Skip McDonough, veteran loan originator and president of The Mortgage Firm, Jupiter, Fla., shares his views on creating an effective Customer-for-Life program.
Broker Banker: What is the most important step in creating a “customer for life” culture?
Skip McDonough: Nobody puts it better than Harry Beckwith in his exceptional book Selling The Invisible: “The first step in service marketing is your service.” People expect and deserve good service. If you want to develop “Raving Fans” for life you better have an exceptional loan process and that requires specific action steps that everyone on your team understands and follows with every loan. The program doesn’t have to be overly complicated, but whatever you do, it’s important to think of the customers first and be distinct enough in your approach that they will remember you.
My goal is to be the standard that others strive to emulate. I never stop trying to improve the process.
BB: How do you make a memorable first impression so that the customer is inclined to call you for their next loan?
McDonough: The reality is homebuyers don’t want a loan. They want a new home and need a mortgage to succeed. It’s really a stressful time for them. We sometimes forget just how much but as a good reminder, stop at your local U-Haul tonight and get a big truck. Now drive it home and pack up everything you own in boxes. Load them in the truck and drive around the block. Now unload it. Don’t forget to eat, take care of the kids and go to work.
My goal is to identify the stress points and make the process as easy as possible for our clients. That starts with our first conversation when we make sure that we have thoroughly prepared them, answered every question and done everything possible to reduce their anxiety level. Speed is a really big deal to me. The faster we can deliver a formal loan approval the happier everyone is. We have a system to obtain formal approvals in seven days and clear-to-close in 10 days. Seven out of 10 times we hit out goal.
The second big thing is communication. Personal contact by phone or in person every week is a must. We have an automated system that notifies the client and Realtors of every step in the process by e-mail. We also have a free phone app in iTunes that keeps them up-to-date. It also has contact info for Realtors, LO, processor and title company. There’s even a loan summary.
The closing documents go to the closer four to five days before closing. We review the closing statement with the clients and Realtor two to three days before closing.
By the time the loan closes, our clients believe that our first concern is to serve them, to make sure that their loan transaction is as painless and trouble-free as possible. Our tag line was given to us by our clients: “We Make It Easy.”
BB: What is your most effective strategy for remaining visible with customers after the loan closes?
McDonough: First you need to have an automated system to deliver communications. Don’t rely solely on e-mail. We have touch points specifically related to the client’s closing, including a service survey, amortization schedule, first payment reminder with letter, thank you card, three month card, anniversary card, tax pro-ration letter and Homestead filing letter.
Then we have a lifetime loyalty program with a commitment to get in front of our clients with at least 20 scheduled touches that include birthday cards, and those for special days like St. Patrick’s Day and Halloween, special news bulletins such as “Rates Plunged,” a quarterly neighborhood sales history, and a monthly newsletter.
I could be wrong but I hate generic newsletters that tell me how to bake cookies and wrap my pipes for the winter (I’m in Florida). The key is to inform and entertain.
BB: How did you begin working with your original customers’ children?
McDonough: I’ve been in this market for 35 years. We’ve had our Loyalty Program for 20 years. After that much time we’re actually working with grandchildren of our clients. We love that. As we continued developing long-term relationships with our initial clients, they would encourage their children to contact us as well. Here’s a great success story. I still use the original dry cleaners from when I moved here in 1979. I handled their mortgages and loans for their children and grandchildren, along with a host of referrals.
One key to success for establishing a multi-generational customer base is to develop a genuine interest in the customer’s family. When we make phone calls or do other follow-up contact, we ask about the children, their high school and college graduation and other milestones. Customers know that we value them as friends rather than closed loans.
BB: Any additional advice for other originators?
McDonough: To build the lasting foundation during the loan process you must make it great. And be accurate with everything you do. Know your stuff. The loan process is an invasive pain in the buttocks. Let your clients know how complex the process has become and that your goal is to simplify it as much as possible.
(Skip McDonough has been repeatedly ranked in the Top 200 mortgage originators in America. His 30-plus year career includes serving as senior vice-president of mortgage lending for two banks and owner of two successful mortgage firms, which he sold. During his career, Skip has closed over $1billion in residential home mortgages.)