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National Mortgage Professional
Mar 27, 2007

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 you. 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 properties. 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 business. 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 business. "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 interests. 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]
Published
Mar 27, 2007
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