Following the lead of employers, some lenders are more often looking into an applicant’s social media presence (Facebook, Twitter, Yelp and others) to learn more about their businesses. Checking profiles and customer review sites has become especially important for alternative lending institutions which tend to deal with higher-risk loans, typically small businesses and start-ups with little or no credit history.
Kabbage, an online credit provider based in Atlanta found that clients who have a strong relationship with customers on social media had a 20% lower delinquency rate than customers not active on social media.
Through your profile, lenders are trying to better understand how your company or your products are perceived in the marketplace, and make a more educated guess on your creditworthiness.
- The good news for small businesses is that generally, your happier customers are the ones more likely to become fans and to engage with your business online – at least when it comes to platforms like Facebook and Pinterest.
- Social media also allows your company to be more “human”. It allows you to communicate with your customers at a more personal level, which to a lender, can signify that you care for your clients.
- A good social strategy also helps you grow your business by promoting it further than your website alone can, and lenders might be more likely to see your growth potential.
- Most business owners don’t have an active social media presence, and it takes time and effort to build one.
- Most businesses are not highly engaging with the fans/followers/reviews they do have, and as a result, complaints, or negative feedback might not be addressed on a timely basis, or at all.
- Most business owners become defensive at negative reviews and prefer not to address potential problems with their products or service, sending the wrong signals to a potential lender.
- Poor online reputation is difficult to combat, so once it’s there, owners tend to have some explaining to do to potential lenders.
- Participate. Social media and online review sites are here to stay. You need to become involved and include these tactics in your ongoing marketing toolkit.
- Diversify. As in most things, you don’t want to put all of your efforts into one platform. You need to be active on as many sites as relevant and reasonably possible for your business. Specially, if you’re managing poor online reputation (like negative reviews on Yelp), building a positive image on different sites is even more critical.
- Manage. Once you create an online presence on social platforms, stay involved. Monitor daily if possible. Post as frequently as your budget allows. Whether you’re involved or not, your social presence will grow – so it’s better to participate and direct its growth!
It’s true. Online reviews are not anymore just for customers, they are also for lenders, creditors, investors, employees. Get involved!