Are lenders missing out by not developing relationships with their customers?
The mortgage market has been slow to adopt some of the practices that other ‘customer-centric’ organisations routinely use to develop customer relationships and improve both retention and engagement levels.
In a changing and increasingly competitive market, lenders and intermediaries alike stand to gain by adopting approaches that will improve loyalty, increase retention and, in turn, deliver competitive advantage .
There are two big opportunities for lenders and brokers:
Improve application and on-boarding experience and processes – these are critical in determining customers perceptions of both brokers and lenders and their likelihood of subsequently returning or remaining;
Develop communication strategies that will improve and enhance customer perception and ultimately retention.
The broker and lender experience the customer has arranging their mortgage is a critical determinant of whether or not they will return to that broker or lender for a subsequent mortgage .
These processes are seen by customers as ‘clunky’ and un-customer friendly. The opportunity then is to improve the customer journey to receive payback in terms of improved retention levels.
Whilst many lenders contact borrowers at maturity, most do very little to communicate with borrowers outside the statutory regulatory minimum requirements.
Brokers too have also been slow to adopt customer relationship building techniques, traditionally focusing on developing new business and not on creating repeat business .
Mortgage customers want post-purchase rationalisation that they have taken out the best mortgage and the broker has recommended the right lender;
For lenders and brokers alike, developing positive customer relationships is key to the customer consciously giving them first refusal when the time comes to change their borrowing arrangements;
New entrants need for them to properly introduce themselves to customers and develop positive relationships to give them the confidence that they are the right lender for them both now and in the future;
Traditional lenders too can no longer rely simply on generating increasing levels of new business and need to focus on developing positive relationships to increase retention;
Brokers too can benefit by adopting better CRM approaches to develop repeat business.
In an age when organisations increasingly compete based on the experience they provide to customers, the opportunity in the mortgage industry is clear.