Who's the customer?
This week: fewer words, more video. If you enjoy what you watch and read, hit the thumbs up at the bottom of the email. The thumbs up helps me know that people are reading and the content resonates.
Last week, I spoke at the Customer Experience Virtual Conference on “The Human Experience of Your Digital Customers.” If you didn’t attend the virtual summit, no problem! I guess one of the benefits of a virtual conference, when you’re the presenter, is that you can re-share your message with others relatively quickly. So that’s what I’m doing for my newsletter this week.
The first 9 minutes of the video is me sharing a rather horrifying customer experience I had with my mortgage servicing company. I’ll leave that as a teaser and hope you enjoy the video.
The Human Experience of Our Digital Customers
Killing the Myth of Soft Skills
Who's the customer?
If you watched the video and heard my horror story about trying to work with my mortgage servicing company, you might reasonably question how a company could get customer experience so bad, especially if you had read on the company’s investor-facing website that they provide “a loan process that combines both human interaction and technology into a remarkable customer experience."¹ Remarkable indeed!
The problem is that, naturally, I’m not their customer. Let’s revisit the simple business model I shared in the first issue of this newsletter:
Let’s sum up the relationship in terms of money: Shareholders invest money in hopes of generating a return on their investment. Employees receive money in exchange for their time and work for the business. Customers give money in exchange for a valuable product or service.
You might think that because I’m writing a check to my mortgage servicing company each month, I’m "giving them money in exchange for a valuable product or service.” Not so! Yes, servicing my mortgage is a valuable product and service, but I’m not the one paying them to provide that service. Every dollar in my mortgage payment—principal, interest, escrow for taxes & hazard insurance—it all goes to the owner of the mortgage. The mortgage servicing company is just the middleman collecting the money and distributing it to appropriate parties. The one paying them money is the owner of my loan.
How do I know that my mortgage servicing company is not the owner of my mortgage? It says so in their letter to me:
“We’re pleased that the owner of your mortgage loan has entrusted us to service your account.”
Of course they’re pleased. The owner of my loan is paying them money!² If I’m not the one paying them money, I’m not the customer, and if I’m not the customer, it shouldn’t be a surprise that I’m getting a subpar customer experience³.
One last thought on this. I suspect CX for mortgage servicing will get worse before it gets better. As more consumers begin their search for a home loan online, the customer journey will become increasingly split, leading to a poorer experience for consumers. Why? If you’re searching for a loan based on interest rate, the competition is fierce, so you’ll likely choose the company that advertises the lowest APR that also has on average 4.5 star reviews (you’re not a sucker—you know what good CX looks like). The problem is that these companies are mortgage originators—they only represent the pre-sales side of the customer journey for your loan. That 4.5 stars is only for half the journey. Once the loan closes and is sold, another company picks up the loan and your customer journey continues with whichever mortgage servicing company the owner chooses. You chose a 4.5 star company for the pre-sales side of the customer journey. For the post-sales side of your customer journey, your new mortgage owner picked whoever was cheapest (and maybe whoever gave them the best customer experience, which, I dunno, maybe also included a steak dinner and tickets to a baseball game). And you’re stuck working with a company who doesn’t view you as a customer. Womp womp.
This makes me curious if there’s an opportunity for a CX-focused financial institution to own the entire customer journey to both originate and service the loan, and market that service as a competitive differentiator. You may already be able to find this type of service at a credit union, which exists to serve its members, not shareholders.
Etc.
I love this interview with Patrick Campbell of ProfitWell. Great focus on customer growth through focus on retention strategies, the importance of asking why, and being disagreeable.
“We’re here to honor the person who pays money to us,” she says. “I think we often lose sight of that.” Jeanne Bliss: Why ‘how’ you grow is just as important as ‘how much’
Thomas makes moves mid-crisis to connect critical industrial suppliers to buyers using FullStory + Optimizely (disclosure: I work at FullStory)
I’m paraphrasing a bit to protect the accused.
Yes, it’s possible that the owner of my loan and my mortgage servicing company are related, e.g. the serving company could be a subsidiary of a larger company that invests in real estate investment trusts (REITs) and has a mortgage servicer in its portfolio to lower its costs of servicing the mortgages in its REITs.
Just because you’re not a paying customer doesn’t mean the customer isn’t incentivized to offer a good experience. Take e.g. Google search, where their customers are advertisers paying for the attention of people making searches on Google. Google recognizes that they have to provide the best search experience or its users will go somewhere else, damaging the value of the product they’re able to provide to customers.