Cash & Loans Advice Blog

Taking a credit should be an intentional activity

The accountability factor in building trust relates to your own actions. You can’t control what someone else does, but you can control what you do. If you’re sensing uneasiness or an awkward feeling with a partner, ask yourself: “What can I do?”You can move along the Partnership Continuum by attending to your own accountability. The law of reciprocity—others tend to give back what they have been given—works in building trusting relationships. One of my friends signs his e-mail with this slogan: “No act of kindness is ever wasted.” In everything we do, intention is important—especially if that intention is “other directed.” Trust is an outcome of our inputs. Even the smallest gesture intended to be giving, respectful, supportive, encouraging, or sympathetic adds value to a relationship.

Building trust should be an intentional activity. And since the development of trust is such an essential aspect of successful partnerships, organizations should support its development. This takes planning. When we are intending to enter a partnership, we must engineer our performance so that we’ll do what it takes to increase trust.When we care enough to plan, follow through, evaluate, and redirect our energies if necessary, we’re using our Partnering Intelligence.

How to make your loan more effective

would be better buyers of the bond and buyers of protection to maturity to lock in the positive carry.

Factors that widen the basis (positive basis):

• Strong demand from protection buyers such as banks or hedge funds
• Bonds can usually be funded in the repo market at or around Libor.
• If the bond becomes special the investor holds a repo market option that makes the bond more attractive than the CDS and tends to widen the basis (short positions in bonds cannot be locked in for years because of a nonexisting repo market).
• Deteriorating credit quality and increasing spreads/basis volatility or equity volatility (CDS = high beta instrument).
• Assets trading below par, that is an investor who pays $80 for $100 face value has less credit exposure than a protection seller at par. Therefore, the protection seller would demand a higher premium (spread) than the bond.
• Convertible bond issuance may lead to hedging credit risk to unlock “cheap” equity volatility.
• The cheapest to deliver option is a structural factor, which tends to widen the basis (protection buyer is able to deliver any qualifying loan/bond).

The default basis can also be viewed as a risk indicator. In general, the sale of default protection should be more attractive than purchasing a bond when the basis is high relative to the equity volatility of the firm and vice versa.

Techniques to boost internet credit options

Seven decisions can help to drive sales online:

Generate participation, ownership and commitment within the whole company and among senior managers in particular, so that a co-ordinated, cross-functional approach is taken that increases value for the customer and reduces costs for the business.

Ensure that the online sales strategy is all-embracing, enhancing existing activities and learning from past experience.

Simplify the customer’s experience so that the sales process is streamlined, with barriers to purchasing removed.

Ensure that the website is sticky and compelling. You want customers to remain at the site when they arrive, and to return frequently.

Focus on flexibility and efficient personalisation so customers are able to buy exactly what they want, how they want it. Avoid duplication and past mistakes; for example, avoid a complicated, high-cost solution when an effective, low-cost alternative is available.

Prepare internally for the changes that an internet sales strategy will deliver so that the company avoids investing too much, too little, too late or too soon.

Building credit loyalty online

The internet makes it easier to achieve three key elements of customer loyalty: making it easy for customers to do business with you, satisfying your customers and ensuring that they come back. Furthermore, this can be accomplished at a fraction of the normal cost and, by building greater customer loyalty, sales costs are often reduced. There are several factors in building customer loyalty online.

Customers will come back to a website if they feel comfortable and believe it is relevant to them, but more needs to be done to develop customer loyalty. Customers must feel that the website is simple, helpful and intuitive; in other words, it must be easy to use.

The website must be responsive, understanding what customers want without marching them along a predetermined course. (This can be bad enough when a sales person does it; when a computer steers you in an unwanted direction it is particularly annoying.)

The information should be accurate as well as immediate. Customers should be offered the chance to question or change choices before confirming details without worrying that the service will be incorrect.

The website should be valuable, offering an element of service that is unique and cannot be found elsewhere, with options that are likely to suit the target customer. If an organisation can include all this in its website, the likelihood is
that returned shipments, adjustments to orders and dissatisfied customers will decrease, combining cost reduction with an increase in customer loyalty.