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Proven Ways to Survive the Tight Job Market

Oct 13, 2001

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].
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