Members on Mortgages: Use Focus Groups for Better Feedback

Illustration of a house made up of people figures
By Daryl Jones

7 minutes

Lessons learned from borrower focus groups

No one knows better what a credit union’s members want and expect from a mortgage program than the members themselves. So why not ask for their input and ideas?

As sensible as this suggestion may sound, very few CUs invite members in to provide frank, open-ended feedback on what is being done well—and not so well—through the stages of mortgage lending.

However well-intentioned, the anonymous, impersonal questionnaires sent by many mortgage departments keep customers at arm’s length. Yes, e-surveys can serve a purpose. They collect ratings, pointed feedback and short responses on service delivery. But if a CU wants to improve or drastically redesign its lending processes with the aim of growing mortgage volume and profitability, more detailed input from members is critical.  

Preparation and Execution

Typical members don’t understand the complexities of mortgage lending, including compliance and mortgage systems. But while they may not be able to help CUs innovate in those areas, they can and often do offer illuminating views from their unique experiences. It has been our experience that the best way to harvest insights from members’ perspectives is through carefully planned and facilitated focus groups. The best practices that follow help ensure the success of such meetings.

Create “personas” to identify target borrowers. Working with mortgage lenders and other staff to define specific attributes of the members they serve will aid in creating relevant questions and discussion topics for the focus group meeting. Examples of borrower attributes that will combine to form such personas as “high tech,” “high touch,” “returning member” or “busy millennial” include: life stage; income level and source; preferred channels to shop lenders and research mortgage rates and terms; technological capabilities and preferences; preferred application channel (branch, call center, online, mobile); communication methods (phone, text, live chat); and non-negotiables the CU must be able to support (like special terms for first-time homebuyers and construction loans).

Invite recent borrowers. To collect the most meaningful feedback, seek out members who have closed a mortgage loan in the last 90 days. Also, be sure to invite members who joined the CU to get a mortgage. They are more likely to participate in focus groups and are often impressed that their new financial institution is asking for their opinions.

Provide an incentive. Gift cards and the lure of free, tasty appetizers and drinks work well. However, be clear on the requirements for participants to receive the incentive. At a minimum, they should be expected to participate and to stay for the duration of the meeting. In case couples come, determine in advance whether participation gifts will be given to each person or to each household.

Aim for convenient scheduling. Members who volunteer for focus groups are donating their time. Acknowledge this with a member-friendly schedule. Evenings work best, ideally between 6 p.m. and 9 p.m., with a maximum time slot of two hours. A longer session will drastically reduce attendance.

Weigh the pros and cons of meeting onsite versus offsite. Focus groups in comfortable onsite meeting spaces typically have strong participation rates and proceed smoothly. Offsite meetings can entice greater participation and make interactions less formal, but also present unforeseeable distractions, such as a noisy crowd at a restaurant.

Plan for the flow of the session. Keep the focus on key areas of impact or “moments of truth” that matter most to borrowers, such as ease in completing an online application, time from application to loan decision, ability to monitor underwriting and processing progress, and on-time closing. These stages and interactions must be identified in advance so questions can be structured to get the most effective feedback.

Think about the borrowers’ side of the transaction. Mortgage lenders do this work every day and know every nuance of the loan process, but members don’t. Flipping one’s perspective to imagine what the mortgage process looks like from the outside in can aid in preparing questions and topics for discussion. What information are borrowers asked to provide and when? How many people do they deal with from application through closing and servicing? How long do they have to wait for a loan decision and closing date?

Don’t let one person dominate. The whole purpose of the focus group can be threatened if a frequent talker tries to influence other participants or discourages them from speaking. Announce at the beginning that the goal of the session is for everyone to have the opportunity to add ideas for every question. If the meeting’s “over-contributor” shows evidence of having forgotten the goal, a gentle reminder should get the meeting back on track.

Reaping the Rewards

Focus group sessions have the potential to unearth previously unknown issues, such as service problems at particular branches, procedural lapses, delays in responding to inquiries or online functional glitches—with the best feedback coming from well planned and facilitated sessions. Here are a few key observations harvested by CU focus groups:

  • Members are unfailingly willing to share their stories, experiences and suggestions to help their CU grow. Contrary to common belief, focus groups rarely turn into “gripe sessions” from borrowers who’ve had bad experiences. Members seldom attend with any ulterior motive. They genuinely want to help—and then claim their gift cards.
  • For most borrowers, the “digital experience” includes online access. As much as industry observers push for mobile capabilities and improvements to mobile mortgage applications, when borrowers think of applying for a “digital loan,” many picture sitting down at their laptop or PC with their paperwork laid out next to them.
  • Online applications are a popular option. Borrowers in one focus group said they are much more inclined to apply for a loan via computer than in person at a branch or by phone. At the same time, these members cited obstacles like a lack of clear, concise instructions and requirements to submit documentation electronically.
  • Post-application communications are often handled by phone. This practice may shift as CUs improve their web-based and mobile mortgage systems, allowing members to follow the progress of their loans online and communicate via text. Online chat during mortgage processing is a nice touch, but not a requirement. If a CU supports online chat, it must provide an outlet for members to jump from chat to phone if they wish.
  • Borrowers will support, or demolish, lenders’ hypotheses. Mortgage and/or marketing managers in charge of focus groups frequently have preconceived notions of who their borrowers are, as is evident in the creation of their borrower personas. It’s surprising how often the reality of the members who show up for focus groups defies these perceptions. Those differences are themselves useful.
  • Rates continue to rule. Despite many stubborn arguments from CUs that their reputation for quality service is driving new members in the door, many homebuyers carefully compare mortgage rates and fees. If member satisfaction and mortgage process ratings are roughly equal, they will choose the lender with the best pricing.
  • Borrowers will be quick to point out where processes negatively impact service. This input can be a gold mine for process improvement. As an example, frontline staff are frequently not adept at answering mortgage-related questions, although they may be the first place members go for information. When focus groups turn up this shortcoming, enhanced member service training and online mortgage “cheat sheets” listing answers to common questions may be in order.
  • In addition, many borrowers express disappointment in the engagement with their CU throughout the mortgage process. They can contact their loan originator or processor with questions, but many suggest they’d like the CU to be more proactive in keeping them informed about progress.
  • Finally, there is often a disconnect in the transition to servicing. Warm hand-offs from loan origination to servicing are rare. Instead, borrowers may receive only a cryptic and impersonal mailed notice outlining the loan servicing process. If this complaint surfaces, it may signal the need to connect better with members at this stage—and an opportunity to further cement member relationships.

Borrowers don’t know what they don’t know. Don’t expect members to offer ideas on process problems. For example, ask if they would be more willing to participate in a post-close survey if the CU sent a text rather than an e-mail, instead of asking more generally how they think the CU could increase survey participation.

Conducting focus groups to gather borrowers’ perspectives about mortgage lending can provide great value in improving service and offering a new avenue to connect with members. In the sessions I’ve facilitated for clients, members have walked away surprised and pleased that their CU invested the time, money and resources to seek their opinions.

Daryl Jones specializes in mortgage and consumer lending performance and process improvement as a director with Cornerstone Advisors, Scottsdale, Ariz., a CUES Supplier member and strategic provider. He is also the chief blogger at

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