According to the Harvard Business Review, a 5% customer retention rate increase can improve an enterprise’s profitability by as much as 95%. However, given how easy it is for customers to research the most lucrative deals available and switch to different loan servicers in an instant, customer loyalty in the mortgage industry is unsurprisingly at all-time lows.
Nowadays, less than 18% of mortgage borrowers retain a single lender post refinance. For mortgage companies worldwide, this phenomenon raises the question, “why should a mortgage borrower stick to your services?” With the rapidly evolving landscape of financial services, companies that fail to answer this question risk losing out to their competitors. Here are four easy ways mortgage companies can increase customer retention in the face of declining customer loyalty.
1. Use Proactive Strategies
Customer retention is about enticing the customers that express a strong desire to leave, but more importantly, giving the seemingly content customers a reason to stay. Given how expensive it is to onboard new customers than retain existing ones, employing a proactive customer retention strategy could significantly improve a mortgage company’s bottom line.
A mortgage company that continually strives to offer its customers better value for money than its competitors will naturally build trust and foster customer loyalty. Besides offering competitive interest rates, loan servicers should ensure their customers are satisfied with the services they provide by answering questions like:
- How do our customers feel about the loans they receive?
- Do our customers consolidate their debts to lower credit costs?
- Do our customers frequently need to change the terms of their existing loans?
2. Be A One-Stop-Shop
Justifiably, most mortgage borrowers hardly consider their loan servicers when selling their homes or buying new ones. Unless a mortgage company expressly offers the right support, most of its customers will reach out to a local Realtor who may refer them to a different lender.
Mortgage companies can avoid losing their customers this way by:
- Providing customers with the right tools to monitor their property’s value
- Linking customers with company-vetted Realtors in their target areas
- Providing real-time MLS listings across all 50 states for customers interested in searching homes
- Assigning each customer a loan officer and Realtor depending on their locations
3. Invest In The Right Call Handling Resources
As obvious as it may sound, investing in the right team of specialists is fundamental to retaining customers proactively and reactively. No customer appreciates being kept waiting; efficient call handling is the key to addressing customers’ queries promptly and keeping them satisfied. Maintaining a long-term team of specialists and steering them to areas of urgency is perhaps the only way to handle fluctuations in call volume.
4. Gauge Customer Feedback
No business can thrive without its customers. Understanding how each customer perceives the services offered and reacting accordingly can go a long way in keeping them satisfied. For mortgage companies, this might mean getting their customers’ feedback on parameters like:
- General satisfaction
- Ease of access to loans
- Knowledge of the services offered
- Answer time
If assessed properly, customer feedback can give an accurate snapshot of a mortgage company’s retention efforts, including its strengths and weaknesses.
Customer retention is strongly correlated to customer satisfaction. The more customers value what a mortgage company offers, the happier they will be from the get-go and the more likely they will stay long term.