Every once in a while, a study comes along that provides real revelations that have the potential to change a marketing strategy. TransUnion did a study early this year called “Do Consumers Really Change Credit Behavior Before and After a Mortgage Event?” The study takes a holistic look at homeowners’ spending behavior when it comes to applying for a new mortgage, refinancing their current mortgage or paying off their mortgage. The study findings really shout out cross-selling opportunities for finance companies offering loans and other products and services.
The study discredits finance industry assumptions that consumers reduce credit card expenditures prior to and after applying for a mortgage. TransUnion says in their report, “…consumers applying for a new mortgage are on average 2 to 3 times more likely to initiate an auto loan or credit card account over the next 12 months.” Additionally, they found:
- New credit card applications increase (54 percent) for homeowners who pay off their mortgage
- Auto originations increase (47 percent) after a homeowner refinances
The findings make total sense for a number of reasons. Those who already own a home are probably spending some money to stage the property to increase the listing price and subsequent offers. Then there are all the moving expenses and expenses related to decorating a new home. In the case of refinancing and pay-offs, the lower payments typically mean consumers can spend more after monthly bills decrease.
This means that mortgage inquiries and other mortgage-related activities are solid intent indicators that you can leverage.
Intent information = very warm lead
Intent data is any information that tells you that a customer is ready to make a purchase or take a specific action. Intent data comes in many forms. Marketers have been using third-party data, with limited success, for years. Third-party external data companies provide intent data for a premium price. First-party intent data, like a mortgage activity, are far more reliable than third-party data. And less costly.
Why? Intent data typically provides sales with high-quality leads early on in the purchase cycle. This is valuable customer life cycle information. It’s use may help to shrink or eliminate the consideration and evaluation phase.
When it comes to intent data, reacting with immediacy makes all the difference in the world. Google’s latest focus is on micro-moments for that very reason. Your ability to respond immediately to a customer’s intent is crucial.
Consumers are less likely to consider competitors’ products or services if everything they need is easily accessible online. If you do not act quickly, you lose the prospect.
Self-service for cross-selling
I believe self-service options offer a unique customer engagement opportunity for full-service mortgage lenders. Online self-service can be used for far more than making payments and providing account balances.
Forrester reports that online self-service is the most widely used communication channel for customer service. Customers prefer the convenience (available 24/7), transparency of communications, personalization and the time they save with self-service.
For mortgage originators, personal microsites can streamline the path to the closing. They are also the perfect forum for cross selling a customer. A personal microsite is a great way to engage the customer, strengthen the relationship, close the loan and incorporate cross selling messages.
Consumers prefer to use a company’s digital technologies to get answers to their questions. This is not because consumers hate mortgage reps. There will always be a consumer need to talk to someone knowledgeable about the loan. What consumers want is timesavings. It is all about speed and convenience (24/7 availability).
Industry experts agree that engaging a customer during the first 90 to 100 days is the optimum time to cross-sell. Your new or returning customer is 5 times more likely to engage then than at any other time.
The TransUnion study validates this consumer pattern. When a consumer is applying for a new mortgage, refinancing or requesting a payoff it is the right time to cross-sell auto loans and credit cards.
We have found that when you deploy a personal microsite with relevant calls to action in an email or text message, you will beat marketing industry engagement averages, in some cases by as much as 11 points. Unique open rates average between 50 and 55 percent. The total open rates increase by 120 to 130 percent as visitors return to their personal microsite multiple times.
Digital transformation is not just about automating the back-end processes; it is about creating a personal buying and servicing experience. It is about sending the right message at the right time.
