Kabbage, an online loan brokerage company, offers quick loans to businesses with little or no credit. With super fast turnaround times and their simple online application, this may seem like the right option for many businesses. However, what Kabbage doesn’t tell their applicants is that they will pay 2, 3 even 4 times the national average in annual interest on their loan. Business owners want to be seen as people, and with Kabbage, they are too often just a number in a sea of applicants.
Brokerages like yours can compete with Kabbage by offering your clients the “human factor”. A follow up phone call, a direct line to their primary broker and trusted advisor, even a Christmas card can make all the difference for a business owner. When it comes to choices, there are many. So how do you compete with a huge company like Kabbage?
Do NOT fight their strengths
Chances are that Kabbage has a larger brand name, more national media coverage, and more recognition than your brokerage. So don’t talk them down. Instead, acknowledge their strengths and values to certain businesses.
Kabbage IS a very quick, easy to use platform and can be a great fit for those businesses that are in need of cash with a 24 hour turn around. However, these businesses must be willing to pay 20-40% annual interest on those loans and be aware of the standard $100 late fee. For a business owner, this little bit of information could be the deciding factor in their brokerage choice.
Emphasize your strengths
Most businesses won’t literally crash and burn within the next 24 hours and would generally prefer to find financing that saves them 90% annually in interest. These practical companies make up the majority and are the ones that your brokerage can be of most value to. Your ability to offer low interest loans with a variety of repayment options will make your brokerage stand out to potential clients.
Educate: define the playing field
When clients are researching the playing field, the odds can get stacked in Kabbage’s favor. They have so many landing pages and are first in Google searches for “small business loans”. This is where you step in by educating applicants on the difference between a brokerage like yours and one like Kabbage.
Kabbage takes a one size fits all approach. They have a very limited variety of loan types, which means that they can’t get the best deal for many companies. You can explain to clients that: “We, on the other hand, work with hundreds of different lenders and offer well over 50 different types of loans. This allows us to get clients the best deal and lowest rates available because we customize the loan to match exactly what you need.”
Shift the Focus
You will need to frame the comparison between your brokerage and Kabbage, but the sales magic can really happen only when the client is doing the talking. So after the playing field is set, turn the spotlight on them. Get them to weigh their own options by asking the right questions:
“So tell me exactly what you are looking to do with these funds?… Great, now tell me about your business…” The more they talk, the better job you can do in customizing the funding package to their needs.
Applicants become just a number in a large company like Kabbage and they often do not follow up with their applicants. So here is where you can leave them in the dust. Create a follow up calendar for each and every prospect that you speak with. Show your applicants and clients that there are real humans that they can call on and interact with whenever they need assistance. A month later, when they still need funding, you are going to be the one showing them that you still care.
When going against a big company like Kabbage, it’s best to not compete directly. Instead, focus on your own strengths and values. Shine with variety and keep the human elements front and center. You’d be surprised how many business owners would rather work with a company like yours than a huge one like Kabbage.