STRATMOR: Online Testimonials More Valuable to Lenders in Middle of Sales Process than at Start

STRATMOR Group, Greenwood Village, Colo., said as competition for the mortgage borrower’s business heats up, a growing number of lenders are looking to online testimonials to help bring in sales–but for those testimonials, timing is everything.

Data from STRATMOR’s MortgageSAT Borrower Satisfaction Program of more than 150,000 borrowers over the past 18 months show 83 percent of borrowers said they were likely to recommend a lender. Of that 83 percent, 70 percent said they were likely to comment on social media.

But MortgageSAT Director Mike Seminari said if testimonials had a one-to-one correlation to referrals, then one of every two loans should produce a referral, when in fact, only 14 percent, or one out of every seven borrowers, generates an actual referral.

“The data clearly indicates that there is not a one-to-one relationship between collecting an online testimonial – positive comments on social media – and receiving a referral,” says MortgageSAT Director Mike Seminari. “In fact, our data shows that less than two percent of borrowers say they discovered their lender (or loan officer) by means of an online testimonial search. Instead, 95 percent of borrowers who searched for testimonials online already knew who they were searching for, whether because of a referral or an existing relationship with the lender or loan officer.”

The study showed referrals can come from a variety of sources: real estate agents, financial planners, friends, relatives, co-workers, builders or other acquaintances. All of these referral sources share a common thread–they are all, on at least some level, trusted advisors.

“The home-buying process is such a substantial financial event, and because most borrowers are confused about the ins and outs of the process, it’s natural for them to lean on the wisdom of others,” Seminari said. “With so many lender and product choices and no easy way to sift through them, tapping a trusted friend, colleague or professional advisor can help to quickly narrow the field and make the decision more manageable.”

Seminari said instead of focusing on testimonials, lenders instead work to create “raving fans”–borrowers who are so pleased with their mortgage loan experience that they sing the lender’s praises to anyone who will listen.

“Companies are built, and revenues are grown upon a base of ‘raving fans,'” Seminari said. “Word-of-mouth referrals are most often made by these delighted customers, which suggests that they are the true impetus to the loan process and sit at the top of the sales funnel. Testimonials have their greatest influence on a potential buyer after that buyer has been referred by a raving fan and is ready to read what others are saying about the lender online.”

The study can be downloaded at