Apple. Starbucks. Netflix. Trader Joe’s.
These are just a few brands known for their sizeable bases of loyal customers. More than likely, you have a list of your own favorites – companies that exceed your expectations and inspire a sense of allegiance. These companies deliver products and services that delight you, and your satisfaction means you rarely consider competitors.
But what is it about these companies that keeps you coming back? What do they do, actively or passively, to retain you as an enthusiastic customer? Often, mortgage servicers forget to step into their customers’ shoes to ask these important questions. Mortgage servicing may not be as refreshing as a Frappuccino, or as enticing as a bingeworthy TV series, but it’s a critical part of the homeowner journey – and thus, a cornerstone of the American Dream. Who says it can’t be a unique and satisfying, customer-centric experience along the way?
The truth is that retention is key to long-term mortgage servicing success – especially in today’s highly competitive and rapidly changing market. Many servicers misstep by focusing too much energy on acquiring new consumers, and not enough on retaining existing ones for refinance or home equity opportunities. The result can be both expensive and ineffective for your servicing operations.
Data shows that it costs a servicer five times as much to acquire a new customer than to retain an existing one. What’s more, recent data from Black Knight’s Mortgage Monitor shows that only 18% of refinance consumers stay with their current servicer – a startling statistic amid unprecedented refinance volumes.
Fortunately, servicers have significant opportunity to improve retention by honing their customer experience efforts. The following elements of the servicing experience can contribute to higher customer satisfaction, and in turn, stronger, long-term consumer relationships.
Next-Level Customer Service
Not surprisingly, lackluster customer service tops the list of reasons customers choose to refinance with another servicer. Today’s consumers expect much more than a friendly voice on the phone. They want fast access to someone who’s knowledgeable and already familiar with their needs. For example, if a customer just called yesterday, the representative answering today should already have a level of familiarity with their concerns. Don’t expect customers to explain their needs from square one every time they initiate contact with you. A customer who has been sending monthly mortgage payments will expect their servicer to know who they are and what property they’re calling about, while anticipating their needs from the start of the conversation.
How effectively are you staying in touch with your customers? Customer communication can make or break the customer experience and directly impact retention efforts. Customer-centric communication spans far beyond monthly statements and due diligence letters; it enhances the servicing experience by proactively sharing personalized, meaningful information – when and where it matters to customers. In the mortgage industry, we are quick to launch communications related to compliance requirements, but that shouldn’t be the only driver of our communication with customers. We must take advantage of every opportunity we have to delight them.
Leverage Portfolio Data to Deliver Personalized Offers
Many servicers also miss opportunities to keep their brand in front of their current customers throughout servicing. This means that when the time comes to refinance, these individuals may not even think of their current company, especially as competitors contact them regularly with compelling, flashy offers. Servicers have a significant advantage when it comes to retaining existing customers, though, thanks to the valuable data within their servicing portfolios. This data is the key to proactively determining detailed refinance and home equity offers, so you can engage customers with informed, personalized offers that outshine the generic ones of your competitors.
Real-Time Information, Served Digitally
Throughout servicing, customers want continuous engagement and access to real-time information, including loan, home and neighborhood information available via mobile apps or the web. Advanced, digital capabilities can amplify the customer experience by giving customers the power to effortlessly make payments, understand home values, and calculate “what-if” scenarios related to refinancing.
Digital capabilities can serve an important role in a servicer’s ability to provide seamless customer service through varying regulatory and economic environments, too. Throughout the COVID-19 pandemic, many consumers had to explore assistance options and forbearance to manage financial hardship. Digital, self-service technology proved to be a valuable asset for many servicers, as it provided customers with a faster, less-confronting way to initiate the assistance process.
Extra Products and Services
Servicing may be the root of your business, but don’t overlook opportunities to offer customers additional products and services. Consider mortgage-relevant information that customers are already accessing elsewhere. Examples might include credit scores, automated valuation models or loan counseling services. Adding these additional capabilities to your website or mobile app gives customers more reasons engage with your company – ultimately helping you stay top of mind when a retention opportunity emerges.
Seamless Refinancing Experience
Finally, don’t underestimate the importance of delivering a seamless, customer-focused refinancing experience. Otherwise, you may risk losing your customer at the last minute. Avoid asking for redundant personal information you already have in your portfolio and enable customers to manage the process digitally from start to finish. Similarly, providing your loan officers with advanced technology can help them enable smooth, efficient processes.
Servicing retention is a complex process and improving it can’t be done overnight. However, by enhancing various elements of the customer experience, you can work toward moving the retention needle. For your customers, it’s not about the mortgage – it’s about the home. Focus on making the servicing journey seamless and consumer-minded, and you’re sure to earn loyal customers for life.