Magazine article Mortgage Banking

Lock in Loyalty: What's Your Strategy for Meeting the Needs of Today's Mortgage Customers?

Magazine article Mortgage Banking

Lock in Loyalty: What's Your Strategy for Meeting the Needs of Today's Mortgage Customers?

Article excerpt

What do customers want from their mortgage lender? It's a question lenders have been analyzing for decades as they try in earnest to understand their customers and exceed their expectations. But here's the stark reality: In an industry where service matters, lenders have fallen short. [paragraph] Companies in the industry continue to receive numerous customer complaints, and the mortgage origination process in particular is perceived as confusing and lengthy. [paragraph] When it comes to mortgages, customers believe they should be getting the same experience they've grown accustomed to in other industries. For instance, many online retailers are differentiating themselves by creating a true shopping "experience" tailored to their clientele and by offering a service that is fast and easy to understand.

As mortgage lenders are increasingly focused on attracting purchase-money customers, those that deliver a truly distinctive customer experience are more likely to break away from the pack. The key is listening to what borrowers want and offering a relationship-based service that's built around their needs--a true experience that creates a loyal customer and differentiates your company from the competition.

But how do you put your finger on the strategies--both straightforward and subtle--that will win over customers who have more options than ever before when choosing a lender?

PricewaterhouseCoopers (PwC) conducted a survey of nearly 700 mortgage borrowers in the United States in late 2013. The survey included a mix of people who had recently closed their mortgage as well as people who had closed a few months before. This Experience Radar study provided invaluable insights that mortgage lenders can use to reshape the mortgage experience and create a loyal following. Here's how.

Areas of opportunity

A chance to rebuild your reputation: With higher interest rates and lower refinance volume now the new norm, a lender's focus on the customer becomes one of its big differentiators. According to PwC's study, reputation ranks as one of the top three reasons for selecting a lender, so market perception matters almost as much as a clear mortgage process.

The advantage of vocal borrowers: Most borrowers openly tell their lender about their experiences. This is a unique opportunity to collect and react to this feedback--an opportunity other industries don't always have. And with new regulatory expectations for customer service and complaint handling, the need to focus on what's driving dissatisfaction is even more important.

The impact of a lasting impression: Most borrowers own only a couple of homes and refinance only a few times in their lives. With a limited number of chances to interact with their lender, customers leave with a lasting impression. Whether that's a good or bad memory depends on the service provided. Other industries, such as grocery and retail banking, have more frequent opportunities to replace bad experiences with good ones, but mortgage lenders must make the most of their short window of time.

The ability to simplify where others haven't: Customers are increasingly comfortable with technology, but few mortgage companies take full advantage of this. Lenders have the opportunity to make the mortgage process more convenient and efficient. Other industries are raising customers' expectations by giving them more personalized options and control.

For instance, online retailers provide data-driven recommendations and enable one-click payments. Mortgage lenders should consider offering this same level of convenience and service that borrowers are now used to.

How do you take advantage of these opportunities?

Four themes emerged from our customer study that can help mortgage lenders improve the customer experience for homebuyers and refinancing borrowers. We'll take a closer look at each theme and the steps you can take to embrace your customers' feedback and give them what they truly seek. …

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