Recently we worked with a credit union frustrated and confused by their member satisfaction scores in their Mortgage Department. Over the last few years they invested in new tools designed to provide better transparency and flexibility; supported a wide range of mortgage options and provided a solid digital platform for applications, document submissions and informational exchanges and updates. They continuingly trained their staff and consistently meet their published timeframes for closings. Yet even though individual components received good scores from members their overall satisfaction levels trailed the expectations and goals of the organization.
After attempting many improvements, they asked us to look at their operational and survey processes and identify opportunities for improvement. Frankly, they thought they had a survey problem that we could fix using that “behavioral economics message stuff.”
We mapped out the mortgage customer journey and talked to some members about their mortgage experience. We observed a few mortgage applications at various stages and watched a few mortgage closings. The issue became obvious. While the credit union was doing great work, started the process well, set solid expectations and executed well at every intermediate stage, at closing, members dealt with a huge stack of complex documents that they had not seen in advance. These required significant explanations and lots of signatures. Member’s memory of their mortgage experience was significantly impacted by the final painful step in the process. What we found was a classic example of the Peak-End Effect.
What is the Peak-End Effect? Remember the last fireworks display you watched, in fact, think about every fireworks display you’ve seen. How did it end? With a massive, overwhelming display of light and sound, leaving you with a sense of wonder and awe. What about the last concert you attended? Almost without fail the band saves some of their most popular hits for the encore, leaving you singing and dancing as you leave the venue. And when you think back about those experiences you likely have very positive memories of those events. In Behavior Economics this is known as the Peak-End Effect. Memories are shaped primarily by two factors: the peak emotion you experienced during an event, and the way the event ended. That’s why thoughtful organizations try to end an experience with a strong positive note.
Armed with this information, we worked with the mortgage team to brainstorm ways to make the final step not less painful, but enjoyable. The team developed the concept of a closing ceremony. First, the team put many of the closing documents online ahead of closing, giving the members time to review and ask questions. When possible, down payment and closing costs were electronically collected, removing the need for members to bring that big painful check to closing. Next, the team identified a number of benefits and discounts that national and local merchants made available to homeowners and put them together in a welcome basket, along with a framed photo (or drawing) of the property. These, along with a formal presentation of the keys were presented to the members at the end of the closing ceremony. Later, when the satisfaction survey was delivered to the member it was accompanied by a photo taken at the closing memorializing the event. The result? The final step in the mortgage process left members with a very positive emotional experience and a significantly improved memory of the entire process. Survey results (and referrals) have shown a significant uptick.
Ignore the Peak-End effect at your own peril. When you do your member experience roadmap, pay particular attention to the way the roadmap ends. Focus on the final few steps in the process and work to make them enjoyable. Your members will thank you, both now and later.