One successful LO describes his customer follow-up campaign.
Excluding real estate investors, most people will buy somewhere between four and eight homes in their lifetime. With a few refinances and maybe a lake, mountain or beach house thrown in, that may equate to six to 12 home loans over the course of a 40 to 50-year period of adulthood.
Most marketers will tell you that it’s cheaper to keep an existing customer than find a new one, and that’s certainly true in the mortgage business. But mortgages are not like books, sodas, coffee or other products that people buy. In those cases, once you’ve gotten the customer to try your product and like it, habit alone may keep them coming back to you day after day. But people don’t buy homes very often. Even when you consider refinance loans, it can literally be years between the time you close a loan with a customer and when they need you again for a new purchase or refinance loan. With mortgage servicing sold so often, you can’t count on the monthly mortgage statement to remind the customer of your company’s name because your company may not be doing the servicing at the time your past customer starts thinking about needing you again.
The mortgage process can be complicated and most homebuyers know that a trusted advisor who gets the job done by building a comprehensive mortgage plan to match their overall housing and financial needs can be a great resource.
Building customers-for-life starts at the very beginning—creating that first impression as a great service provider. Our receptionists bake fresh cookies for our customers and once in my office, I offer them soda, water or coffee. These little things can help personalize the experience and cement you in your customer’s mind. Of course, the loan process itself and the closing must be smooth, so your company must have systems in place to make this happen. To back up HomeBanc’s promises of excellent service, our company offers an unconditional customer service guarantee. If after closing a customer is unhappy, we will refund their application fee. Less than one percent of our customers request this refund, but just having this guarantee is one more way I can distinguish my service experience from my competition and help create a brand impression that lasts past the closing table.
So, you’ve made your customer welcome and you’ve closed their loan without a hitch, now it’s time to keep your name in front of them so they will keep coming back to you (and refer you to their family members and friends). During those intervening years, it’s important to keep your name in front of your past customers in a way that is effective, efficient and affordable without being too intrusive. Laws governing contact with past customers may vary by state. And the federal government also has things to say about direct mail, phone or e-mail solicitations. So in all the examples noted below, I’m assuming the customer has appropriately “opted in” to your communications with them. If you don’t know the federal and state laws governing customer contact, take the time to check those out so you don’t end up in any legal trouble.
Also, remember that you may not premium price your loans to recoup investments in marketing. If you’ve taken a customer to an event or made a donation in their name, you can’t quote them a different rate than you would quote a similar customer on whom you did not expend this marketing money. You don’t have to spend equal amounts of money on each customer, but you must give each customer equal pricing based on standard mortgage criteria. As you build your marketing plan, be sure to touch base with a lawyer or a mortgage banking association to make sure you stay on the right side of all RESPA, Fair Housing and other laws and regulations.
Use E-mail Sparingly
E-mail is a great and affordable way to keep in touch with your customers between loans. It costs nothing to send except the time it takes you to write it. With e-mail, I can affordably send important mortgage information, industry news, share mortgage and home financing tips, let past customers know about new mortgage products or just reach out from time to time to say hello (on a customer’s birthday, the anniversary of their closing or a holiday). All of these contacts will remind your customers of your name and company so you’ll be top of mind when they need a new loan. But be careful not to abuse this tool. Because it’s so inexpensive and easy, you might be tempted to bombard your customers with e-mailed information, hoping each time to create a brand impression. You’ll create an impression, but it won’t necessarily be the one you want. Customers across the board say they find junk e-mail just as offensive as junk mail. So use e-mail sparingly and only when you really have something important to say.
Lots of people predicted the death of regular mail with the rise of e-mail. But traditional mailings can still provide an opportunity to touch base with customers in an efficient and genuine way. For my past customers, I send a variety of newsletters and postcards throughout the year to keep my name in front of them. These include an informational newsletter with mortgage tips, financial information and news related to housing and mortgages. This newsletter is branded with my name, company and contact information. I also send an occasional postcard mailer noting my contact information and reminding customers that I’m available to help them (or their family members or friends) with any home financing needs. I send personal “thank you” notes to customers for their business right after closing and if they’ve referred a family member or friend to me.
