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Imagine training your whole life to compete at the Olympic level, finally achieving that goal, then showing up at the wrong venue on the day of your race. It’s the stuff of nightmares, but it was real life for Jamaican hurdler Hansle Parchment in the 2020 Tokyo games, who showed up at the aquatic arena instead of Tokyo’s Olympic Stadium on the day of his race. Sometimes, you can do everything right along the way, then get tripped up by one costly mistake at the end.
This concept seems to be true of many of life’s pursuits, not the least of which is guiding a mortgage borrower through the home financing process. The seemingly smallest of miscues can mean the difference between a raving fan who will refer their friends and a grumpy grouch who will redirect new business elsewhere. Our question this month: “How can lenders and loan officers protect against referral fallout when miscues happen?”
Despite our efforts to give borrowers a pristine and delightful loan process, mistakes happen. But just how costly are they? If there’s one thing I’ve come to learn over the past ten years from studying mortgage customer feedback, it’s that borrowers are very capable of simultaneously holding:
According to STRATMOR data from the MortgageCX program, the average performance rating for an LO is 95/100 — which means half of all LOs are even higher, between 96 and 100. The loan process, on the other hand, is often strewn with miscues, with nearly one in two loans failing in one of the key areas that drives advocacy, costing an average of 75 NPS points and forfeiting any referral opportunity.
This presents a major blind spot for loan officers, most of whom assume that the affection for the LO will produce referrals, whereas the data actually shows that the Process is the main driver of advocacy and loyalty — by a 4:1 ratio, no less. They are often left confused and frustrated when the referrals they hoped would flow freely from their happy clients aren’t coming in at the pace they expected. And most lenders are not helping the cause. Since the main emphasis of customer feedback for the past decade has been on collecting testimonials versus gathering deep process insights, most lender surveys are quite short and provide little detail or analysis, much less a clear prescription for improvement. And at the risk of stating the obvious, you can’t very well mitigate a problem you don’t know that you have.
Bottom line: Process miscues are damaging the likelihood of repeat and referral business, and lack of visibility is leaving LOs powerless to affect change.
When Hansle Parchment arrived by taxi at the aquatic arena, he soon realized his mistake, and what’s worse, he didn’t have enough money for a taxi to the correct venue. What he did NOT do:
He decided he could walk or run the roughly nine miles, or he could get resourceful. He ended up borrowing money from a stranger, making it to his race in the nick of time and ultimately … winning the gold medal!
So, what can we learn from this?
When bad things happen, whether it’s our fault or not, it affects our ability to win. But it doesn’t forfeit our ability to win. We just need to attack the problems like an Olympic champion.
Here are three ways we can do that:
Not every race will be your best one. We need to accept the fact that no matter how closely we manage the process, there will be occasional mistakes. Even the award-winning, best-in-class lenders on the MortgageCX program fail on one of the seven key drivers on one-in-four (24%) loans. Once we’ve swallowed that pill, we can look at how to minimize the damage.
Olympic athletes routinely watch video playback of their workouts and scrutinize every aspect of their form and movements to gain any edge they can. If you’re a loan officer, encourage your survey administration team to start asking your borrowers deeper questions (e.g., ask about the initial document requirements list, whether they were given proactive updates, whether they were asked multiple times for the same documents, and how prepared they felt for closing). If you’d like a full list of STRATMOR’s Seven Commandments for Optimizing the Borrower Experience, just send me a direct message. Borrowers who indicate that all seven of these commandments were achieved produce a 97 NPS.
I know of many companies that make personal phone calls to borrowers when a survey comes back with a six or below on Overall Satisfaction. I know of others who call anytime a borrower cites a “problem area” on their loan. My suggestion would be to take it a step further. Using the Seven Commandments as a guide, have your LO call the borrower anytime one or more of these commandments is broken, with:
Here are three more practical ideas for creating more delighted borrowers, even in the midst of miscues:
Join us for the virtual Customer Experience Workshop, September 17, 18 and 19, to learn from STRATMOR customer experience experts as well as peer lenders how to optimize your loan processes to maximize repeat and referral business and achieve your growth goals. Learn more and register today.
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