10 Steps to Supercharge Loan Growth with your Online Car Buying Service12 min read

Man Touching Virtual Apply Here Button
(Last Updated On: December 10, 2019)

Congratulations! You have shown foresight in embracing your Car Buying Service. So…how’s it doing? Are you able to measure the program’s success?

Interesting question, right? And, if your credit union is like most, you don’t have the answer.

It’s a challenge we address often.

You’re Not Alone

Our firm represents the TrueCar Car Buying Service. Since 2013, we’ve learned the common challenges and how to make it work best at over 100 credit unions across the country.

Of course, we understand the TrueCar program may not be a fit for your credit union. Our goal is to help you maximize your auto lending, regardless of which service you use.

First, let’s clarify why your credit union has a car buying service. If it’s as a tool to help members and generate loans, then you are on the right track.

According to Google, 95% of consumers are using online car buying services to start their search. Where do they go? Car buying websites such as KBB, AutoTrader and NADA.  They use Capital 1 as their financing source. Remind me again, is that yours? Thought not. Your CU is losing loans to the web.

Car Buying Service Cheat Sheet Tablet Cover

Ensure your Car Buying Service is running at full power and increase conversions by up to 200% with our 5 Step Cheat Sheet!
Let's Do It!

Your car buying service keeps members close, while driving them to your financing. When positioned well, it does so seamlessly. Of course, there’s a path to get to that point. Let’s start with setting goals.

Goals for Your Car Buying Service

Square one: how much loan volume do you want from your car buying service? Hint: “a lot” is not a valid answer.

Treat this number/projection just as you would any other for institution planning. Here’s where we start with clients:

  1. Set goals for direct loans
  2. If you engage in indirect, set goals for that, too
  3. Start conservatively. We recommend 5-10% of currently monthly loan volume.
  4. With those numbers, do the math in reverse

Say that number is $500,000 and your average loan is $20,000. That’s a goal of 25 booked loans. Now you have a goal. We’re not done yet!

What is your approval to booked percentage? We’ll go with 80%. This means to book 25 loans, you must approve 31.

What is your application submitted to approval percentage? Say it’s 70%. Now you must get in 45 applications to achieve your 25 booked loans goal.

Now, since you didn’t yet begin tracking, we’ll have to estimate the conversions from Prospects (those members who completed a form on your Car Buying Service) to Loan Applications.  60% is normal with our clients. That means you must generate 75 Prospects through your Car Buying Service.

Finally, what is your Unique Visitor to Prospect Conversion Rate? This metric reflects visitors to your Car Buying Service and how many submit information to you (meaning, they’re definitely serious about their search).

With a clean and focused site, you can expect 1 prospect for every 9 unique visits. So, working backwards, we came up with a Unique Visitor goal: 675 Unique Visitors to your Car Buying Service.

Booked Loan Donut Chart
Here’s the above math in the form of a donut. Because everyone loves donuts.

Why did we work backwards to Unique Visitors? Great question. Because that’s the one metric you can directly influence through marketing, education, and other efforts. It’s “how many people visited your business” in a nutshell.

Plug in your own numbers to start the goal-setting process.

Marketing Team, Go!

Since you did the math, your marketing team now has a clear goal: They are tasked with driving 675 members to your Car Buying Service website. Is it ready? The first step is to make sure your website is set up according to best practices. So what are they?

Let’s look from your member’s perspective: The two most visited pages on your website are your Homepage and Home Banking. Meaning, we want to make sure both of them provide compelling links to your Car Buying Service.

But explaining the benefits to members takes up an unreasonable amount of space on these precious pages!

That’s ok. We’ve got a solution: Landing Page. An attention-grabbing graphic links here from your homepage and online banking platform. Now, we can excite, inform, and encourage loan applications in the process! Here’s how:

1) Landing Page

It’s all about catching the attention of members who are in market. Those links on your homepage and in home banking will accomplish this task. Now, members are brought to your Landing Page.

This is where you set expectations. It explains what your Car Buying Service is, how it can help them, and what you recommend doing once there. Straightforward expectations maximizes click-throughs. If available, you can also include Search Widgets on this page to increase conversions.

2) Calls to Action

Your landing page needs to include two calls to action:

  1. Start shopping
  2. Apply for financing

For the first, provide image and text links to your Car Buying Service, ideally with no interstitial. Then, encourage members to apply for a loan. Remember, only 20% begin with financing, so accommodating both them and the 80% looking for a car is good business.

Direct the former to your Auto Loan page so they can gather information on rates, terms, and move on to the full application.

In the event a member goes straight to your Auto Loan page, ensure they learn about your Car Buying Service with a brief explanation and link.

The following flowchart is our recommended process on credit union websites:

Car Buying Service Website Flow

3) Responsive Site

Your website pages and process flow are ready. That’s great! Now, we need to ensure it looks perfect no matter how members visit. From desktop to tablet to phone, your site and car buying service need to be “responsive”.

This means the pages adapt seamlessly for the varying screen sizes and capabilities. Because who likes pinching their phone to see that tiny text?

80% of your members will be using a mobile device when car shopping. Consider adding a direct link to your Car Buying Service within your home banking app. When some of our clients did this, they saw engagement rise 30%!

4 out of 5 Shoppers Use Phone Auto Shopping
Note this is 5 years old. Do you think more or less people use their phones now?

4) E-mails

In our example, marketing efforts must drive at least 675 members to the website. It’s unlikely organic traffic to your website will be sufficient to accomplish your goal.

Given only 2% of your members are in-market for a vehicle at any given time (see footnote), you’re just not going to “accidentally” reach all of them when they log in to manage their finances.

Consistent, dedicated e-mails is the most effective marketing strategy.

Sidenote: I hear what you’re thinking. “If we send too many e-mails, members will unsubscribe, and we cannot have that happen.” We worked through this concern with nearly all of our clients.

