Key strategies for retaining business

Giving customers a "wow" experience brings them back for more

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Do the majority of your past customers return to you for their next refinance or new home purchase? Are these clients referring new leads to you? While reaching brand new customers is important, the database of clients that loan officers already have a relationship with is an enormous source of production. If new business is not coming out of existing customers, it’s time to reevaluate.

When it comes to retaining clients, every mortgage professional needs to know two things:

1. Their database is their most valuable asset, and

2. Customers have to be ecstatic about doing business with them because these customers are the lifeline of future business.

They must not miss out on the opportunity to create a “wow” experience for their customers!

The importance of retention

Research shows that retaining current customers is actually more beneficial to business than adding new buyers. In fact, acquiring a new client can cost as much as five times more than retaining a current one. By reducing their customer defection by just 5%, loan officers can increase their profitability between 25% and 125%. If they are not working diligently to retain their current customers, lenders are leaving money on the table.

So how much of an originator’s database should be returning to do business each year? A survey by Merrill Lynch found that 20% of current homeowners annually obtain a new mortgage, either for a new home purchase, a second home/vacation home, a refinance, or a line of credit. The earnings from this percentage could be huge. If a loan officer’s database is 500 customers strong, 20% would be 100 customers. If the average commission is $1,000 per loan, they are potentially losing $100,000 a year if they are not retaining business!

Each client is an incredibly valuable resource. Consider their lifetime value – their repeat purchases and the referrals they can provide throughout their life. If each customer refers only two new customers, and then those new customers in turn refer two more, lenders will see their business grow exponentially. By wowing clients and creating “raving fans,” mortgage professionals will develop a long-term source of business that will have a dramatic impact on their production.

The concierge checklist

To create a “raving fan,” loan officers can establish a relationship with their customers that makes each one feel appreciated and special. Create a Concierge Checklist, adding simple touches to each customer’s experience that help them to understand they are more than just another applicant.

If clients come into the office, have a personalized welcome sign, make sure you or your assistant greets them by name when they arrive, and have snacks and beverages available for them and their guests while they wait. One of the most impactful steps you can take is having the customer complete a personal questionnaire before they arrive in the office. Have them give some details about themselves, like family members, pets’ names, hobbies and social media information.

Loan officers could also provide the customer with a “Who is your Loan Officer” one-sheeter that contains some family pictures and interesting facts about the professional they are going to be doing business with.

These two simple touches create a connection between the lender and customer, allowing them to find common ground and develop a more personal relationship. In our competitive landscape, it is easy to differentiate yourself as very few loan officers are truly focused on the customer experience!

 Perfect loan application

Forming a connection with the customer is the first step. By following up with a perfect loan application, loan officers build trust. To achieve this trust, a sales team must define what the perfect application looks like and document the steps leading to that point.

Lenders could have their processing team rate the quality of the loan applications they receive to ensure each document is completed flawlessly. Processors are the best team members to find the necessary areas of improvement, and implementing their recommended changes will give customers a stress-free, seamless loan application process, leading to more referrals.

The team’s commitment

In order for a team to commit to wowing clients with a personalized customer experience and perfect application, a mortgage professional may want to first wow their team. This starts by really getting to know every team member. What are their passions outside of work? Having them fill out a questionnaire, not unlike the one intended for clients, is a great way for lenders to learn about their team and find out how to provide something special and personal for them.

Team members are a business’s internal customers. When they have a “wow” experience at work, they will provide that same experience to their clients.  

Customer problems

The customer experience is not based solely on how problem-free it is. More importantly, when problems do arise, how are they handled? Customer complaints provide originators with a huge opportunity. When a client feels their expectations have not been met, the effort a loan officer puts into resolving the issue will speak volumes about their commitment to the customer relationship.

This dedication to meeting the customer’s need is what creates a “raving fan.” Additionally, these situations help loan officers see gaps in their process that need to be revisited and revised.

Pipeline review process

Constantly reviewing this process is an extremely important step toward retaining business. Taking a daily review of operations is vital if loan officers want customers to consistently have a “wow” experience. By creating an open dialogue with team members about what everyone can do to improve, lenders ensure their process is constantly being tweaked and perfected. Processors can share areas of review with their loan officers, and vice versa. When everyone is accountable, everyone can grow until they reach their full potential.

The final “wow”

Once all the other steps have been completed, mortgage professionals still have one final way they can wow their customers. Marking the closing as a special event by sending a handwritten note and a memorable, lasting gift lets the customer know that the lender values their relationship, not just their business. After all, buying a home is one of the biggest decisions of their lives. By showing support and celebrating with them, loan officers establish themselves as more than a business partner. They are now a friend.

So what steps are you taking to ensure you are retaining your customers? Don’t miss out on the opportunity to create a “wow” experience for every client. Once they know that you are dedicated to their success, they will be dedicated to yours! 

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