Customers for lifeJoe Cornonetworking, transition, extended services, retaining customers
Most loan originating companies have plans for networking and
gaining additional business through customer referrals. Also,
originators repeat servicing for existing customers. Usually, this
is for their personal residences, and yet customers transition into
other facets of our business. Why not transition with them?
Like a wholesale institution offering various levels for a
retail lending company to work with it, a retail loan company needs
to offer extended services for its customers. It must offer
additional services to its customers in order to retain a large
percentage of existing customer base and referrals.
Studies have shown that the best companies, which perform loan
services at exceptional levels and utilize post-contact marketing
systems, retain only 10 percent of their satisfied customer base.
Their customers do not have a retained commitment to return to the
company for service. They go anywhere, as long as there is trust
and their loan needs are satisfied.
On the other side, a company that offers additional services to
its customers retains 70 percent of their satisfied customer base.
The old saying, "There is no competition for quality service," now
includes additional services to spur the customer to return to
The banking institutions do this with free checking, Christmas
savings plans, automobile loans and 24-hour Web site banking
services. As a loan origination business, what other services can
you offer? The remainder of this article will address other areas
of service. An additional service could be in land development. You
could network and pool consumer funds for land development. The
customer could invest in various land developments that could earn
higher yields than what the banks offer.
Income properties are another area. This is what most loan
originators focus on for their customers who have purchased their
primary homes and wish to invest in residential rental
Not all customers desire to be landlords, and this additional
service is typical for most lenders to offer. Make it part of, but
not the only, added service available to your customers.
Investing in commercial properties is an area that is mostly
untapped. For the customer who operates his own businesses and
leases or rents his office space, offering commercial investment
via Small Business Administration financing, along with other
commercial loan programs, can place this self-employed borrower in
the position of owning the property where he performs his
There are other people becoming landlords in commercial
properties, so do not neglect the employed customer that wants to
invest in commercial properties. For the most part, he does not
know that he wants to invest in such properties until the
opportunity is presented to him. If he is lucky, it will be. If you
are lucky, you will be the one doing the presenting.
Short-term investing in construction for resale is another
service. Constructing and selling a speculation home is an area
perfect for pooling funds. It is difficult to acquire speculation
home funds, yet through equity lines of credit on other properties
or pooled funds, a customer can fund a speculation home and pay
down his equity line when the speculation home is sold.
I have always recommended that a small builder utilize an equity
line against his own property or business line of credit instead of
obtaining construction financing every time he builds a home. There
are no fees when he draws on the line of credit; it can be paid
down when the finished home is sold and it will be ready and
waiting for the next home at no cost to use again. Of course, with
a zero balance on the line, no interest will be charged. This is
another service you could offer.
Some retail lending sources have pooled funds for or to offer on
short sales, remodeling for resale, distressed sales and real
estate option sales as an additional service. This is an investment
that is for short-term gain.
All licenses, bonds and laws must be met to perform the above
services. Be sure to check into all laws and requirements to move
your originating business into these areas. However, in the
meantime, I have an atypical idea for you to think about.
Create a plan - a strategy that each customer can review and
decide upon - that incorporates all of the above areas. Like a debt
elimination plan or credit repair course of action, create a course
of action that each customer will receive for his potential future
"Becoming a Landlord," "Commercial Purchasing," or "Short-Term
Property Investment" could be headings of the planned outline that
you would hand out to each and every customer when they are
purchasing their first primary residences using you and your
company to finance them.
The customer would immediately know of additional services for
future opportunities. Instead of post-marketing on their birthdays
and holidays (a very typical practice), send out letters on
investment opportunities, and vary the projects and investments
with quarterly mailers.
Incorporate refinancing and residential owner occupancy within
the mailer system. Actually pick up the phone and call them
periodically. Miracles do happen, and they would be amazed if they
heard from your company once in a while.
After all, the customer may not yet be ready to utilize your
additional services, but his friends and family may be. Mom and
Uncle Henry may already have their primary residences secured, and
you will not gain from the referral unless you market to their
Joe Corno is president of Utah-based We Be Consulting and
Seminars. He may be reached at (801) 836-2077 or e-mail [email protected]