Are you marketing for acquisition or retention?

by Kimberly Greene30 Oct 2019

Any customer service professional knows that return clients and repeat businesses aren’t a given. Many mortgage originators, however, assume that clients will continue to return to them for their mortgage needs even though they haven’t made any extra efforts to ensure this is the case.

There’s a lot of gold in aged leads, and because they cost to much less to nurture than acquiring new business, it literally pays to work the database and specifically market to prospects for the purpose of  customer retention. Digital mortgage platform LenderHomePage shares some recent stats:

  • A 5% increase in mortgage customer retention can increase profits by as much as 95%
  • It costs an average of 5 times less to retain a mortgage prospect than it does to acquire a new one
  • The success rate of getting a current prospect to complete the full 1003 is 60-70%, versus a 5-20% chance of completion from a new lead
  • About 70% of consumers end a relationship with a company due to poor experience and customer service

Factors influencing consumer retention
There are several factors that influence retention for mortgage consumers, including:

  • Cost and Value
    Actual and perceived savings matter for client retention, as consumer perception relies on whether they believe they are getting more for their money, regardless of whether or not they are. 
  • Consumer Experience
    Traditionally, the mortgage experience has taken place via face-to-face interactions. Today, however, it’s imperative that their digital experience is just as great. A mortgage consumer’s first experience with a lender or originator is through a digital presence, whether it be a website or a social media feed. Ensuring that platform is easy to find, quick to load, intuitive to navigate, and includes a simple 1003 somewhere are just some of the factors that influence consumer retention. 
  • Saved Personal Details
    Single sign-on 1003 makes the mortgage experience hassle-free for the consumer, as well as more secure. 

Even though email doesn’t have incredibly high open rates, email marketing remains one of the more cost-effective tactics available with some of the highest conversion rates. The reason, according to LenderHomePage, is because the person is already interested in what the lender has to offer.

“The reason that it has one of the highest rates of conversion is that the prospect has already interested. They gave you their email, after all. That means they’re expecting to learn more about your loan services. And if you fail to email them regularly, you run the risk of losing them to another LO.”

Themes for email campaigns
The important part is personalization. General market updates and home tips are useful, even enjoyable to some readers, but information specific to their needs is most impactful. Don’t send refinance information to someone who hasn’t bought a home yet, or VA product info to borrowers who aren’t eligible for that type of product.

For prospective buyers, popular topics are the steps of the homebuying process and what they can expect from their originator during the process. These emails can include frequently asked questions in the form of Q&As or videos, how to prepare for moving, and a list of local resources and referrals that might provide useful during the process.

For borrowers who have completed their transaction, emails can include information on home maintenance and repairs, managing finances, renovation options, and future loan services such as refinancing and second mortgages. Even after the loan closes, keeping a client on some sort of email campaign can help keep the lines of communication open and increase the chances that they will remember their positive experience for referral purposes and/or reach out proactively when they experience a chance in their financial situation, goals, or needs.

Regardless of what you send, having some sort of call to action is crucial. Including a button that readers can click to start their application will get borrowers over the hump of reading the email and doing something about what they’ve read.

Don’t forget the feedback
Client relationships are for life, and showing appreciation for business is an important part of nurturing that relationship and boosting retention rates.

LenderHomePage suggests offering exclusive perks that clients find exciting, such as free ebooks, webinars, or workshops, and open them to both prospective and past clients. Invite referral partners such as financial advisors or realtors for even more value.

Another way to keep clients engaged is to consistently ask their thoughts and opinions on everything from service to contact frequency.

“Asking is the surest way to know what’s keeping your prospect on your list (retention), and what’s keeping them back from applying for the loan,” says LenderHomePage, adding that information can be ascertained from a simple survey.

Survey questions can include:

  • How would you rate your mortgage experience?
  • Is this information useful to you?
  • Have you contacted another lender about getting a loan? (If so, why?)
  • What is your favorite thing about our mortgage services?
  • Would you recommend our business to a friend?
  • Has any part of your experience with us exceeded expectations?
  • Is it easy to find answers on our website?
  • How useful has our mortgage app been in shopping for a home loan?
  • Do you feel more knowledgeable about home loans since connecting with us?
  • What do you like most about our newsletter updates?
  • What do you like the least?
  • Is there anything else you’d like to share with us?

Keeping open lines of communication can take a lot of effort upfront, but can really pay off in terms of increased customer retention, which means more business for less money.