There are an ever-increasing number of ways to reach out to potential and past clients, and originators can run themselves ragged trying to use every available method to increase borrower engagement equally. Knowing how different borrowers want to be reached and how often they want to engage can give originators some much-needed insight as to where to focus their efforts.
How much communication is too much communication, and is there such a thing? Borrower expectations have changed over the years, and those expectations vary from one generational demographic to the next. A major theme of Ellie Mae’s “2019 Borrower Insights Survey” is around the increased options for communication between borrowers and lenders, as well as preferences for frequency and type of communication among borrowers.
Preferred communication frequency
How often do borrowers want to be contacted?
In the last year, lenders reached out to millennial buyers at least 11 times on average during the loan process, which was more than twice as often as they reached out to baby boomers. While that level of contact might seem like overkill, more than 10% of millennials say that there wasn’t enough outreach. That’s more than six times as many baby boomers felt the same way.
While one interpretation is that younger generations are likely to want more communication and contact in general, older generations are more likely to have gone through the homebuying process more than once, so in general are more familiar with the transaction and don’t have the need for frequent communication.
Originators can take this into account when customizing their CRMs and/or automated marketing campaigns, as well as their plans to contact and update buyers during a transaction. Younger and/or newer buyers like more contact, and older/more experienced buyers require less.
Preferred communication methods
But which methods do borrowers like to use the most?
Even with the proliferation of text messaging and the longevity of in-person communication, email is still incredibly relevant. Fifty-six percent of both millennials and Gen Xers communicate with their lender often via email than baby boomers, 52% of whom only communicate with their lenders sometimes via email. Email communication isn’t coming at the expense of other communication methods, however. Fifty-seven percent of millennials said that they are more likely to communicate with their lender by phone often, compared to 51% of Gen Xers and 41% of baby boomers.
Originators might be surprised to discover that both millennials and Gen Xers were three times more likely to often communicate with their lender through online chat than baby boomers, who used the chat feature. Gen Xers communicated with their lenders via chat (23%) and through the lender’s online portal/website (33%) more frequently than millennials, Gen Xers, or baby boomers. Despite the power of in-person communication to build partnerships and trust, once those relationships are established, it seems as though they’re less important to borrowers over time.
“While millennials tend to make many purchases day-to-day with a simple click of a button, it was interesting to see that 79% of this generation of borrowers reported frequently meeting in person with their lenders, compared to 61% of baby boomers. This indicates that younger generations of homebuyers need more frequent communication and interaction with their lenders to support them across all channels through what is likely one of the most significant financial milestones of their lives: obtaining a mortgage,” the report reads.
Still, originators do need to have a communication strategy that spans various mediums. Rather than younger generations eschewing older methods of communication for newer ones, recent and prospective buyers of all generations rely on multiple methods of communication to interact with their lender: email, phone, chat, mobile app, in person, direct mail, text, online portals/websites, and even fax all have their place. In the survey, both millennials and Generation Xers indicated that they used all nine forms of communication to interact with their lender compared to baby boomers, who used 4.5 methods on average. Following that trend, younger generations used almost three of the nine methods of communication frequently, while boomers used only 1.5 frequently, on average.
Frequent communication across multiple channels between lenders and borrowers has increased by approximately 20% for those who got a mortgage within the last year, compared to borrowers who obtained a mortgage in the last 3-5 years.
“As more millennials enter the housing market, it will be imperative for lenders to prioritize the use of all available technologies, digital tools and communication channels to foster strong borrower relationships and provide needed education as well as ease of doing business around each step of the loan process,” the report reads. “With most borrowers using between one to three different methods of communication frequently with their lenders, a customized approach for the individual borrower will be paramount to ensure a successful relationship and smooth closing.”