With limited loan options and similar pricing among competitors, service is how an originator stands out.
Almost seven in 10 Americans today work in a service industry. You are one of them. Mortgage loans are not products, but services. Sure, we have different mortgage loan programs and we sometimes refer to them as products, but they are not products at all. They are intangible services. When people purchase a car, a new pair of shoes or a high-definition TV they walk away with something tangible.
Mortgages are different. You can't drive them, wear them or watch them. When someone gets up from a loan closing, all they have are memories of the experience, a big debt, and a large stack of papers explaining what they just bought.
Americans are willing to pay less money for inferior products, and they do all the time. Think about the millions who shop at the dollar store, or buy cheap gas or a knock-off brand of dishwashing liquid. They realize they are not getting the best quality, and they're OK with that because they know they are paying a smaller price. Services are different. Nobody wants "cheap" service. Do you?
Imagine you wanted to get your carpets cleaned. One company quotes you $250 for a whole house steam cleaning and promises professional work, expert care with your furniture and beautiful, good smelling carpets when they are finished. A second company says they only charge $125 for the same job, but tells you their shampoo system gets carpets "fairly" clean and can't guarantee they won't damage anything while they are working around your house. They also said the residue might leave a funny smell in your carpets for a few days. Who would you choose? Even at half the price, service is something most folks are just not willing to compromise.
I work with quite a few mortgage companies and banks around the country, and I know a lot of originators. I e-mailed six of them and asked for their current rates and points on a 30-year fixed-rate loan. Virtually every lender was the same or within a quarter-point in discount. (I'll bet if you conducted the same survey among banks and lenders in your market, you'd find the same.) With the product mix down to just a handful of options and rates all about equal everywhere, what is the only thing you have left to distinguish yourself? That's right: your service.
Every originator I ask says he or she delivers great service. But do they? What is "great service" in the eyes of the customer? If all we have to sell is service, are we selling it well - and better than everyone else? Is the experience you deliver to your customers one that not only makes them happy, but happy enough to recommend you openly to their friends and want to come back again? In short, is it really that "great"?
While different people can define a great service experience in many different ways, here is a complete example, from the customer's point of view, of what it might look like:
1. On the first phone call received by the lender, the customer's call was answered promptly and professionally by someone who sounded happy that he called.
2. The inquiry was handed off quickly to a mortgage loan originator genuinely interested in the customer's situation.
3. The loan originator took the time to listen and ask good questions about what the customer was looking to do.
4. The originator provided clear, honest and helpful information on mortgage programs, rates and fees tailored to the customer's needs.
5. The originator offered a face-to-face consultation or a prequalification or application meeting to help the customer move forward.
6. The originator immediately sent out a hand written thank you card to the customer just for considering him or her.
7. The originator prepared the customer thoroughly upfront for what was needed for the initial loan application meeting.
8. The originator met the customer at the front door of his or her office or branch, offered a beverage, and escorted the customer to a neat, professional room for their meeting.
9. The originator took the time to explain all the documents and forms and set clear expectations of what the customer should anticipate in the home loan process.
10. The originator mailed a personal letter to the customer thanking him for his loan application.
11. The customer received a weekly status update call (from the originator or loan processor) letting him know how his loan was going and any concerns or issues that needed to be addressed.
12. The lender closed the loan on the date promised. The originator was there to attend the closing and make sure everything went smoothly.
13. The originator followed up the closing with a personal phone call thanking the customer again and asking the customer to return the next time he needed a home loan.
14. The originator (or lender) stayed in contact with the customer on a quarterly or monthly basis with a postcard, newsletter or e-mail message.
15. The originator sent a thank you card to the customer every time that customer referred someone his or her way.
Now that's a great service experience! If you were that customer, and that's the experience you received, wouldn't you be happy? Would you tell others what a great job that lender did for you? Would you come back again? You bet you would. Customers reward great service with their business every day. That's why service industry companies like Southwest, Cheesecake Factory and Ritz-Carlton are as busy as ever while other airlines, restaurants and hotels are struggling. (Hint: It's about the service.)
The loan product playing field is level and everybody's rates are about the same. The name of the game in mortgage lending today is service once again. It all comes down to the experience you deliver with every customer, on every loan, every time. Those companies, the back-shop support teams and originators who get that - really get that - will see their referrals and new loan opportunities grow this year by leaps and bounds.
Douglas Smith is founder and president of Douglas Smith & Associates, a training, speaking and coaching firm based in Asheville, N.C. He can be contacted at 877-430-2329 and his website is
