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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2007

Focus on Customer Retention

Develop respect and trust to retain customers and keep them coming back

Although mortgage-application ratios have decreased recently, it does not mean that mortgage brokers have to throw in the towel and give up. Thinking outside the box and working to retain clients can help keep business going during these hard times.

In fact, customer retention is a vital part of keeping business strong, particularly in a down market. Keeping your current and past borrowers satisfied will help you fund new loans.

So what is the best way to retain customers? By forming successful business relationships through truth and respect. To solidify relationships and gain respect, start by fully explaining loan programs to your borrowers. Also, give your clients realistic expectations about loan-process time frames. This way, you can continue to cultivate your business as you gain their trust.

It’s disappointing to have one of your clients go to another broker because of errors committed in the process of their loan. To ensure the process goes smoothly, you should follow three simple steps:

  1. Be upfront and honest with your borrowers. Explain the programs available to them, and let them choose which one best fits their needs and financial goals. It is easy to outsell your competitors when you have the knowledge to place your clients into loans that best fit their needs and goals.
  2. Clarify the loan process to borrowers. When going through the loan, educate them on time frames, conditions and submission procedures.
  3. Share your industry knowledge with your employees and colleagues. Use your knowledge of market trends and products to instruct employees on approved sales tactics.

Always telling your clients the truth about the mortgage process will make your life easier. Not everyone upholds this notion, however. Unfortunately, dishonesty and fraud exist in the mortgage industry. By making your employees aware of approved sales tactics, you can help ensure that everyone in your company will treat borrowers with respect and honesty.

The mortgage-loan process from borrowers’ standpoint is stressful; after all, their mortgage is a crucial part of their finances. To make things as easy as possible for them, the mortgage broker’s job is to keep them in the loop every step of the way. If there is an unforeseen change in the program or a rate increase, it is the broker’s responsibility to inform borrowers. That way, they will not be a shocked at the changes when signing the final documents.

Several hands touch each loan file — from the broker to the processor, from the account executive to the underwriter. At any point throughout the process, things can change. Updating your borrowers will put them at ease. If the borrowers are happy, they will trust you more with each loan, you will keep their business, and you will have the possibility of referrals.

Also, to inform borrowers about the mortgage process, brokers should follow current market developments. Some ways to follow market trends include reading mortgage trade publications, watching recent news updates and reading your local newspapers. If you handle loans in multiple states, read articles that will help keep your borrowers up-to-date in those states.

I cannot stress this enough: Customer retention is important. To retain customers, you must engage in honest and ethical business practices. Nobody should tolerate unethical business practices. There are other ways to earn business than to lie, cheat and steal from borrowers.

If you try some of these simple methods to retain customers, you likely will see a great improvement on return and referral business. Don’t forget: Everyone can make it in a good market, but it is the champions who succeed in the downtimes.

 


 


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