Episode 13: Setting Customer Expectations

Conventional marketing wisdom would suggest that you want to meet or exceed customer expectations if you want to have happy customers. This is fairly common sense. The problem that we sometimes run into is that many times our customers expectations are grossly misaligned with reality.  Imagine you have a client that has seen you present at a First Time Buyer workshop.  They are extremely excited about the prospect of buying their first home.  You have given them hope, courage, wisdom and inspiration from your words at the presentation.  They follow up with you after the presentation to discuss the options for that $400,000 mortgage they are going to need to buy their dream home.  Sounds fantastic.  There is only one small problem.  They only qualify for a $250,000 mortgage.  You can see the look in their faces.  The dejection, the disappointment.  You know that they will likely walk out of your office and never return.

So how do we deal with unrealistic customer expectations?  Well, we really have three options at this point.  We can do one of three things:

  1. We can meet the customer expectations
  2. We can abandon the customer completely
  3. We can change or shape the customer expectations

Often times option 1 is simply not feasible.  In the example above, if the client doesn’t qualify they don’t qualify.  The sooner we can recognize what the customer expectations are and assess whether or not we can realistically meet those expectations the better off we will be.,  Too often I have watched good mortgage brokers spend a great amount of time, energy and money trying to meet unrealistic customer expectations.  While there may be times when you can succeed at this the vast majority of the time you will not be able to pull off that miracle and meet those expectations.  Time is valuable so don’t waste yours or your customers.  Recognize if it is not possible or likely to meet your customer expectations early in the game.

So if we decide that option 1 is not an option at all then we are faced with option 2 or 3.  Obviously option 2 is the least desirable option as it means that we do not earn our customers business and likely have them walk away unsatisfied.  That said, you should ensure that you at least consider option 2 before moving on.  We’ve discussed this before and there are certainly some customers that you really should just walk away from.

So ideally we want to shape or frame our customer expectations.  Let’s talk about two scenarios that I see regularly in our business.  The first is setting customer expectations with respect to documentation requirements.  As brokers we know that documentation requirements seem to be increasing not decreasing.  We discussed this at length at our last team meeting and one of our agents shared a strategy that had worked well for her.  She started the client conversation talking about the fact that the lending landscape has changed, over the last few years, and continues to change.  This is not news to your customer.  The media has made sure they all know about the rule changes that have gone on so this is an easy place to start.  She would then go on talking about the fact that she would be their advocate to the lender and as such they needed to understand that if she came back requesting documentation the customer should know that she had already had the conversation with the lender, had already fought the battle on the requirement and lost.  That if she was asking for it then they could rest assured it was a document that was required.

This does a couple of things.  First, it puts you on their team and second it helps diffuse and potential future conflict in the event that you do need to come back and ask for more documentation.  That said you are always better off to ask for more up front than you will likely need.  This is a lesson it took me the first four years of my career to learn.  I would be timid to ask for everything up front and as a result would have to make multiple requests back to the customer causing even more frustration than if I had simply asked for more than I needed up front.

The other area around setting customer expectations is the scenario I opened with and was brought up again this week by one of our agents.  I help run an affordable housing program geared at low to moderate income households.  As a result some of the clients that we get are tight on the income side of the equation.  Sometimes they are new to Canada or simply just starting out.  The problem the agent was running into was the fact that once she took an application (online or by phone) and crafted a nice email talking about documentation requirements and pre-approval amounts the client would often simply disappear.

This was usually because they had hopes, dreams and expectations of buying their $400,000 dream home and she had to tell them that they only qualified for $250,000.  We talked about framing the initial conversation in such a way that she could first get a sense of what their expectations were.  If they were out of line with what she expected they might qualify for then she would shift into talking about the fact that the $250,000 home they would likely qualify for would make a great stepping stone into that $400,000 dream home.  She could talk about the potential of principal reduction and equity increase while their income increased and really allow them to see the possibility.  This would help them get excited instead of deflated.

There are a number of other areas where setting our clients expectations can really help to make a more smooth transaction.  What are some of the methods that you employ to set your customer expectations?

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