In the current marketplace, with borrowers still coming to originators in droves because of low interest rates, losing referral sources or former customers doesn’t seem like a big deal. There is always someone else to replace them in a hot market. But if the MBA 2021 forecast is correct, lenders and originators will experience a 25% reduction in volume due to a drop in refinancing business. In a purchase money environment, customer retention will be mandatory for success in mortgage origination.
Originators who fail to make budgeted goals are often quick to blame lenders for not having the right product mix or pricing. However, research by well-known sales consultant Jeb Blount points to a different reason: “70% of customers are lost due to neglect.” Yes, neglect!
In recent conversations, many senior executives are concerned that originators are ignoring bread-and-butter referral resources during this refinance boom. They contend that before originators are even aware of any issue, referral sources move on to competitors, which compromises long-term production goals.
It is certainly understandable that originators would prioritize the easier refinancing business knocking at their doors. Marketing to referral sources takes time that producers feel they simply don’t have right now. Unfortunately, neglecting referral sources comes at a steep cost to an originator’s personal income.
Originators often believe that CRM emails or newsletters will suffice for meaningful contact but in most cases, these efforts are not enough to sustain a relationship. Referral sources want personalized contact. They want to feel listened to and important. Once a referral source or customer feels slighted, the relationship is difficult if not impossible to repair.
Sales professionals might assume that just because a referral source or customer hasn’t complained, that everything is fine. But, silence does not necessarily indicate that a customer is content or happy. Relationships are continually changing and evolving, whether an originator nurtures those connections or not. Every salesperson is responsible for building and maintaining these important relationships if they want to earn future business.
According to Jeb Blount, sales professionals must recognize that every relationship is at risk. In loan origination, the proverb “out of sight, out of mind” is especially true. Keeping in touch with referral sources can be tough amid overwhelming refinance volume, but it is critical that originators interact with customers and referral sources by phone or video.
The good news is that communication tools have made this task so much easier than before. Smartphones are ubiquitous and indispensable for getting the word out. There are even bulk voicemail services that can be used. The bottomline: Don’t let these relationships slip away! Commit the time and effort to let customers and referral sources know you value your relationship with them. Today is a great time to make calls and connect.