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Marketing & Positioning the “Second Look” September 30, 2010

Posted by David Dirks in business strategy, marketing.
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Talk about making lemonade from lemons, this is just pure marketing genius.  Banks, under pressure to expand lending, especially to small businesses who’ve seen their lending resources just about dry up the recession, have created the ‘second look’ option.  The second look option allows either the bank or the borrower to ask for another review of their loan request after the first time it is turned down.

Ok, let me see if I get this straight.  I ask you for a business loan and you say ‘no’.  Then, if I want, I can say, ‘hey, look a this loan request again, I think you made a mistake’.  On the surface, it seems that this ‘second chance’ on a loan makes sense.  I mean people who work in banks can perhaps overlook something or calculate a ratio wrong, or interpret an underwriting policy wrong, and on and on.

Of course, what borrower, after getting their loan request rejected, wouldn’t want to take a chance on another look from the bank?  They might get lucky.

Of course, the banks are not stupid.  They see the political pressure they are under to lend more and so they realize they can market this ‘second look’ and look like champs.  Wait a minute.  The bank reviews a loan, says ‘no’ and we should be grateful for the ‘second look’?

It just begs the question:  Why didn’t you work to get my loan underwritten and reviewed right the first time?  Why don’t you build the ‘second look’ into the ‘first look’ as a process?

Is the ‘second look’ just a substitute process for trying to get it right the first time?  I believe so.

In the meantime, the banks have brilliantly positioned the ‘second look’ in print ads as the white knight to help turn ‘no’ into a ‘yes’.  It reminds me of the Champion lending ads of years ago:  “When Your Bank Says No, Champion Says Yes”.  Remember that gem?  It built quite a lending empire on the backs of a lot of bank ‘no’.

The marketing of the ‘second look’ is excellent marketing by any standard.  When you can take a broken lending process and thread it into gold, you’re one smart banker.

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