Inspiration Leads to Action

By: Sarah Volling for Today's Lending Insight

Summer is in the air; it’s the time of the year when many people make the leap to homeownership. Combine this with the fact that rates are still sitting at comfortable lows, and you can see that it is now more important than ever to inspire potential borrowers to reach out to you for their home buying needs. However, it is equally important to make sure your current borrowers get their next mortgage through you. Similar, yet distinct, approaches should be taken with each group.

We recently held our annual user conference, which draws hundreds of the industry’s premiere lenders and technology providers together to talk about all things mortgage. I have participated in this conference for many years, listening to our myriad of speakers and networking with our customers and partners. The conference always reenergizes participants and sparks new ideas.

This year, I honed in on one message in particular: Now, more than ever, lenders want to get borrowers excited about homeownership. This sounds obvious; after all, lenders are always seeking to attract borrowers. Marketing lays the groundwork, sales makes the pitch, and operations manufactures the loans. Together, they close deals.

So where does this process go awry, and why are lenders seeking to get borrowers excited? To put it simply, borrowers are not interested in the lender’s sales pitch.

The stark truth is that the vast majority of current mortgage holders will take out their next mortgage from a new lender. There are lots of reasons for that, including referrals from friends or real estate agents, or the pull of timely advertising. Brand loyalty is rare in housing finance, in part because lenders have little interaction with borrowers once their loan closes.

With the shift to a purchase market — one ripe for the biggest crop of first-time buyers in history — keeping in touch with your current borrowers throughout the life of their loan lays the foundation for increased brand-loyalty. There are many ways to approach relationship-building. Surveys can give you great insight into your current standing with customers, but you must then act on those responses. Borrowers (especially those who are unhappy or indifferent) must know that their voice has been heard. It also helps to stay in front of them with your current rates and programs; you want to be top of mind when the time comes for them to buy their next home.

Reaching those who are not already customers takes inspiration and differentiation. Lenders should experiment with new approaches to advertising, different types of conversations with potential customers, and new ways to cultivate and motivate referrals. The idea is to stand out in a crowded market with a combination of value and service that leads the prospective customer to action.

It’s never dull in our industry. Inspiring current borrowers and attracting new ones is more important today than ever before. Market research methods let us know who is likely to be looking for homes and financing. Other technologies — like online tools lenders make available to borrowers and potential borrowers — can also help. These are all great steps in the right direction, yet, as mentioned, today’s borrowers are often not brand-loyal. Address this by building loyalty with your current customers and by inspiring potential customers. After all, inspiration often leads to action. These are key ingredients in the recipe for continued success.