In 2022, large tech companies like Zillow and Quicken are nearly synonymous with a home purchase in the mind of the consumer. Zillow, for instance, boasts a whopping 200 million monthly users, providing extensive access to potential borrowers across the country.
These major players didn’t become household names in the home-buying space for doing things wrong. So what can other companies—the local lenders that make up 86% of the market—learn from what the big names are doing right?
In a recent episode of the Clear to Close podcast, hosts Alan Parris, Brian Traeger, and Anthony Ianni spoke with Bryan Mecsey, Maxwell’s VP of Sales and a mortgage tech professional who has worked for both Zillow and Quicken. Their conversation focused on the impact of large, online real estate platforms along with the inspiration these companies can offer to smaller lenders.
What do big, online companies get right?
Above all, large real estate and lending platforms have customer experience down to a science. Parris relates a common occurrence: Even after purchasing his home, he still found himself drawn to Zillow, simply because being on the site was enjoyable.
When it comes down to it, that’s Zillow’s whole gig. They’re not selling units; they’re selling an experience. They’re fostering trust, not pushing a product. The value of their company comes in keeping the customer happy and engaged.
Mecsey says that powerhouses like Zillow and Quicken actually start with customer experience in mind. They solve for a customer experience problem and develop their product to make the most impact in that customer journey. And they’ve proven that they can do it really well.
Where do they fall short?
While homebuyers and borrowers obviously appreciate the convenience of a well-crafted online experience, that’s only one piece of overall customer experience.
Parris calls to mind a resort getaway. Anyone who’s been on a vacation will agree that what makes a resort experience great is the personal customer service. The calming presence of kind, professional humans yields a noticeable attention to detail that makes the whole experience exceptional. That type of interaction cannot be duplicated online.
The concept is similar within the lending space. A lot of borrowers crave a personal connection when making the biggest purchase of their lives. Big, online companies can’t provide that. But this is the part of customer experience where small and midsize lenders are poised to rise above.
Local lenders also have an advantage when it comes to referrals. Real estate agents know that a lot of times a pre-qual letter from a big online lender isn’t worth the paper it’s printed on. They’ve seen too many deals fall through. When smaller, local lenders step up to make things work in the pinch, those agents know where to send their clients in the future.
What can local lenders learn?
Big, online companies have invested extensively in creating a tech-led, frictionless customer experience. They’re giving borrowers quick access to low-rate loans from the comfort of their own home. That’s attractive to a lot of consumers, and as such, smaller lenders should pay attention. “Keep your finger on the pulse of the tech climate,” Mecsey says.
With loan volume declining in today’s market, now is a great time for local lenders to reevaluate their tech needs. Parris notes that some companies use times of economic uncertainty to batten down, while others use it as an opportunity to become prolific.
This period of market slowdown is a great time to ask questions like:
- How can my company be more efficient and creative in the tech space in general?
- What can we learn about online experience from the big guys, and how can we tailor that to our target market?
- How can we position our customer experience strengths better in order to compete against the advantages of a big online company?
As you consider these questions, listen to the complete Clear to Close episode, where the conversation goes into depth about targeting addressable markets, crushing consumer pain points, and quantifying efficiency into basis points.
The bottom line is that now more than ever, local lenders have the opportunity to learn from large, tech-forward competition and fuse those lessons with their unique competitive advantages.