Which digital tools are borrowers most responsive to?

by Clay Jarvis14 Oct 2020

Data shows that borrowers give higher Net Promoter Scores to lenders who proactively approach them with relevant offers and updates than those who engage in a more reactive method of communication. But keeping client outreach as a priority has proven difficult for originators at a time when many of them are also trying to close a record number of loans.

“[T]he adrenaline that fueled service excellence in the early months of the pandemic is finally starting to wear off, and many lenders are now struggling to maintain high service levels,” writes MortgageSAT Director Mike Seminari in a recent report for STRATMOR Group, Efficiency and Happy Borrowers: Digital Tools Bring Both.

The highest Net Promoter Scores are still awarded to lenders who call their clients, but finding the time to make these calls during a real estate boom simply isn’t realistic for most originators. Seminari says relatively simple and affordable tools like mobile apps, borrower-facing web portals, and even good old text messages are often enough to keep borrowers informed and satisfied with the performance of their lenders.

As Seminari explains, a survey taken at a recent STRATMOR Customer Experience Workshop found that 50 percent of attendees are either employing or currently developing an enterprise texting solution for their borrowers. That means half the industry hasn’t yet got on board.

“If you’re not already thinking along these lines, you are actively falling behind your competition,” Seminari writes, adding that digital loan updates are rapidly growing in prominence. Three percent of borrowers in 2017 said they primarily received updates by text, mobile app, or by logging into their lender’s website. That figure is now 19 percent.

The increased usage of digital delivery methods has correlated with a steady rise in Net Promoter Score. In 2017, the three percent of borrowers who received their updates digitally gave lenders an average NPS of 65. In 2020, the average score is now 79.

“[B]orrowers are proving to be more and more delighted with these new forms of digital updates with each passing year,” Seminari writes.

Texting has proven the most dynamic area of digital outreach. Text is now the primary method of outreach for nine percent of borrowers, up from two percent in 2017, who give their lenders an average NPS of 82. Borrowers who still need to log onto a website for updates give their lenders an NPS of 70.

Seminari has three suggestions for lenders interested in improving their digital update game.

The first is to find a solution that reflects a lender’s particular needs and get a tool in place sooner rather than later. Half the nation’s lenders are already well on their way to doing just that.

The second is to incorporate borrower needs and opinions into any decisions made around customer outreach. A post-close survey, for example, should ask homeowners to name and rank their preferred update methods.

Finally, Seminari says originators, even those who are leaning hard into digital updates, should still maintain as much personal contact as time and capacity allow. A combination of calls, texts, and emails has proven to be the recipe for the industry’s highest Net Promoter Scores.

“Always consider automation a back-up plan as opposed to your main method of providing updates,” he writes. “The personal touch always wins the most repeat business and referrals!”