According to the MBA’s 1st quarterly National Delinquency Survey, foreclosure starts and delinquency rates are at the lowest since Q2 of 2000. "The delinquency rate of 4.77 percent has returned to typical pre-recession levels and is lower than the historical average of 5.4 percent for the time period from 1979 to the first quarter of 2016,”said Marina Walsh, MBA'S Vice President of Industry Analysis.
As the market changes to reflect the decrease in delinquencies and foreclosures, there are a couple of different strategies servicers are using to shift focus in order to maintain profits:
1.Focus on Performing Loans
Some servicers are transitioning to more of a performing loan focus, thereby expanding their portfolios. As departments are thinning, servicers are given the choice of either downsizing or moving employees into different job roles. This is a viable option, requiring servicers to identify adaptable personnel to cross-train them for other positions within the organization.
However, the challenge still lies in the extra costs accrued through increased compliance operations, which, in turn, negatively impact loan margins.
2.Identify New Sources of Revenue
One strong option to the market changes is to identify new ways to generate more profit per loan on existing portfolios. If successful in maintaining or even increasing margins, servicers can place themselves in a better position to keep personnel and cross-train them rather than eliminate jobs. This is where identifying new sources of revenue through transactional document communications such as mortgage statements and letters is the answer. Servicers have the opportunity to utilize transactional documents to cross-sell and upsell services to performing loans, as well as utilize affiliate advertising to create new revenue streams.
To learn more about how transactional document communications can help you net more profit per loan, click here.
Virtually every financial institution loses some customers, but few ever measure or recognize how many of their customers become inactive. High turnover rates often occur when a bank or credit union invests an enormous amount of time, effort and expenses building the initial customer relationship, only to let that relationship go unattended. As a result, the customer becomes disengaged and more likely to walk away, leaving the bank in a position to spend another small fortune to replace them. In fact, according to the White House Office of Consumer Affairs, it is 6-7 times more expensive to acquire a new customer than it is to keep a current one.
Based on these facts, the easiest way to grow is to focus on retaining current customers while increasing incremental product spend. Once you decrease turnover rates, it’s often possible to significantly increase your growth rate because you’re no longer forced to make up lost ground just to stand still.
Increasing customer retention often starts with consistent communication, branding and personalization.
1. Provide Proactive Support
Usually, customers who have problems with products and services will not communicate the issue. According to Lee Resources International, for every customer who complains about an issue, there are 26 who stay silent. Instead, they take their business elsewhere.
A best practice for “breaking the silence” and providing proactive support is to utilize the space on digital and print documents to request feedback and encourage open dialogue.
2. Value Proposition Reinforcement
Value propositions are a clear statement that should:
3. Add a Personal Touch
As technology continues to evolve, customers are expecting more personalized communications that align with behaviors, needs and wants. According to “The Cost of Poor Customer Service” by Genesys Global Survey, 38% of consumers say personalization is important to the customer experience.
Marketing space on digital and print statements, letters, notices, etc. can be optimized to target customers with products and services that best fit specific needs. A best practice is to utilize existing customer data to identify specific criteria, including account balance, zip code, and spending habits, to name a few. From there, leveraging dynamic communications on all digital and print documents creates a timely, effective customer experience.
While it’s next to impossible to have a 100% retention rate, financial institutions can drastically decrease turnover by proactively approaching and maintaining current customer relationships.
To learn more about customer retention through transactional documents, contact us at email@example.com or click here.
According to KPCB mobile technology trends, mobile digital media time in the U.S. is now significantly higher than previous years at 51% compared to desktop usage (42%). We all know the mobile device world takeover is driving consumer expectations and shifting market reactions. Because of this trend, companies who want to continue to be profitable and grow are finding themselves rethinking their online customer experience — namely, their mobile experience.
When looking to improve your customers’ mobile experience, it is crucial to look at the entire scope of your online communications. Not only do customers access your website, they also access other platforms such as online banking and ePresentment. If the design, usability and ease-of-use do not carry seamlessly across these platforms, your customers will be less engaged and more inclined to move their business to one of your competitors with a better mobile experience.
The most important factors to consider with the mobile experience are responsive design, applications, marketing, and two-way messaging.
Mobile Responsive Design
Adobe reports that eight out of ten consumers will stop engaging with content if it does not display well on the device they are using. True mobile responsive design means your site is designed to provide an optimal viewing experience — easy reading and navigation with minimum resizing, panning and scrolling — across a wide range of devices. Added bonus to mobile responsive design: you will improve your online search rankings because Google’s search engine gives preference to mobile responsive design because it understands the importance of delivering a user-friendly mobile experience.
According to Smart Insights, apps account for 89% of mobile media time, with the other 11% spent on websites. Furthermore, statistics show that the average American spends more than two hours a day on his or her mobile device. A mobile application will ensure you are visible to your customers at all times, as well as provide easy access to your business’ digital communications.
In order to increase their changes of more downloads and return customers to their mobile applications, many businesses are also digitalizing their loyalty programs and making it possible for customers to collect rewards via their mobile applications.
Marketing Land estimates that by 2019, mobile marketing will represent 72% of all US digital ad spending. Any savvy marketer knows that the key to future success is adapting to and optimizing their marketing efforts for the mobile market. What’s equally important is one-to-one mobile marketing. Email engagement, apps, programmatic display, geo fencing and beacons have shifted mobile marketing from mass messaging to targeted, personalized messaging.
Two-Way Mobile Messaging
App Annie reports that more than 2.8 billion people reached out and made connections using their mobile devices in 2015. This means that SMS, email and mobile app two-way messaging are expected in today’s market because most people would rather not pick up the phone to place a call. By allowing your message recipients to reply and hold a digital conversation with a representative, you will increase customer engagement and loyalty.
It is imperative that you and your vendors invest in the technology necessary to staying ahead of mobile digital media demands. By actively pursuing the above factors, you will increase your market value and improve customer online engagement.
To learn about how Lanvera can help your customer communications go mobile, contact us today.