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The Case for CX ROI: Seven Ways CX Can Boost Your Bottom Line


I’m planning a wine-tasting trip to the Santa Ynez Valley, made famous in the movie, “Sideways.” I love touring wineries because the people leading the tours are always so passionate about wine and so invested in the process, the culture, and the history. And the vineyard owners know that no matter how fancy their packaging or how perfect their price point, their business lives or dies on the quality of their product. And the quality of their product has a lot to do with the soil of their vineyards.

I think the same is true of mortgage lenders, though we’re a tougher bunch to convince. As “numbers people”, we tend to be quick to throw money at marketing, shiny new tech solutions, or promises of better searchability, because we think they’re the fastest, most direct way to increasing revenue. But what if the best way to grow revenue is to improve the quality of our service? What if profits are just waiting to be unearthed in the rich soil that is our customer experience? Our question this month: “What is the case for CX ROI?”

What Are the Top Seven Ways Your CX Investment Will Deliver ROI?

There’s a saying here in Los Angeles: “Never buy a “celebrity white.” In other words, stay away from white wines with celebrity endorsements (or worse, a picture of a famous person on the label). Why? They’re often overpriced collaborations that rely more on marketing pizzaz than on quality. Also, people tend to be less discerning with white wines, adding to the swindle.

Now apply that concept to our mortgage marketing efforts. Are we so concerned with the awareness and “sizzle” of our marketing and brand visibility that we’ve neglected what really matters in terms of driving new business, app-to-close pull-through and retention? Maybe it’s time for a reminder of all the different ways that customer experience impacts mortgage revenue.

Diagnosis

Here are seven ways investing in your customer experience will produce financial returns in 2025:

1) Increased Referrals and Word-of-Mouth Marketing

This is the one that always comes to mind first, since it’s easy to measure with Net Promoter Score (NPS) and Likelihood to Use Again metrics. According to MortgageCX data, 90% of borrowers choose their lenders based on their own prior relationship with them or the experience of someone they know and trust

Monetary Impact: Referred customers often have a 30% higher conversion rate and are four times more likely to refer others than non-referred customers.

Question: What is your referral percentage now and where would you like it to be at the end of 2025?

 

2) Customer Retention and Loyalty

Retaining existing customers (and getting them to return for their next transaction) has always been much more cost-effective than acquiring new ones, but it’s easier said than done. National retention rates continue to be less than 20%. Remember that nearly every borrower will at some point need future services such as refinancing, home equity loans, and other financial products, making this a huge area of opportunity for lenders.

Monetary Impact: A meager 5% increase in customer retention can boost profits by 25% to 95%, according to a recent study.

 Question: What is your retention percentage now and where would you like it to be at the end of 2025?

 

3) Higher Customer Lifetime Value (CLV)

Happy customers are more likely to return for additional products and services, increasing their overall CLV.

Monetary Impact: By delivering a superior customer experience, lenders (depositories in particular) can upsell and cross-sell related products, such as insurance, investment accounts, or personal loans. Even if you’re not cross-selling, you might market differently, with a more tailored approach, to borrowers with higher total transactions and/or referrals to their names.

 Question: If you’re a depository, are you currently tracking Customer Product Penetration or Service Utilization? If you’re an independent, do you track each borrowers’ total number of transactions and referrals? Where would you like those numbers to be by the end of 2025?

 

4) Reduced Costs Through Efficiency

Improving CX often involves streamlining processes and adopting technologies that reduce operational inefficiencies.

Monetary Impact: A smoother loan application process can reduce time to close, decrease employee workload, and lower the cost per loan. Digital tools like automated document collection or automated appraisal reviews (warrantied, of course) can reduce manual errors, save time, and further cut operational expenses.

 Question: Are you measuring the loan process deeply enough to uncover borrower pain points and internal inefficiencies? You can’t act until you have data to react to.

 

5) Improved Customer Acquisition

It’s looking like rates will hover between 6-7% through 2025, so every deal will be a fight. Exceptional CX differentiates lenders in a tough market. A lender known for transparency and responsiveness can attract borrowers who are willing to pay slightly higher fees for peace of mind.

Monetary Impact: Companies with a strong CX strategy can command a 16% price premium on products and services, according to a recent study by PwC.

 Question: How often do your loan officers ask for rate exceptions? Bottom line: They shouldn’t need to if they’re providing exceptional customer care.

 

6) Risk Mitigation and Regulatory Compliance

Poor CX often leads to complaints, disputes, and regulatory scrutiny, which can result in fines or reputational damage. A lender that proactively addresses customer concerns and ensures compliance with regulations (e.g., clear disclosure of loan terms) avoids costly penalties.

Monetary Impact: Avoiding fines and lawsuits saves money and preserves brand equity. Remember that most lenders don’t think much about these penalties until they get hit with one. Don’t be one of those lenders.

 Question: If the auditors came knocking on your door tomorrow, how confident do you feel that your business practices, recorded calls, and complaint documentation would all be able to withstand the highest level of scrutiny?

 

7) Enhanced Brand Reputation and Market Share

A lender with a reputation for excellent CX can capture market share from competitors who lag in this area, especially borrowers dissatisfied with competitors. This goes beyond your online reputation, which is what most people associate with “brand reputation.” It’s more about who you are to people who talk to each other at work, at church or at the neighborhood barbeque.

Monetary Impact: Research shows that 86% of buyers are willing to pay more for a better customer experience.

 Question: When was the last time you (yes, you…not someone else at your company) interviewed a customer about their loan experience? Let me know if you’d like a list of questions to ask them.

 

Prescription

In lieu of offering three takeaways this month, I want to challenge you to go back through the questions above and answer each one. Do that, and you’ll be well on your way to making more revenue in 2025. Or at least you’ll know where your “soft spots” are and what you can start to do about them. As always, I’m here to help!

To find more Monthly Customer Experience Tips, click here.

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