers with lower interest rates and look after existing customers.
- The cash back offer is a quick client grab, trying to fill their bucket with new business all the while the bank’s existing clients are feeling left behind.
- Cash back or a reduced interest rate? We see this in the market now and more clients are opting for the redacted interest rate which ends up being better in the long term for everyone.
- Lenders need to make sure they have the back end systems and processes to support their new business promotion. Otherwise, you risk long term damage to the brand and reputation.
- As a broker you need to assess what is best for your client in the long run, and present the best long term value for them. If it’s all about the cash back, there needs to be a deeper conversation.
- Be clear with the client at all stages around the time lines and experience of the cash back offer because you have an obligation to be a part of their client experience with every step of the process.
Key Quotes
“Look at the lenders who don’t offer cash back offers and still maintain a high market share – they’re the ones who are putting in their effort to customer retention strategies.” – Ruan
“Think about your client experience. If I was to evaluate this at the end of the settlement and see if it was a great experience and outcome, should I even put it on the table?” – Ruan
“I think banks should reward customers with lower interest rates and look after existing customers.” – Marissa
“Banks are not putting their clients needs first. They’re focused on the transactional side, and the new customer”. – Marissa
