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The other morning, my two-year-old daughter was refusing to eat her breakfast. Normally, we would just save it for her next meal, but this was going to be a long day and we needed her to get some food in her stomach. I tried patiently repeating myself, then offering her incentives (blueberries), then asking if I could feed her some bites. Finally, when all else had failed, I threatened to put her in a highchair, which she hates. And lo and behold, it worked!
It made me think about the age-old struggle lenders have faced in trying to build a customer-centric culture. How do you initiate behavioral change in your employees without having to resort to whip-cracking accountability and reprimands? Our question this month: How can lenders effectively motivate their frontline employees to deliver a world-class customer experience?
In more than a decade of collecting borrower feedback on the mortgage loan process – over one million borrower surveys and counting — the number one frustration STRATMOR hears is the difficulty in creating internal behavioral change in the pursuit of Customer Experience (CX) excellence.
It’s hard to engage employees at all levels when they either feel disconnected from the customer experience or perceive no need for change. I’ve spoken to many loan officers who say, “My borrowers love me. Look at my reviews and testimonials!” And they have a point; the average borrower review for originators rates them at 4.75 out of 5 stars.
But it’s not just LOs. According to STRATMOR data, the self-perception of lender employees at all levels regarding the customer experience they deliver is very healthy — maybe a little too healthy. When STRATMOR asked lenders in a 2022 study to score themselves in the areas of Application, Document Collection, Pre-Close and Closing, every single responding lender marked themselves well-above where borrowers did.
There’s nothing wrong with a positive self-image — that is, unless it’s holding you back from improving. According to benchmarking data from STRATMOR’s MortgageCX program, 55% of all loans have at least one major process miscue that destroys referrals, repeat business and retention. A single mistake, like forgetting to call the borrower to run over the final numbers, can cost 100+ points on the NPS scale, a death sentence for a referral opportunity. In a tight, purchase-heavy market like the one we’re in, customer experience is not only at the forefront of the battlefield but is also the primary determinant for future revenue growth and sustained profitability.
So, how do you motivate behavioral change? Here are four ways STRATMOR addresses motivation as part of our MortgageCX program and Customer Experience consulting engagements:
The primary concerns of most LOs are sourcing their next loan, winning their next testimonial, and cashing their next paycheck. How does a concern for CX fit into all that? It’s tricky, because many LOs believe that the customers’ high view of them personally will translate to referral business (spoiler alert, a high LO rating or even a glowing testimonial are both poor predicters of referrals).
The best predictor of future referrals is getting the borrower through the loan process with no problems. STRATMOR’s MortgageCX program monitors seven problems which, if you can avoid them all, results in an NPS of 97 — a guaranteed raving, devoted fan. That bit of new knowledge might be enough to persuade an LO to start paying more attention to the process, but it’s also possible that they may need a financial nudge to get the ball rolling.
Speaking the language of “motivation by compensation” can have a few looks when it comes to CX:
Show me a competitive person and I’ll show you a quality LO recruit. The two go hand in hand. It’s in their nature, and if it’s not, they’re not long for the job. Lenders have long played on LOs’ competitive nature with rewards trips and volume rankings, but that’s almost always based on quantitative (production) metrics, not on qualitative (CX) metrics. Flip that script and start turning up the competitive heat with some of these ideas:
Loan officers thrive on recognition almost as much as they thrive on competition. The beautiful thing about both is that they cost the lender next to nothing. Praising an LO for exceptional CX service levels can look like this:
When all else fails, there is always the performance review. This tends to be the least effective because the higher-producing LOs feel “above it” and the managers of those LOs don’t want to rock the boat with too much criticism. That said, STRATMOR has found CX-focused LO Scorecards to have a highly motivating effect when used correctly. When managers present scorecards to LOs as a means of identifying blind spots that are hindering referral business, LOs perk up. When you add a ranking/competition element to them, LOs may even start asking for them. Just make sure the cards are short and sweet.
You need to measure to do any of these. Measuring the effects is the first step to better understanding the drivers. How much more delighted are borrowers (i.e., how does borrower satisfaction and NPS change) when they receive an initial document checklist vs. when they don’t, when they understand fees vs. when they don’t, when they are given proactive loan updates vs. when they aren’t. It all starts with in-depth data collection on the borrower experience — something STRATMOR’s MortgageCX program can provide. Call me at the number below or find time on my calendar to set up a free consultation.
Here are three ideas that you can implement today to ensure you’re motivating your team to deliver a world class customer experience:
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