e-CRM and Collaboration: Getting ROI from the InternetTom GonserCustomer Relationship Management, CRM, Return On Investment, ROI, Internet
After watching the failure of previous online business models,
mortgage companies know that promoting lower rates and closing
costs is not sufficient enough to convince consumers to use their
services on the Internet. Since borrowers are undertaking a large
and complicated financial transaction, they need a great deal of
hand-holding. Superior customer service is needed for a mortgage
company to run a profitable business online or offline.
Building a Web site is only the first step to a strong Return On
Investment (ROI) via the Internet. According to a study conducted
by Celent in 2000, the financial services industry is failing to
respond to its Internet customers and prospects. Of the 150 leading
financial institutions surveyed, 56 percent of firms either did not
support inquiries via the Internet or did not respond to online
inquiries by potential customers. Most amazing is that only 23
percent of the sites that supported customer inquiries responded
adequately.
These figures are quite alarming. Seventy-seven percent of
mortgage companies are allowing potential customers to slip through
their fingers. These companies are failing to capitalize on one of
the important advantages offered by the Internet--the ability to
acquire new customers and support existing customers in an
incredibly personal, cost-effective manner.
By responding to only one in four inquiries originating from the
Internet, mortgage companies are missing substantial revenue
opportunities. This is truly astonishing, considering that the
financial services industry spent approximately $500 million in
2000 on deploying Internet technologies to provide customers with
access to their financial data, as well as the ability to purchase
products and services. In addition, according to the Direct
Marketing Association, financial services firms are expected to
spend $17 billion by 2003 on direct marketing expenses, mainly to
attract their customers to the Internet.
With such large investments in Internet technology and direct
marketing, it is a shame that most companies in the mortgage
industry abandon their customers and prospects in cyberspace,
leaving their investments unrealized. When a consumer visits a
mortgage company, he or she expects to receive immediate
assistance. If consumers do not receive prompt service, they will
simply find another company that can provide the service. The Web
site "office" must provide the same level of customer service. A
mortgage company's Internet strategy must include
collaboration and customer follow-up to realize successful ROI.
Companies need to think of their Web site similar to their phone
system--a powerful communications tool for customer management.
To be successful, mortgage companies must connect their Internet
strategy to their existing operations at a local level. Customer
Relationship Management (CRM) and e-Collaboration tools can connect
the Internet strategy and local branch officers together, providing
superior customer responses both online and offline. The process of
merging an Internet strategy with CRM tools is known as "e-CRM"--a
requirement for a successful Internet strategy.
Key Elements for Online Success
There are four key elements to an Internet strategy that will
ensure it has a strong ROI:
1. Integrate your Internet strategy with your mainstream
business.
Treat your Web site as a communications tool connecting your
customers to your loan officers. Ensure that customer inquiries or
applications are directed to your loan officers on a local basis--
remember that a mortgage is a local transaction. Ensure that your
loan officers can follow-up on customer inquiries from the Internet
as fast as they can respond to phone calls. Waiting a day, or even
an hour, is too long in both cases.
2. Use the collaborative reach of the Internet to lower
your cost of operations.
Mortgage companies and professionals must continuously enhance
the level of automation to keep costs down. Mortgage companies can
use online collaboration tools throughout the loan process to
automatically update borrowers and partners via the Internet,
eliminating phone-tag and other time-sinks. In addition, a
collaborative Internet platform should provide the ability to track
loan pipeline and compliance in real-time across different loan
origination software (LOS) platforms.
3. Mandate online usage for every loan officer and
processor.
Your ROI for your investment in a robust Internet and CRM
solution will only be realized if everyone uses it. This is not an
option--it must become the way everyone works and
shares information.
4. Do not try to do everything online--in the end, your
customers count.
The Internet is an excellent medium to conduct business.
However, it cannot service every customer's needs all the time,
especially with a complicated transaction such as a mortgage. A
successful Internet business strategy should provide the consumer
with both online and offline options.
Establishing an online presence that features strong and
collaborative capabilities typically requires technical expertise
and money beyond that of small-to-medium sized mortgage company
budgets. Fortunately, there are several Application Service
Providers (ASP) and software developers who can provide
cost-effective, customized tools. Companies, such as Ellie Mae,
NetUPDATE, Dexma and nCommand can provide customer-centric Internet
tools with various levels of CRM and Collaboration. Higher degrees
of customization result in higher costs, but some of these vendors
can provide immediate strong solutions.
Selecting the Right CRM Technology
e-CRM technology comes in all shapes and sizes to perform
various functions. The functionality can range from simple online
contact managers to comprehensive customer marketing and status
tools. It is important for mortgage companies to identify specific
system requirements needed today, as well as to chart a long-range
growth plan, then compare possible solutions.
Once a list of potential solutions is established, the mortgage
company needs to establish a phased approach and desired
implementation strategy. Do not bite off too much at first. Your
first steps should get all your loan officers online. After this,
phase-in incremental functionality as your company comes up to
speed.
Successful mortgage companies must establish a comprehensive
Internet strategy, which includes collaboration and e-CRM. The
rewards for this effort will include increased loan production,
decreased costs and higher customer satisfaction. Mortgage
companies that do not address the Internet strategy as an
integrated part of their business will ultimately be forced to
compete at a disadvantage against those who implement the
strategy.
Tom Gonser is president and CEO of NetUPDATE Inc. He may be
reached at (425) 453-9950 or e-mail
[email protected].
