5 Reasons Why You Need a Mortgage Customer Retention System
The mortgage industry is notorious for having some of the lowest customer retention rates of any other industry. As applications are funded, a borrower’s profile is shoved to the side to make room for the next.
When we see this, we want to scream from the highest rooftops — don’t make this mistake!
Did you know that, on average, borrowers cycle through approximately 7-11 transactions within their lifetime? That’s 11 opportunities (perhaps less depending on where they are in life) to ensure they come to you perpetually.
➡️ Download Now: How Leading Lenders Are Overcoming The Borrower Retention Problem
When you mark their file as ‘complete,’ you miss a massive opportunity to lower costs by retaining your customers.
On average, for every new customer you acquire, you pay approximately $299. For example, say you have 50 new prospects, which equals $14,950. That’s a big chunk of change to dish out daily.
But, there’s a solution — a mortgage customer retention system.
I’m sure you’re wondering what this is. Let’s take a quick look at a proven system in the industry.
Case Study: Sales Boomerang
Sales Boomerang scours mortgage lenders’ customer databases for missed loan opportunities. By collating and analyzing numerous sources of borrower intelligence — including credit history, property listings, consumer debt load, loan payment history, accumulated home equity and major life events — Sales Boomerang helps lenders identify precisely when a past customer is ready for a loan again.
In many cases, Sales Boomerang identifies opportunities before the borrower is even aware they are a candidate for a loan and before they have a chance to shop with a competitor. But if
a borrower has already taken an action that puts retention at risk — for example, listed their home for sale or applied with another lender — Sales Boomerang notifies the original LO within hours.
That’s just the tip of the iceberg of what an automated customer retention system can do for your team.
Here are five reasons why it’s time to stop making excuses and start implementing:
Lower marketing costs
A 2022 study by Gartner states that most companies’ marketing budgets will be around 11% of their total budget. Regardless of where you land for what you can afford, there are ways to optimize to get the biggest bang for your buck. If you delve deeper into the case of a customer retention system, you’ll note that you can focus more on customer lifecycle tactics than outbound marketing.
When you can leverage marketing to your prospects that already live in your database, you can save money you might be spending on print or digital ads.
Case Study: Sales Boomerang’s Mortgage Inquiry
This alert will notify you when anyone in your database is shopping for a loan with a competitor. You might be asking yourself “Why? I did everything right the last time.” As much as we’d love to tell you that every transaction goes down without a hitch, it doesn’t mean your borrowers remember your name. They’ll presumably recall the lender’s name, but placing a specific LOs name is less likely.
Stop paying for empty leads
As the average age of first-time homebuyers increases, it’s common to find Millennials and Gen Zers sifting through Zillow, Trulia, or Redfin. They might be searching for their dream home (that they can’t yet afford), conducting price comparisons in nearby cities, exploring the option of relocating to a new state, or looking for the value of their current home.
Although customers might spend hours on these real estate websites, it doesn’t mean they are ready and willing to act.
Additionally, another mistake would be to rely on purchase leads. Purchase leads rely on consumers to self-report information they might not know. A recent study performed by LendingTree stated that 60% of Americans are unaware of their credit score.
Be a superhero to your customers
When you employ a customer retention system, you essentially own all of your prospects for the long haul. One of the best ways to secure your customers to come back to you again and again with every application is by providing impeccable service.
Case Study Example: Sales Boomerang’s Credit Improvement
Get notified when your customer has fixed their credit, which means you can increase your loan volume while putting a smile on a customer’s face. Because what customer doesn’t want to receive a call like that? You can turn every customer into a Customer For Life with this intelligence.
Pause before you purge those leads
As consumers, we all navigate through different lifestyle, financial and life events that prompt our actions and inactions. A completely uninterested or unqualified borrower today can experience changing circumstances or needs instantly. The key is to be patient and let big data and technology alert you when pre-established conditions are triggered, putting you in a unique position at the right time with the right message.
Don’t dispose of something you’ve already invested time and money in.
Call your customer with “Good News”
The market is constantly changing, and interest rates are in flux. Keeping your borrowers updated with the latest changes affecting their monthly payments will increase your chance of securing them for multiple transactions down the line.
Case Study Example: Sales Boomerang’s FHA Mi Removal
With this alert, you’ll know when your borrower is credit qualified and can remove their mortgage insurance.
Can you imagine your borrower’s excitement when they get a call that could save them hundreds of dollars a month?
The solution is a ‘no brainer
The cost of acquiring net new customers will always be more expensive than retaining customers — the answer is simple. Investing in a mortgage customer retention system will help keep you at the forefront of your borrower’s minds when they are looking to do their next transaction. Since loans aren’t typically one and done, keeping your borrowers engaged is critical and letting them know you are a trusted advisor.
Remember, your customers are not paper towels. They’re not disposable.
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