You can also send items like small calendars, sports schedules or important local contact information with your name and contact information on it in a business-card sized item or a magnet. These are items people tend to keep around for some time—they have a long shelf life—so they can be exceptionally good at keeping you and your contact information at the forefront of a customer’s mind when they need a new loan.
One unique item I send is a series of inspirational messages on CDs from HomeBanc’s Chief People Officer, Dr. Ike Reighard. Reighard is a nationally known speaker on work-life balance, workplace issues and living an extraordinary life. About once a quarter, he records a CD with a new inspiration message, which we make available to our own employees and to customers. Because Ike is so well known, many of my customers know he has this CD series and I will happily send copies to past customers or Realtors and builders I work with.
As with e-mail, use snail mail items sparingly. Monthly or quarterly mailings seem to be the most effective. Anything more often than that and you may start to seem like a nuisance. Again, with too-frequent mailings you’ll be creating an impression, but not one that is guaranteed to get you a customer-for-life.
As customers come back to you time after time to do their loans, you’ll find some customers have moved up the economic food chain and are now buying very expensive homes. You should give all your customers the same level of service when working with them, regardless of the size of their loan. By law, you have to price the loans the same if the credit criteria are the same. But in marketing to these now higher-net-worth customers, you need to remember that it will take more effort to keep their attention because these people tend to be busier and have more marketing messages directed at them. By going above and beyond the regular mail/e-mail campaign with occasional special events, you can help keep your name in front of these busy, high-net-worth customers.
These special events might include inviting a group of customers to a concert or hosting a cocktail party or other gathering at an interesting location like a museum, art gallery, amusement park or local decorator show house. For example, we have invited a group of past customers to a well-known playhouse for refreshments and a performance. It’s another key successful way to show past customers that you want their long-term business.
The holidays are a great time to reach out to customers in a way that is more special than sending newsletters or branded items. Each year, I let my customers know in a holiday card that I’ve made a donation in their name to an Atlanta group called Children Have Rights in Society Homes (CHRIS), an organization for abandoned or abused children. In addition to my card noting that I’ve made this donation, the customer also receives a note from CHRIS acknowledging the donation on their behalf. Through this effort, I can touch my customers twice with my name and contact information but more importantly, help children in need and let my customers know about a great organization I believe in. It’s a win-win for everyone. If you do this, it’s important to pick an organization that won’t be offensive or controversial to some portion of your customer base. Charities involving children, local museums, local non-profit hospitals or other non-controversial groups may suit you better than picking a charity with a political or social agenda.
Monitor Your Efforts
All efforts at marketing and building customers-for-life will cost you money, time or sometimes both, neither of which you want to be spending if you’re not getting results. So it’s important to monitor your marketing results to make sure you’re investing wisely. This kind of monitoring doesn’t have to be expensive. For instance, I keep a database of past customers and note how many times they’ve come back to me. When I get a new customer, I ask how they heard of me. If they’ve been referred by a past customer, that’s proof that my customer retention marketing is working to keep my name and contact information top of mind with my past customers. I can also check my Web site hits and note if incoming phone calls spike after a mailing or e-mail campaign, which shows if my materials are getting through to my past customers and leading them to pick up the phone or visit my Web site. More sophisticated monitoring efforts could cost you much more than they’re worth, but a few simple things like those noted above can give you an idea if your efforts are working to develop customers-for-life.
Mortgage lending is still very much a relationship business. If you’ve done a great job for your customer, they will likely want to come back and do their next mortgages with you. But people are busy and have literally hundreds of marketing messages aimed at them every day. If years go by between a customer’s loan closing and their next house hunt or refinance, they may not remember your name, company name or how to find you when the time comes for a new loan. By marketing to your customers after the loan closing, you have a much better chance of building and keeping customers for life.
By Gary Welch
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