Which one of your competitors is stealing your business? With a continued reduction in refis and anticipated rate increases looming over 2022, competition for purchase business will require lenders to dig deeper into data to stay ahead of the game. Unprecedented loan activity during the last two years gave some lenders a pass in understanding loan losses at the customer level – why bother trying to understand the reason one borrower left when there are hundreds of others lined up behind them?
But a smaller refi share means lenders and servicers can’t afford to let customers slip away without understanding where they went, why they left and what to do about it.
You Don’t Know What You Don’t Know….And That Could Cost You
There’s no getting around it. If you don’t know why – or to whom – you’re losing customers, it could cost you. You may think sophisticated loss lead and payoff analyses is reserved for the big guys, but no matter the size of the book or servicing operation, this kind of research is affordable and can yield a return on investment that more than pays its way. And in the process, it can help make your marketing smarter, your strategy and benchmarking more on point, and your customer retention efforts more effective.
But what’s the best approach to incorporate this kind of data analysis into your research platform? Setting up an in-house operation isn’t practical which is why First American Data & Analytics offers a cost-effective way to tap into business intelligence that will inform better decision making and, as a result, can improve performance.
Here are four important tips to keep in mind to guide your loss lead analysis strategy for bottom line results.
- Decide on the level of detail that fits your objectives.
Some lenders are content with basic information that simply tells them which competitors are picking up their business. This is in fact, the most important element in understanding a lender’s shifting market position. So, if knowing which competitor picked-off your customer is the only insight you get, then you can make some key strategy decisions. Our experience shows that a lot of lenders are surprised by what the analysis reveals in terms of competitor activity, so it isn’t as intuitive as you might think.
Other lenders and servicers want more granular information. They want to know not only what competitor closed the loan, but also the loan amount, loan type, estimated interest rate and even the loan officer involved, all of which is provided by First American Data & Analytics.
A fully customizable solution allows you to prioritize the most valuable information for which you have the resources to make business intelligence decisions that will directly impact the bottom line.
- Determine the analysis cadence that meets your objectives and budget parameters.
You can set up the frequency and scope of loss lead analysis in several ways including ongoing monitoring, one-time projects, historical transactions (such as where did the borrower take their business) or a combination of any of these. Ideally, your analysis is set up on a recurring monthly basis so that you receive a regular cadence of information on your full book of business that not only provides current snapshot data, but also will build trend data over time. This allows you to monitor how your company is performing against its competition in light of external market conditions that you don’t control, such as interest rates, as well as elements that you can control, including marketing, products and customer service performance.
Some lenders and servicers use a more targeted single-project approach to parachute in for one-off or recurring deep dives. This can be useful if you want to focus on select geographies for market intelligence in lieu of, or in addition to, ongoing monitoring of the full book.
In some cases, lenders and servicers want to analyze historical loans using specific parameters to uncover trends and findings that will inform future decisioning. Having the ability to slice and dice the data for analysis based on specific research objectives will provide maximum flexibility and yield the most effective results.
It’s important for companies to conduct an ongoing review of how the analysis is being used (and the positive or negative outcomes from it) to ensure the timing and scope is on point and adjusted as needed.
- Consider adding a more broad-based look at overall market intelligence to enhance individual borrower analysis.
If you want to take your analysis to the next level, adding overall macro market intelligence, such as competitor market share, to micro analysis on individual borrower activity can be a powerful one-two research punch. The First American Data & Analytics MarketView™ solution provides market share reports for all transactions or can be broken down by loan, sale or loan officer with statistics for the top 100 title companies and lenders. Reviewing your market position at the national, state or even county level will help you prioritize and clarify strategy and benchmarking for marketing, hiring and product development.
- Commit resources to do something with the data analysis.
Some companies only go half-way in playing the data analysis game. They commit to the analysis but get stuck when it comes time to taking steps to resolve the issues it uncovers. Business intelligence is one of the most powerful tools you have at your fingertips. Make sure you communicate the findings and disseminate the data to create planning strategies that can help course correct when and where needed. In this way, the data analysis will generate bottom-line results that truly move the market share needle in your favor.
If you want to find out more about how loss lead analysis can be a game changer for your company, speak with one of our experts by clicking the button below.