Last week, I talked about how boosting your conversion ratio starts with the loan officer and gave you some ideas for changing that conversation into something more like a, well, like a conversation.
Once you get into the application stage, the process of having a dialogue instead of an interview increases conversion even more. In fact, there are many opportunities during the loan process to increase conversion, although we don’t often consider how processing impacts conversation. As I have said before, 2014 is the year of conversion, and perhaps the best way to drive up conversion is to consider how every interaction with the consumer has the chance to increase or decrease conversion.
We all know that getting the information for the 1003 is just the beginning of the process for consumers, and that there are going to be many requests for information and documentation throughout the process.
The problem is that many of these conversations start with this often uttered and never welcome phrase: “I am going to need an explanation ” Now, if you are on the receiving end of that message, how does that make you feel? Sort of like something is wrong with you, or that you have done something wrong, like maybe cut down the neighbor’s tree to make a fort with your dad’s ax, which was borrowed from the garage without telling him, which made your dad punish you by raking leaves in the neighbor’s yard for the next month (Sorry, I think that’s my PPSD kicking in—post-parental stress disorder).
My point is that using the words, “I am going to need an explanation” hardly connotates a positive image. What about, “you are going to have to document that”? That seems to imply that you don’t believe the explanation that I just gave you. Is that any better?
Now, at Stratmor we help lenders measure borrower satisfaction on closed loans, and we have found that providing an accurate list of required documents up front can have up to a 40-point increase in borrower satisfaction—that is like going from a failing grade to a A+ (another thing I had to work hard to accomplish to prevent my dad from making me rake more leaves).
For instance, you ask them if they get monthly pay stubs and a lot of borrowers will say they don’t. Their checks are automatically deposited so they never see it. That’s OK. You ask them if they get monthly bank statements in the mail or view them online. You then help them log onto their bank’s website and get their monthly bank statements. Easy. Now, instead of saying, “I need you to send me bank statements, pay stubs and W-2s,” you’re saying, “Grab your last two bank PDFs and send them to me.” Believe me, this has a totally different effect on a borrower than hitting them over the head with some long list of stuff they can’t even interpret. And the best part: your loan is started within the first few minutes of the loan application process and you’re already getting supporting documentation. It’s just a nice easy conversation.
This shows that the best preparation for the loan process starts at application, and begins with a conversational style that can be carried right into the work of building that list of documentation that is going to be needed.
But remember, high conversion comes from information sharing, not interrogation. So, be sure to give information back as freely and easily as you ask for it. I’ve always said that the credit report and appraisal can be used as a marketing tool, not just as a risk tool that ends up costing borrowers money. You can use it to drive the borrower deeper into the process.
“Let’s get that credit report and then we can review together. When was the last time you saw your credit report?” That gets to the borrower’s uncertainty and makes you the one that can solve it. As far as the appraisal, “the sooner you sign up the sooner we’ll get your appraisal and the sooner we can review it together.” Then you can go through the details of the credit report, or the details of the appraisal with the borrower, proving that you’re both sitting on the same side of the table. Another jump in conversion!
Need more examples? Fine. I’ll 'splain it to you. Find me on LinkedIn to continue the conversation, or find me next week right here.
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.