After speaking at a conference last week on hiring and recruiting, my general impression of the mood in mortgage banking is that it is subdued and apprehensive. Attendees raised concerns about a number of issues from coping with low revenue and volume to productivity challenges to selecting good originators. Most said that this year will continue to be difficult for them. I also heard talk by some lenders that if Amazon enters the mortgage space, the financial industry as we know it will be gone. This is not a rosy picture.
In the last several months there has been a lot of discussion about technological improvements in our industry, but I think that lenders and originators need to focus their efforts on delivering an outstanding customer experience. There is no reason why buying a home should be a torturous experience for the consumer.
In my view, redesigning the mortgage process to be more consumer-friendly and having quality originators who can act as trusted advisors should be top priorities for every company. Somehow, management teams have forgotten that our financial challenges are rooted in lack of referral business after the initial transaction. This is not unique to the mortgage industry. Realtors have the same issue. According to recent NAR data, 82% of homeowners said they would work with their prior Realtor again. However, only 23% actually did. Why didn’t they work with their prior agent? Either the real estate agent didn’t stay in contact with their customer with valuable content or they didn’t “wow” them enough to establish a trusted relationship.
When companies deliver weak customer experiences, they are forced to get on the new customer acquisition treadmill. Finding new customers is not only an expensive endeavor, but an exhausting one. Just ask any mortgage manager who buys leads!
So, what defines a great customer experience? This is often where the disconnect starts. When customer experience is based on old ideas, companies can inadvertently make a negative impression. For example, it is common practice to emphasize time to close — if it is faster, it is always better. What happens if faster is unpleasant? An unpleasant experience does not make a good customer experience regardless of whether the lender met the closing date. By the way, customers expect that the lender will close on time. The same goes for working with an originator who has integrity. Consumers expect that. The list goes on. This is why companies must continually analyze their current customer’s behaviors and wants and adapt their selling strategies accordingly. The reason? What constitutes a good customer experience is not static and continues to evolve.
As a frequent business traveler, I stay at a lot of hotels. Most are OK and frankly, underwhelming. But recently, I actually had a terrific experience at The Hotel at University of Maryland. For a large hotel that is a conference center, they were friendly, personal and went out of their way to help me when I misplaced my glasses case. They were a complete joy. Similar to mortgage banking, the hospitality industry is operating in a highly competitive marketplace with tight margins. One of the reasons Airbnb has become so popular is because most hotels are delivering average customer experiences. This underscores the point that consumers will inevitably opt for an alternative to an average experience no matter what the industry.
Delivering less than a stellar customer experience is dangerous territory for financial firms and their sales professionals. Time after time, companies that failed to meet and exceed customer expectations (think Blockbuster, Sears and Macy’s) lost their financial viability. Today, customers find it easier to make purchases online than deal with being ignored by a salesperson or given the wrong information. Don’t be on the wrong side of history. Make sure your company and originators are providing an excellent customer experience with every transaction.