When deposits are already high and loans are where you are looking to focus, we recommend a unique way to build your loan portfolio: use the equity lines already approved and “on the books!” These are an important and rich source of new loan balances.
Reminding members/customers of the credit they have available to them—and how to access it—provides an impetus for customers to activate their lines.
Let’s take a look at a current client’s HELOC Utilization campaign to provide examples of what is possible for you. A Midwest client had the following mailing results in 2021:
Goals
- Notify customers of the availability of their equity line, including how much is available for use
- Engage households
- Increase line balances
- Remind customers with zero balances (on their line) how to use their line of credit
Methodology
- Query the FI’s database for customers with an existing equity line of credit
- Select customers with a certain minimum amount of line available (i.e. greater than $5,000)
- Understanding the amount of money available and communicating that information simply to customers is the secret to driving line usage
- Call the reader’s attention to the available balance
- Have the available balance in a position such as the ‘Johnson’s Box’ area at the top right corner of the letter
- Letter copy can point out common uses for the equity loans including home improvement projects, college funding, debt consolidation and even vacations
Mailing Package
- 8 ½ x 11” letter with 3” lift note included
- #10 window envelope
Results
- HELOC Utilization promotions can realize response rates of 15% or more, where a mailed customer has increased their HELOC balance
- Significant accompanying increase in line balances
- Significantly positive ROI
With the impressive response rates of the promotion, there are parallel increased balances as well.
You are already offering HELOCs to your member/customers. This is a great way to ensure they utilize their funds while you build loyalty with them.