How Customer Engagement Drives the Bottom Line for Mortgage Companies
Customer engagement in the mortgage space has traditionally been very low and is often overlooked as a relatively insignificant factor in an originator’s or servicing company’s performance. It is estimated that only 22% of current customers are actively engaged with their mortgage provider. However, research shows that not only is engagement closely linked to performance, but it is expected to become even more critical in the near future, as large numbers of millennials with massively different expectations regarding their service providers enter the housing market.
The Importance of the Engaged Customer
According to a recent Gallup poll, “Nearly half (46%) of fully engaged mortgage-only customers became retail customers of the bank holding their mortgage, compared with only 11% of actively disengaged mortgage-only customers.
There aren’t many factors that can drive cross-sales up by a factor of 4X, but engagement is one of them. And the value of an engaged customer doesn’t stop there: fully engaged mortgage customers are more than twice as likely to return to the same bank or credit union for their next mortgage, and one in five customers chose their lender based on a recommendation from a friend – a recommendation that is greatly influenced by customer engagement and satisfaction (93% of engaged customers said they were extremely likely to recommend service to a friend, vs. only 3% of the actively disengaged segment).
Unfortunately, the dangers of disengagement are numerous, especially within the millennial segment. As growing numbers of millennials enter the housing market for the first time, their specific needs must be brought into consideration which requires a shift in methodology for many mortgage providers.
In a previous blog post, we reviewed the key factors to consider when engaging with the millennial consumer: Empowerment, Mobile, On-Demand, Personal, Personality, Video and Fauxsumerism.
McKinsey further expanded on the need for a personalized, dynamic and real time customer journey in financial services, noting that “banks must find ways to be more agile—in their mind-sets and their marketing operations. They must be willing to conduct a lot of small-scale experiments involving a variety of products and third-party providers (retailers, for instance) using cloud or proxy website services to pilot new designs and prove their value for investment.”
McKinsey also highlights how digital natives are ahead of the curve in their personalized marketing journeys: “Digital natives are exploring opportunities to test new user experiences and constantly evolve their offers—often for segments of one.”
In the case of millennials and many other customers, the key to successful engagement lies in the consistent practice of meeting them on their own terms. This means providing communication that is individually relevant, on-demand, visually-driven and available across channels.
Meeting Demands and Delivering Wow Moments
If that all sounds incredibly complex, it doesn’t have to be. While its true that implementing a full suite of marketing automation technologies is ideal for delivering an interactive and engaging customer journey, there are also significant low hanging fruits to grab that can be easily implemented by companies who have not yet automated their marketing operations.
An example of this is a Personalized Video that is sent to each customer after closing escrow. It is relatively easy to achieve very high engagement levels using a simple batch-mode implementation at this critical juncture in the customer journey.
A recent implementation with one of the leading lenders in the US not only resulted in extremely high engagement levels as evidenced by the 86% video completion rate and the 70% CTR (!!), but also wowed customers as evidenced by the many happy customer tweets about the campaign, as well as the added benefit of an 11% drop in call volumes from customers.
It’s a win on all fronts and a painless entry into the world of engaging, real-time marketing.
The Bottom Line
There are few levers that can deliver such a huge impact to the bottom line as customer engagement. The customer journey must be personalized and involve real-time interactions that are tailored to each customer and, where possible, deliver true wow moments that leave a lasting impression. Personalized Video makes it easy to check all of these proverbial boxes, in one easy-to-implement communication strategy.