By Garth Graham

MAR 13, 2013

What We're Hearing

Getting Drunk on Customer Interaction

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WE’RE HEARING it helps to know your customers. I was at a restaurant by myself one evening not long ago while on a business trip to Minneapolis. Well, actually it was a bar, not a restaurant, but the rest of the story (so far) is true; it really was Minneapolis. There are a few lenders left in that town even after the demise of RFC.

I was struck by a simple thing that the bar maid did that I thought was very effective. After I ordered my beer, she asked me my name. Simple question that I got right on the first try (it was my first beer). I watched her as she left (I watched how she handled her job, I meant to say), and noticed that she entered my drink into the system behind the bar and she typed out my name. She then repeated the process with the other customers. As she went on to the next patron, I noticed that the restaurant display now showed a grid with every single patron’s name on it along and where they were sitting in the bar. I was impressed! Why was that so effective?
The use of my name made me feel much better about the service, about how she was treating me. It also made her very efficient, as she was able to shout across the bar and say, “Garth, want another?” Now, how many times have you refused someone who asks you that question and addressed you by name? You don’t, you just nod dumbly and the next round appears.
So, as I was sitting at the bar, I thought about how effective this was, and how this kind of technique should be leveraged by mortgage companies. I thought about it a lot. In fact, I spent more than 50% of my time at the bar thinking about it. That is an important point to make, seeing as how I expensed 100% of the bar tab on my taxes. Here are a few simple actions that mortgage companies can take to know their customer better and ensure a big impact on their success.
The first example is to follow the lead of the friendly barmaid in Minnesota and know my name and something about me when you talk to me about a loan. For a mortgage company, this can be accomplished by tracking the interactions your employees have with the customer and making sure everyone involved in the process has access to those interactions. That sort of CRM-type functionality lets the customer have a relationship with the mortgage company and not just one person at the mortgage company. That's what allows you to build scalable platforms where you can balance the workload across teams of employees. Another easy way to have a big impact is to use the same technology that the local telephone companies have used for years—it's called Caller ID. When a customer calls, try to instantly pull up their record based on phone number and thus have a meaningful conversation that advances the relationship rather than retread old ground. My home phone has a little voice chip that actually says the caller’s name as it rings. For example, my sister married a guy named Schultz, and every time she calls my fancy phone announces her. It’s sort of like being in a “Hogan’s Heroes” episode, but it’s pretty convenient to know it’s my loving sister so I run to the phone and answer it with a happy heart (anecdote provided in case my sister actually reads this).
We work with a lot of companies that get lots of leads, and then spend a lot of time and money trying to sift through them to find the ones good enough to work. They ask a bunch of questions about the type of loan the borrower is looking for in order to know what type of loan in which to provide a quote. However, I am always amazed at how few lenders leverage already available data to try and figure part of this out before they even take the call.
Best practice lenders leverage a data mart that has a wide range of instantly available credit models, public records and demographic data on the prospective customer. These models let you make much better decisions on how to route the leads (to which loan officer and which agent), what product they are likely to be interested in as well as prioritize the sales effort. These solutions cost pennies to use and generate real dollars in higher conversion rates. Using such a tool would be like having a barmaid know my name and my likely order before I even sat down.
Another scenario involves the ability to quickly convert a rate shopping conversation into something that means more to the consumer than just rate. As part of our consulting practice, we often secretly shop lenders. Most of the time, the rates are quoted without immediately migrating the consumer into a conversation about payments and savings. If the lender only quotes rate, then the customer only compares rate. But if you immediately migrate to payments, then the customer begins to react to that. I often sit on the phone when I am a secret shopper, and then wait with a long pause to see if the loan officer automatically migrates to payments. Most don’t. It’s not that hard to calculate a payment, but it needs to become a seamless part of the conversation, sort of like asking “would you like another?”
Even better, lenders could use some basic automated tools to calculate a refinance savings within seconds. That has a big impact and can lead to the consumer telling you more about their situation, just as the barmaid’s conversation with me generated another order.
Selling on a purchase loan requires different approaches, but using the personal touch is just as important. But, those comments will be offered on another day. Meanwhile, I am heading back to the bar. Feel free to call me by name, or drop me an email to talk about other ideas to personalize your sales approach.
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.