for these free STRATMOR
online publications
We had some plumbing work done this past week and I used the same plumber I’ve used several times over the years. He’s reliable, does good work, charges a fair price, and if you were to ask me how likely I am to recommend him to a friend, I’d probably give him a 9 or 10. I even left him a glowing review on Angi’s List.
There’s just one problem. I’ve never actually recommended him to anyone. Not because I wouldn’t recommend him. The opportunity just hasn’t presented itself — or maybe he hasn’t given me a reason to think about the experience further. He’s never asked me for a referral. I don’t hear from him now that the job is complete. And unless something starts leaking in my house, I pretty much forget he exists.
That got me thinking about something we’re seeing in STRATMOR’s MortgageCX data. We have lenders whose referral rates are improving dramatically even when their overall customer sentiment isn’t changing much at all. So perhaps we’ve been skipping over an important question. Knowing that someone would recommend you to others is useful. But what actually causes them to do it?
Our question this month: What turns a borrower’s willingness to recommend into an actual referral?
For years, we’ve used the phrase “likelihood to recommend” as a proxy for advocacy. The logic is straightforward. If a borrower tells us they’re highly likely to recommend their lender, we assume we’ve created a potential advocate and, by extension, an opportunity for future business.
But there’s an important step between those two things that we rarely measure: Did they actually do it?
We’ve started looking more closely at that distinction in our MortgageCX data, and one client’s results over the past five years really caught my attention.
In 2022, the lender’s referral rate was 11.5%. By 2023, it had increased to 15.0%, then 17.9% in 2024, 21.0% in 2025, and 22.6% year-to-date in 2026. In other words, the percentage of its business coming from referrals nearly doubled in less than five years.
You might expect its NPS to have followed a similar trajectory, but that is less clear.
NPS increased from 59 in 2022 to 68 in 2024 but then stopped improving. During the period when NPS was flat, referral rates continued climbing.
I’m less interested in what that says about NPS than I am in the question it creates: What else was causing borrowers to refer?
That’s where this gets interesting.
Think about the businesses you use regularly. Your plumber. Your accountant. Your dentist. Your favorite restaurant. If I asked whether you’d recommend them, you’d probably say yes to quite a few. But that doesn’t mean you’ve actually recommended any of them. That’s because willingness to act and action are two different things.
The same is true of mortgage borrowers. A borrower can love their loan officer, give the experience a 10 out of 10, and sincerely say they’d recommend that person to friends and family. But unless something actually prompts that borrower to take the next step, the lender receives exactly zero new loans from that good intention.
That’s why I think we need to become more interested in referral activation.
What causes one satisfied borrower to actually tell three friends about their loan officer while another equally satisfied borrower never mentions them? Does the LO ask? Does the experience contain a memorable moment worth talking about? Does someone follow up after closing? Does the borrower understand who the LO can help? Does the lender stay visible enough that the LO’s name comes to mind six months later when a friend says they’re thinking about buying a house?
Those are very different questions from asking whether someone is “likely to recommend.” And if our objective is generating more referral business, they may ultimately be more useful ones.
I think as an industry we tend to treat referrals as the natural byproduct of satisfaction: deliver a great experience, create a happy borrower, and eventually referrals should appear. But the data suggests the relationship may be more complicated than that.
Consider the lender above. Between 2022 and 2025, its referral rate increased from 11.5% to 21.0%. On 5,291 loans in 2025, that difference represents approximately 503 additional referral loans compared with what the lender would have generated at its 2022 referral rate.
Using a $378,000 average loan size and an 80-basis-point margin, those additional loans represent roughly $1.5 million in estimated incremental revenue.
Something changed. Maybe some of that improvement was driven by a better borrower experience. Maybe it was stronger Realtor relationships, better follow-up, more effective referral asks, changes in the lender’s mix of business, or a combination of several factors.
That’s exactly the point. A “likelihood-to-recommend” question can’t tell us.
If I were trying to understand why this lender generated 503 additional referral loans, I’d want to understand the actual behavior. I’d want to know whether borrowers had already recommended the lender to someone. I’d want to know whether the loan officer asked for a referral. Then I’d want to compare those answers across loan officers, branches, and time periods to see which behaviors actually correspond with more referred business.
Now we’re measuring more than just sentiment. We’re diagnosing what activates advocacy.
There are three things I’d encourage lenders to do if they want to generate more referral business.
Final Thought: An increasing referral rate while NPS declined is unexpected, but the most interesting thing about this lender’s five-year story is that referral business nearly doubled, and we should want to understand why. For years, we’ve been very good at identifying borrowers who could become advocates. The next opportunity is figuring out what causes them to actually become one.
The real growth question needs to shift from “Would you recommend us?” to “What made you recommend us?” Answer that, and you may have something you can actually replicate.
To find more Customer Experience Tips, click here.
MortgageCX is now integrated with Encompass®! Mike Seminari
Start receiving monthly Customer Experience Tips
Feel free to reach out with any questions or needs we might be able to help with.
