One of the first lessons I learned when I joined Lehman Brothers was to always remember what you did earlier in your career as that collective knowledge & experience will serve you very well going forward.
It happened when I started with Lehman Brothers (their mortgage-serving subsidiary, Aurora Loan Services, in Scottsbluff, Nebraska) in 2007 & again, in 2011 when I went to Nationwide Insurance (yes, the “We’re on your side” company with Peyton Manning as their spokesman), actually, Nationwide Financial as part of the Retirement Plans Operations division.
Aurora was probably a good 10-15 years behind what I had been used to at Citi with regard to their technology & business practices.
Nationwide, on the other hand, was more like 20-25 years behind the curve! Quite surprising!
Partly due to the company itself & partly due to the entire insurance industry.
Anyway, with today’s story, we’ll be talking about some service improvements that we were able to implement at Lehman/Aurora.
In late 2007, the company Operations group was scattered amongst 3 different sites in Scottsbluff, NE (Nebraska, not New England). But Lehman had already started building this brand-new $45MM facility for us.
Along with the physical transition to a state-of-the-art facility, we were also able to take advantage of Lehman’s significant capital investment to purchase a bunch of new technology.
We bought a new, cloud-based Aspect ACD/Automatic Call Distributor that was latest generation & came with all the bells & whistles you wanted.
We had a professional Workforce Management System to automate our call forecasting & staff scheduling function…much better than using Erlang tables (to figure out the number of reps we needed based on volume assumptions & desired service levels) and Excel to support the various staff scheduling tasks.
We had a new platform upon which to design & build a new IVR/Interactive Voice Response application.
We got a new home for our website & better tools to improve its appearance & functionality.
Things were looking good!
But one of the biggest challenges we faced was to change the (multi) decades-old perception of “This is how we’ve always done it & we’ll continue to follow that same path going forward!”
There is always room for improvement.
As a discipline of Kaizen (Japanese for “continuous improvement”), I strongly believed that you must always seek out opportunities to do things better…faster, cheaper, more accurately.
I immediately plant myself on the task force to redesign our IVR offering to our customers.
Basically, the IVR greets the customer & contingent upon properly identifying the caller as one of our customers, offers a menu of various choices to obtain different types of account information. It can also be utilized (based on customer ID, phone number dialed, originating phone number, answer to different prompts presented to the caller, etc.) to route specific calls to specific queues.
For example, if we can properly identify the caller, we can take a look at his account & perhaps notice, that we recently mailed him a letter regarding the required hazard insurance on his home. There’s a good chance that the customer is now calling us with regard to that letter. IVR can ask the caller a very specific question (“Are you calling today as a result of the hazard insurance letter you recently received from us?”) & if the caller were to answer “Yes”, then we would be able to route that call to a queue specifically designed to handle that type of call. Service representatives highly-skilled in that area would have that particular “call skill” in their profiles & be the first agents the ACD would look toward to handle the call.
In addition, when the call arrives at the rep’s desktop, his computer is already populated with the customer’s information & if appropriate, sitting on the proper screen needed to handle that specific type of call.
Similarly, if we’re able to identify the caller & see that the account is past due & the customer either “times out” (makes no selection on IVR) or requests to speak with a representative by pressing “0”, we’re able to intelligently & automatically route that caller to the appropriate Collections queue (30-days late, 60-days late, 90-days late, foreclosure, etc.), even if the customer dialed the Customer Service number. (We ALWAYS want to speak with a delinquent customer & with a trained Collections rep, too!)
The IVR is also capable of accepting customer instructions to make their monthly payment & the payment is processed same-day if the call is received by 7:00 PM MOUNTAIN TIME (remember that conversation we had a few stories earlier???).
Flashback: California customers (1 hour behind Mountain Time) would wait until the last possible moment to make their monthly payment WITHOUT A LATE FEE…right smack up to 7:00PM on the 15th of the month.
But the problem was THEIR 7:00 was really OUR 8:00 & they would miss the deadline for same-day payment posting.
That payment feature is very important for our customers as many insist on making their payment as late as possible…and there’s no such thing as a standard, set-amount late fee.
Every mortgage has their own late fee calculation…a certain % of the amount due…written into the actual note & that could easily run into triple digits!
One of the issues we faced with the current IVR application was customer utilization.
It stood at <11%! That means that only 1 in every 10 callers or so identified themselves when greeted by IVR upon calling us.
1 in 10.
I just came from a Citi retail banking environment (albeit, different than mortgage-servicing as a mortgage is not a transactional account…it’s a loan).
You don’t need info on your mortgage when you go to the mall. You can’t take cash from it. You don’t write checks against it or use it to pay your bills.
I always wondered what all these customers were doing calling my people.
I had my own mortgage for about 20 years… and in all that time, I called my mortgage-servicer once.
Once in 20 years.
I had received an escrow refund check in the mail & I wanted an explanation as to why & how they calculated that.