Some credit unions do monthly dedicated Car Buying Service e-mails, and even then, experience negligible unsubscribe rates. It’s about consistency and quality.

Members want useful content from you. If you present the value-proposition well, it comes across as useful. And there’s one piece we didn’t yet mention…

First, your team is busy. Obviously. Your Car Buying Service provider can help. (I mean, our partner does…what does your provider say?)

Ask them for e-mail and website templates to save development time. These should have pre-approved language on the Car Buying Service, as well as seasonal or holiday-themed content. Simple, right?

Second, while sending messages to your entire membership is great on occasion, it’s not the only path. All of our clients use their MCIF to target those members most likely to be in-market. Here are some member criteria they use:

  • Loans nearing termination
  • Loans nearing average runoff
  • Cars of a certain age

You can also target e-mails based on credit scores (thus, able to be approved for a loan), but we believe credit unions exist to help empower everyone on their financial journeys.

As such, you understand there are other factors which may mean more than a simple number. This can start a great conversation to help meet lending goals while also truly serving your members.

5) Referrals (Staff & Social Media)

Newsflash: People use social media. Also, people love recommending to friends and family. Needless to say, incorporating your social media channels into a marketing campaign is a no-brainer.

Now that we’re on the topic, how are you about guiding members to your social media? Do you provide links on your website pages (I mean beyond those in the header or footer)?

Take a look at how we guide visitors to connect with us through their preferred manner (phone, fax, LinkedIn, Twitter, or contact form):

GreenProfit Contact Section Home Page
Make reaching out, engaging, and sharing easy for members

Why do this? Because your website is how members use your services. Social media is how members share your services. Both are essential to your growth.

Whether on Facebook, LinkedIn, Twitter, phone, e-mail, or in person at a branch, staff training encourages every member interaction to be a referral to your Car Buying Service.

6) Marketing Allowance

Members love deals. Whether it’s cash back, loan discounts, or some other incentive, they draw attention. Check with your provider. Some offer marketing allowances which may subsidize some of your costs of promotion (including subventing your loans, as an example).

7) Follow-Up

With a specific goal and a marketing plan to get there, what’s left? A process to make it all work.

Members using your Car Buying Service might get pre-approved. They also might not. It’s up to you to earn their business. Here’s a daily process which works well for our credit union partners:

  1. Compile Prospects: Depending on how you access them, this may need some degree of automation. Some systems send individual e-mails, others allow for a daily CSV download. Another option is an automatic secure data transfer with your provider.
  2. Processing: Import this member data into your CRM. Now you’re tracking! Let’s get a quick “Thank You” e-mail out to those members, along with a reminder to get pre-approved. If your system has the ability, linking this with your LOS lets you flag Car Buying Service originated applications (and send customized messaging automatically).
  3. Follow-Up: The e-mails went out. Your outbound team can also call all of the members using the service. If they don’t get an answer, a simple, “this is Jen from your credit union and here’s why I called” text or e-mail personalizes the experience.
Woman on Gold iPhone
Your members might answer. And they might not. You’re connecting with them either way.

All our clients following the above steps increase their auto loan applications. The factor that best determines their results? Consistency. Sticking with the process helps keep loan numbers growing and minimizes “losing loans to the web”.

8) Tracking & Ongoing Guidance

A common challenge amongst credit unions using a Car Buying Service is tracking. The system and their process may be working great, but they have no way to gauge results!

We help our clients see what members are doing in simple data points. Then, they use their existing tools to match Car Buying Service activity with applications and booked loans.

The easiest way to do this is the following:

  1. Upon receipt of prospect data, import it into your system with a “Car Buying Service” flag/custom data field.
  2. For loan applications, match this with your member CRM data, thus revealing the flagged field.
  3. Use field to determine applications and booked loan rates from your Car Buying Service.

If unable to create a custom data field, we recommend exporting a list of booked loans each month, and comparing with Car Buying Service Prospects. Tools like Pivot Tables in Excel take the manual labor out of the task.

9) Refinance Opportunities

With any Car Buying Service sending members to public dealers, there is a chance they will decide not to finance with your credit union (we’ll ignore the ⅓ of people who lease, as most credit unions don’t have leasing programs).

This is what happened to me on my last car purchase:

I had every intention of financing with my credit union. Then the dealer explained I could only get additional manufacturer discounts if using their financing. The Car Buying Service said this was a possibility. So I bought the car, financed with the manufacturer’s recommended platform, and drove home. That night, I began the refinance process with my credit union. A week later, my loan transferred and the rate dropped 2%!

How many of your members don’t know this? Each month, match your Car Buying Service Sales report with booked loans and uncover refinance opportunities. Increase lending revenue while offering members better rates!

10) Staying in the Fast Lane

Your Car Buying Service can run itself. However, to get the most from it, you need a concerted focus from marketing and lending.

We recommend scheduling monthly meetings with your Car Buying Service representative to review results, provide a monthly performance analysis, and share guidance to maximize loan growth.

A New Road Begins Here…

Online Car Buying Services are wonderful tools for loan acquisition efforts. But, as with any tool, it must be used correctly. We hope this tutorial helps you get the most from your program, delivering value to your credit union and exciting your members.

Our credit union partners enjoy this experience today. The TrueCar Car Buying Service gives them the largest national dealer network, a generous marketing allowance, and ongoing training and guidance. We’d love to help you determine if this program is right for your credit union.

Learn more:

Footnote: Registered passenger vehicles: $263.6 mm Wiki (Statista)
New cars sold: 17.6mm – Cox Automotive 2018 
Used cars sold: 42.7mm – Statista – 2017

Based on ratio of car sales to total, it represents about 22%. 22%/12 months ~ 2% per month.