It seems every conference and industry newsletter discusses the latest technology that will make sales organizations more successful. Whether it is the integration of Ellie Mae with Blend or Day One Certainty, a technological solution is often touted as the cure-all for the industry’s issues. Certainly, speed and efficiency are important when providing a product or service. There is no question that consumers’ expectations have forever changed with the prevalence of on-demand products.
But what is not being addressed is that every lender has access to similar enhancements from tech vendors and thus, a technological improvement doesn’t constitute a real competitive advantage. Of course, lenders that don’t update their technology can be beaten by those that do make enhancements, but ultimately, companies that fail to invest in new technology are on the road to irrelevance anyway.
On the other hand, developing unique technology is expensive and more importantly, requires a vision of forecasting what the consumer wants in the future. This is not easy. Just ask the manufacturing sector that brought the world Sony Betamax, New Coke and Apple Newton. All flops.
When lenders brandish technology such as their speed in closing a loan, it really doesn’t impress as much as before because speed has become a standard expectation that is only noticeable in its absence. Slow processing is a definite problem for lenders but having the same speed as everyone else does not translate into a real differentiator.
In addition to high tech, consumers also require high touch during the sales cycle. High touch is about forming a relationship with sellers and buyers in a meaningful way. This is the primary role of the loan officer and account executive. Having a real relationship with customers isn’t easy either. Similar to the technology issues, what is involved to deliver high touch can be daunting since it requires each originator to deliver a quality customer experience with every loan. Sales organizations that can consistently deliver high touch along with high tech have the upper hand against the competition.
The core principles of high touch include being personal (know my challenges and preferences); conveying valuable insights (resolve my problems) and protecting the customer’s interests (not just today but long-term). Unfortunately, these principles are not things that mortgage bankers consistently do well. Certainly, top originators do deliver it and are successful as a result. Other originators do not and that is where the problem lies. The challenge for lenders and originators is executing a high touch approach with high tech and scaling it. Typically, high touch has always meant a business had to be small and local. This is not true anymore because of new technology.
Traditionally, mortgage bankers’ reason for being was that they had better service than banks and savings & loans (remember them?). This typically meant closing a loan faster (sound familiar?) and enabling a consumer to actually talk to a mortgage originator.
In the past, many banks operated under the premise that the customer would always be there for them and would come to them for their lending needs. A classic example of this false assumption is when Coca Cola introduced New Coke to the world. From a sales standpoint, it was a disaster of epic proportions. The fact is that consumer behaviors and demands are continually changing and it is up to the retailer to understand what their customers want.
As any marketing professional will tell you, consumers are always looking for “new and better” products and services. With vendors selling the same tech products to everyone, it is clear that technology alone isn’t enough to earn the customer’s business. In my view, high touch is what can distinguish one seller from another. Lenders and their originators who have the right combination of high tech and high touch will be the winners in this difficult marketplace.