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Deeper Thoughts
The True ROI of Bad Service
12.06.2022

Just about every business in the mortgage and real estate industry acknowledges the importance of client service and assures prospects that they’ll experience outstanding service levels should they become clients. After all, this is a relationship-based business and decision-makers quite frequently make their business decisions based upon the caliber of their interactions with other people.

Of course, we also know that, for some, “client service” is little more than lip-service. 

The overall trend away from prioritizing customer service

The mortgage industry is not immune to the overall economy’s trend away from prioritizing customer service. How much time have we collectively spent trying to solve a problem with our own personal banks, utility providers or airlines, only to be funneled into an understaffed and unempowered call center with an average wait time of 45 minutes? (Of course, many of those call centers offer via voice prompt to call you back as soon as possible if you prefer not to wait. Try it sometime and see if it actually happens!).

Unfortunately, that kind of thing happens in our industry as well. Even while we all tout our own superior customer service teams.

The true test of customer service

One of the best ways to gauge the true priority a company gives to client service is to deal with that company when times are good. Really good, in fact. As in, historic refinance origination volume good.

How many times did we hear about firms that simply couldn’t keep up with the volume in their operations during the height of the recent refinance boom? And if they couldn’t keep up with producing the loans or services that were bringing in that record revenue, how well do you suppose they kept up with their clients on things like communication?

We’ve heard some of these horror stories from our own friends, peers and new clients recently. Stories about being treated like a number instead of a paying customer while trying to solicit some level of customer service. Voice mails and emails that went unanswered. Scheduled calls that never came. Lack of ownership of an issue at the vendor end or, worse, lack of empowerment to solve the problem.

I find—and I also hear this from many of my friends around the industry—that how well a vendor communicates with me and how earnest that vendor’s efforts are to solve any issues I have with that vendor’s product or service, especially when things are going well for that vendor, tends to stick with me. In fact, it comes into my mind each and every time I build a new annual budget or am approached with other opportunities.

Don’t underestimate the costs of poor service

Especially in the largest of businesses—in any industry—the budget-makers tend to undervalue the return on little things like account reps making it a point to keep customers in the loop as they work to solve an ongoing issue. Or even from reaching a human being in under 30 minutes when said client calls. Those budget-makers tend to view these things as costs, even inefficiencies.

But the true cost can be measured better when a strong market sours. Or a client needs to revisit its own costs. I’m still waiting to see those same short-sighted budget-makers truly dig into the ROI on the decisions that enfeeble their customer service efforts. If they did, they might find the losses, especially when a market turns, are much greater than the pennies saved in the first place.

 

We at LodeStar are grateful to all of our clients, friends and colleagues who take the time to view Deeper Thoughts. Please consider having a look as well at some of our other great content, including our podcast, “LodeStar’s Lending Leaders,” and A Tale of Two Mortgages: an original webcomic for the mortgage industry, presented by LodeStar.”

As always, your feedback is welcomed and appreciated!

 

 

 



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