Lenders and brokers must work to build customer experiences rather than merely facilitating transactions, an industry consultant has said.
Jason Millett, director of MillStreet Consulting, has told the LIXI Conference in Sydney that market power has “flowed back to the customer”, and that lenders and brokers should focus on creating positive customer experiences throughout the acquisition process.
“When you’re engaging a customer from an acquisition perspective, it’s not about the transaction; it’s about the aspiration the customer has in fulfilling their dreams and expectations,” Millett said.
Customer engagement and customer experience throughout the mortgage process will ultimately trump price, Millett indicated. Millett urged lenders to focus on consumer engagement rather than price competition alone.
“When you look at the way in which the customer is so much more powerful, especially in a flat market that’s almost a declining market, the banks - in order to support their revenue plans - are driving hard on price. Regardless of that outcome, they’re still needing to ensure that the customer is engaged throughout the process. There are a number of experience principles that need to be applied well before the customer decides to engage the financial service institution, whether that’s the broker or the lender,” he said.
Creating customer experiences, Millett suggested, will help to drive customer loyalty, and lead to customers’ “personal advocacy for your brand and your product”.
“One of the key challenges is how does the bank or how does the broker – and I think the broker does this far more successfully – win the heart and mind of the customer by demonstrating that they actually value the interaction and the experience they provide to the customer?” Millett asked.
Millett admonished lenders and brokers to position themselves as customer advocates, and ensure that customer service and experience principles were understood by “everyone who touches the customer”.
Brokers, Millett said, had historically performed well in this regard. He indicated that mortgage brokers had positioned themselves between lenders and consumers as consumer advocates. Millett warned that lenders would have to reposition their service proposition to consumers in order to create customer loyalty.
“The majors could sit back and let the brokers continue to occupy this space, and they’d do that at their peril,” he said.