[Editor's note: This is a third-party blog. HousingWire did not coach the author and does not make/endorse any recommendations included therein.]
Millennials and the general market, alike, adjusted their approach to purchasing decisions, along with their expectations of a good service experience.
We all expect to be empowered through our lenders to make informed decisions through mobile and digital communication. If convenient options are not available, we’ll find someone else who offers them.
Today’s consumers want options, and companies must innovate in order to remain competitive.
In the transportation and hospitality industry, we witness the speed with which consumers flock to online platforms.
Companies such as Uber and Airbnb utilize digital technology to turn entire industries on their heads, and drive out all major competitors.
Listed below are five areas lenders must consider in developing a modern lending experience.
I include examples of companies that provide services in each area in order to provide some additional guidance and context. However you should research all available options to identify which technology company is best suited for you.
(Disclosure: Companies listed are not clients of mine and did not pay to be included).
Approximately 80% of consumers are starting their home buying search online and over half from their mobile devices. Utilize digital marketing to reach your consumers where they are, and ensure your online presence exhibits the image you want to convey to your prospective customers. Most Millennial consumers will research you personally online before choosing to contact you.
First, assess your personal and business social media profiles to make sure they accommodate the nuances that convey trust and expertise. You can review a list of “do’s and don’t’s” in this handout.
Second, build your customer reviews page. Testimonials influence Millennial decisions, so ask for a review after every closing. More reviews are always better (A few negative reviews are expected).
Third, consider hiring a professional to manage your digital marketing strategy (or give it a shot yourself!) and utilize advertising channels such as Facebook Ads and Google Adwords to distribute compliant ads to a targeted audience.
Lastly, companies should consider utilizing software to encourage employee engagement.
Companies should adopt technology that allows them to deliver information digitally to their consumers.
Millennials are heavy researchers and want to access as much information as possible online to become informed consumers.
As digital natives, we spend approximately 1,200 hours annually online (nearly half of which is from our mobile devices). Therefore, education should be delivered in our native tongue: digital and mobile.
Companies like Mortgage Coach—which was named the number one mortgage app by USA TODAY—provide loan officers with the ability to share and compare purchase and loan options through their Total Cost Analysis app.
The home-buying process is complex, and the average consumer lacks knowledge of widely used mortgage industry jargon. Applications such as Mortgage Coach allow consumers to review mortgage information in a more digestible way in a digital format we understand. Mortgage industry professionals should utilize tools that allow consumers to:
- Review their options independently from the loan officer
- Demonstrate obvious transparency around rates and their loan options
- Deliver personalized videos that walk the borrower through their options.
3. Customer mobile application (front-end user experience)
A major key to success for the loan officer is providing information to consumers in a convenient way throughout the borrower experience.
While today’s borrowers want a personal relationship with their loan officer, they have become accustomed to having immediate access to information and service. By providing customers with a mobile app, you can increase your productivity by leveraging the app’s capabilities to provide improved information, along with improving the overall customer experience through convenient access.
Utilizing a mobile app like Simple Nexus allows the borrower to share his/her information (securely scan documents, complete application, etc.), quickly connect with their loan officer, receive up-to-date pricing information, and retrieve status updates on their loan—all conveniently from their cell phone.
Most companies like Simple Nexus are inexpensive for lenders to use and provide immediate value to the consumer and loan officer. Companies that take advantage of enterprise options and encourage their use throughout their businesses typically observe improved compliance and a reduction of individual costs.
4. Loan origination system (LOS) software
As most of us know, the total cost of doing a loan from A to Z surged from $1,100 to $7,747. Loan origination systems are archaic compared to others industries. There are hundreds of tasks people in a lending institution do manually today, which could be improved through technology.
Companies like cloudvirga are creating systems that improve the origination process through innovative technology. Cloudvirga’s Chief Operating Officer, Kyle Kamrooz, stated, “Millennials don’t just need more transparency or a clean way to upload documents. They need those types of capabilities, but if you don’t fix the lender, it will still take 39 days to close.”
5. Customer Satisfaction Measurement
In the business world today, marketing is all about building loyal customer relationships and generating referrals through exceptional, educational digital experiences. Millennials, in particular, are highly inclined to offer business referrals to individuals in their network when they have had a positive customer experience.
For example, according to a BCG study, Millennials are far more likely than Baby Boomers to share their support for a brand on social media with 52% saying they will post “likes” for a brand.
Instead of blindly guessing at what areas are effective, find ways to evaluate your methods.
Ask your customers to always leave a customer review on Yelp, Zillow and Linkedin and take note on what areas your customers comment about. Also ask for personal feedback where they can provide honest and open commentary about their experience.
For a more thorough approach, consider software like MortgageSAT, which measures customer satisfaction and provides insights as to what areas can be improved among everyone involved with the consumer’s process.
One of the Founders of MortgageSAT, Garth Graham, who is also a Senior Partner for STRATMOR, states, “These insights have guided companies to change their company culture and adjust their customer experience, which has driven big results. Having a standard way to measure customer satisfaction among all people involved in the loan process makes everyone accountable to driving a better process for the customer.”
Given the recent growth in the Millennial homebuyer market, it should be clear to your business that the Millennial homebuyer presents the next great wave of opportunity for mortgage lenders.
If you want to position your business to ride this wave and capitalize on this new market ahead of your competitors, make sure that you are making changes to your marketing and business strategies in a way that clearly aligns with the areas that Millennial homebuyers care most about.
While the aforementioned millennial outreach strategies may require an upfront investment in terms of additional time and money, the return on your investment will be significant.