Page 44 - Future Demands Jan 2021

Subscription is, possibly, the final stop on the maturity of a market. In the mortgage world, of course, we’re already using the subscription model. We just don’t call it that.
Over 60% of people opt for mortgages that are over 25 years in length. Yet after the introductory rate, only 14% remain on reversion. Some pay off their mortgage, of course, but two-thirds remortgage internally or externally. Internal remortgages outperform external remortgages 2.5 to 1. Over the course of their introductory rate,
Lenders and brokers could, in my view, get a lot savvier about how they pre-market to mortgage customers whose initial period is coming to an end. That number of people who are willing to flip could well come from the current 47% who remain loyal, as well as from the 14% on reversion.
It’s also interesting to see that some building societies (including, for example, Skipton) encourage people to leave a minimum outstanding on their mortgages with the inducement of deed storage and voting rights for anyone who leaves a minimum of
FUTURE DEMANDS
“IN THE MORTGAGE WORLD, OF COURSE, WE’RE ALREADY USING THE SUBSCRIPTION MODEL. WE JUST DON’T CALL IT THAT”
homeowners’ brand loyalty increases and they effectively fall into a subscription model. But even external remortgages are still subscribers – serially monogamous to one mortgage product at a time. I think that despite our being an industry that has enshrined the use of the subscription model, there’s more that we can do to learn from those who are much newer to it.
Spotify uses consumer subscription data to offer new services – your most listened to music is a personalised playlist now issued to all subscribers at the end of each year.
£150 unpaid. Societies know that it’s to their benefit to have their customers remain loyal to the brand: it costs five times more to attract a new mortgage client than retain an existing one.
In addition to all the dashboards and graphs that we’ve seen from lenders over recent years, I firmly believe that we will see some new strategies emerge in 2021 that take the customer acquisition/retention model to the next level. The first step is to analyse the data that underpins your acquisition and retention strategy: where do you currently lose out and
why (and how) and at what stage? How well are you tracking your data across the customer journey and to what extent can you predict when they will next want your help?
Here’s something that I subscribe to: 2021 will be the year where data-led mortgage marketing becomes the norm, not the exception. Game on!
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