A business traveler arrives at the gate early for his flight home and decides that he needs a shoeshine. He takes a seat at a nearby shoeshine stand. “Are you in a rush?” the owner of the stand asks. The traveler replies that he is not in a hurry.
The traveler begins reviewing messages on his phone and loses track of the time. A short time later, he looks down and sees that his shoelaces have been removed. With a Q-tip in hand, the shoeshine man is now busy cleaning out the crevices between the leather shoe flaps. A few minutes later, using his fingers and a soft cloth, he waxes and then buffs the shoes. Another five minutes go by and, with pride, the shoeshine man announces: “All done.”
The traveler once again looks down at his shoes and is amazed. The shoeshine-stand owner has spent nearly 20 minutes cleaning and polishing the shoes, which are now gleaming. The traveler asks, “How much?” The shoeshine man looks up with a warm smile and replies: “Whatever you think it’s worth.” This shoeshine professional knows his value, and he adds more value at every opportunity. The traveler gives him $30 for a 20-minute shine.
This shoeshine man has mastered the golden rule of service. He takes care of the customer, and the customer takes care of him — in great measure. The shoeshine-stand owner has provided such great customer service that he earns dozens of additional future clients as a direct result of his story being shared by the traveler with friends and colleagues. He also has given mortgage professionals a valuable look at how to treat customers.
The Referral Cycle
Adhering to the golden rule of service is essential to building a profitable mortgage-origination business. For many loan originators, a great deal of time is spent trying to generate new leads, referrals and applications from people they have never done business with previously. That is one way to develop new business, but it is not the easiest or the most profitable approach.
There are five important steps to growing your business: acquire new customers; optimize their experience; retain the customers; cultivate the relationships; and leverage those ties to multiply referrals. Every business needs customer prospects willing to buy. Typically, however, too much emphasis is placed on the cycle of acquiring new customers.
Once an originator has landed a new client, it is far more effective to retain them, as opposed to having to replace them. To be successful at retention, an originator must assure the customer’s experience is off the charts — like the shoeshine man delivered. If that happens, then an originator can continue to cultivate that relationship and work to generate additional business via the referrals it will produce. If great customer service is not delivered, however, the likelihood of referral business being generated from an originator’s customer base drops almost to zero.
“Blowing the customer’s mind during a service experience will unleash a steady stream of referrals.”
This means that optimizing the customer’s experience is key to the process, and it requires that originators find ways to connect with clients and to nurture those relationships. Companies that make an emotional connection with their clients outperform competitors in terms of gross margins by 26 percent and by 85 percent on the sales front, according to polling company Gallup. In addition, nurtured leads produce, on average, a 20 percent increase in sales conversion versus leads that are not nurtured, a recent report by marketing-consulting company DemandGen found.
Catch-and-release may be an eco-friendly fishing protocol, but it is a horrible business strategy. Finding new customers is clearly critical to business development, but far more important is the strategy employed to keep them.
The most successful originators realize potential customers normally fall into four categories: some will come onboard immediately; some might do so after talking to other originators; some sign on after thinking it over for a short time; and some might need months of contemplation before making a decision. The key is to be right there, having already established high trust, when that prospect decides to finally make a decision. Successful originators do the same with potential sources for referrals, like Realtors. In all cases, the odds of a customer or partner conversion increase greatly if those prospects are nurtured and a personal connection is made with them.
Blowing the customer’s mind during a service experience — as the shoeshine man did — will unleash a steady stream of referrals. The cycle repeats over and over as long as you focus on the golden rule. There is not a person on the planet who wouldn’t want that to happen in his or her business.
Connect and Nurture
Bain & Co., a major management-consulting company, reports that a 10 percent increase in the customer-retention rate translates into a 30 percent boost in a company’s value. The key is to have sales and operations committed to connecting and impacting consumers at a deeper level, making them feel special and appreciated.
Originators must not see loan numbers, but rather human beings. Although originators are in the business of “manufacturing loans,” and every mortgage has a loan number, not every mortgage company understands the lives behind those borrowers. What originators do, however, has a profound impact on the lives and the futures of the people served. The importance of providing great service, with the right motives, can’t be overestimated.
Efforts to connect with and nurture a customer must occur continuously through the entire life cycle of a mortgage, across all stages of the process, including pre-contact referral, initial contact and prequalification, pre-approval, incubation and loan application, loan processing, closing and post-closing.
Strive to provide world-class customer service across these areas this year, and you will be amazed at the results. It is the best marketing plan you can have, and it costs you nothing other than a little effort. If you employ this strategy as an originator, clients will return to you, time and time again. They also will go out of their way to tell the world about you and your services.
When you think you have done enough, do more. When you think you are done, go a little bit further. The golden rule of service comes down to one simple concept: You take care of the customer, and the customer will take care of you.
This article originally appeared in Scotsman Guide.