Thursday, December 13, 2007

J.D. Power: Lenders must communicate to succeed

Perhaps it shouldn't take J.D. Powers to tell lenders that the key to doing business in the current environment is to do a better job of communicating with their borrowers during the loan origination process. In a report I recently read about in a free e-mail from Valuation Review, J.D. Power's latest customer satisfaction study showed that "the key for lenders to keep customers happy is clear communication, particularly regarding the timeframe of the application and approval processes."

I don't want to belittle the marketing research firm's conclusions, but this is kind of a no-brainer. The company did not give specific advice for meeting this borrower need, but did point out some very interesting facts. Among them:
  • Working directly with a mortgage lender instead of a mortgage broker or online service leads to a more positive customer experience when originating a home loan.
  • Customers who are provided with a time frame for application approval provide overall satisfaction scores that are 112 points higher on average than customers who do not receive a time frame.
  • Delays caused by requests for additional information lead to a 95-point decline in overall customer satisfaction.
This isn't particularly good news for brokers, although better technology can help there. I'll blog on that over on the tech blog. But saving the 95 points by responding quickly to borrower requests for information seems like an easy score.

New Media tools like Ning are making it easier to set up social networks on the fly. I haven't seen anyone apply this to the team of various people that come together to close a real estate transaction, but it seems like it would be easy to do.

Whether lenders use open source, Web-based tools to stay in touch with their prospects or just spring for that admin is up to them. Within the next 12 months, it will be very clear which companies found a solution to this problem and which ones went out of business.
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