The rep was totally clueless & started reading something to me, which sounded like the proverbial fine print on a contract on something.
Midway through, I interrupted him, said “Thanks, but no thanks!” & hung up.
So why are all these customers talking with my reps? Why are my reps processing so many payments requests instead of the customers doing that themselves on IVR or our website (which were FREE, compared to the $20 we charged for doing it with a rep)!
I also came from an environment where well over 70% of our incoming calls were handled completely by IVR.
Here, we couldn’t get more than 11% of the customers to even identify themselves on IVR!
Something was up.
💡 < in case you can’t see that, that’s a symbol for a light bulb!
What were we using as a form of ID for the customer to enter the system & be immediately recognized? Upon calling, what was the caller asked to enter via his Touch-Tone pad?
We asked for his mortgage account number!
Mortgage account numbers are usually 12-16 digits long. That’s a LOT of digits to remember!
At Citi, customers could input their account # (8 digits), or their card # (16 digits, but they normally carry their cards with them or have them nearby) or their SSN/Social Security Number.
Relatively easy stuff.
Not sure there’s a human being alive who knows their mortgage account number without looking at their statement or having it written down some place.
(When I discussed this issue with the Service Committee, I opened by placing my wallet on the table, along with my phone, my car keys & all the cash I had in my pockets.
“We all work for a mortgage servicing company, right?”
“And I’d venture to guess that everyone in this room has a mortgage on their home right now, right?”
Again, everyone’s head nodded.
“Well, without looking anywhere…and that means in your phone, on a piece of paper you have in your wallet, nowhere…if you’re able to tell me your mortgage account number RIGHT NOW, you can have everything I’ve placed here, including being able to use all my cards, drive my car away & go into my phone for some really juicy information!”
No one said a word.
“Well, that’s what’s wrong with our IVR…you need your mortgage account number to get in! No one knows their acct # without looking at their statement or having it written down somewhere or in their phone!
“That’s THE major reason why our current IVR utilization rate is an embarrassing 11%!
“That’s why customers are paying $20 a pop to make their payments with one of my people instead of easily & quickly doing it themselves on IVR where it’s free!
“That’s why we get besieged with calls on the 15th as customers are calling my reps to make their payments.
“This is ludicrous! We must use other forms of ID as valid entries into IVR other than the mortgage account number!”
“But, Mike, the customers who regularly use IVR have no issue entering their mortgage number. Usage is pretty steady, month after month.”
“That’s EXACTLY the issue! The same customers are using the system every month to make payments. But what about the other 89% who aren’t using IVR? Those are the customers we want to START using IVR!”
I actually saw a few heads nodding with subtle acknowledgement.
This story actually ended well!
We started to ask for either the customer’s mortgage number or their Social Security Number.
Within a few months, IVR utilization more than TRIPLED!!!
With just a little in-house marketing (statement messages, prompts on payment coupons, stmt inserts, new upfront IVR greeting, etc.), there was no reason we couldn’t see utilization rise into the 50s, 60s & higher!
A win-win for the customer & the company.
Oh, someone actually brought up the lost revenue opportunities (the $20 per) from those manual payment processing that we would lose as customers migrated to IVR for their monthly payments.
After I glared at him, I said, “We’re called the SERVICE Committee! Service for the customer. The average manned call probably costs us in excess of $7 anyway. And since we basically eliminated over $30,000 a month on free fee reversals due to “goodwill”, we’re way ahead of our projected revenue position.
“And before anyone says that we’ll be losing some late fee revenue by making it easier for customers to make their payments…”
I never completed the sentence.
Oh, by the way, since my unit was providing some outstanding timeliness service for our customers & we had sufficient “rep availability” (agents waiting for their next call), I instituted a new practice in Customer Service whereby the rep, whenever we didn’t have a queue, would talk with the customer about IVR & our improved website if the inquiry or function they just handled could’ve been accomplished by the customer himself on either platform.
That helped tremendously in increasing our IVR utilization rate.
It was also instrumental (along with a number of different customer communication pieces & statement messages) to significantly increase our website usage.
Website utilization more than doubled in the first 2 months of the program.
Ya just gotta keep pushing.
Remember what you’ve done in prior lives/positions/assignments. Always put the customer FIRST in everything you do as you’ll soon realize that it’s also the best thing for the company as well as for the rep.
And, incidentally, our “highly satisfied” customers (as measured by telephone surveys conducted by an outside firm…5 surveys conducted per month per service representative) increased from 62% when I joined the organization to 75% in about a year’s time!
That’s an astronomical increase! Our survey partners were amazed with our results as they awarded us a special Gold medal for outstanding customer service!
Push, push, push.
Then push some more.
Never, ever be satisfied with this “status quo” nonsense…status quo is merely code for “falling behind” as the world is constantly moving forward!
Thank you, as always, for listening!