Can buying a home ever be a true end-to-end online service?

Written by Geri McGaan – Principal Client Advisor

Today we don’t give a second thought to buying online. From products like groceries, clothes, and books, to services like TV subscription, flights, and insurance. For most of us, it’s an everyday occurrence. But what about bigger, more significant purchases, where we are parting with large sums of money? Will there come a time when, for example, buying a house online is common place? Is it even realistic to expect someone to make an expensive purchase without talking to someone or at least having some human interaction? Is there even an appetite there from consumers to be able to do it?

Depending on the product or service, the complexity of consumer concerns differ, for example, when buying car insurance, our studies show that the top drivers for choosing a provider at final preference are price and (provider) familiarity (1). However, buying a home is one of the biggest purchases we will make during our life so, more complex questions need addressing such as:

  • How do I get a mortgage and how do I know if I qualify?
  • What type of mortgage is best for me?
  • Which product offers the best interest rate?
  • What do my monthly repayments look like?
  • How much deposit do I have to put down?
  • How long will the application take?

Making buying a home a truly end-to-end process brings with it a wide variety of challenges for providers. In 1981, 22% of home buyers read newspaper ads to find a home and eight percent used friends as an information source. In 2016, 44% looked for properties online first (2). So what about the mortgage application process itself?

A Global Reviews study undertaken in Q3 2016 identified that 26% of participants (N=250) want an end-to-end online mortgage application form service (figure 1), however completing one feels more appropriate at certain stages in their purchase journey and varies depending on their status e.g. a first-time buyer vs a second-time buyer (figure 2).

Figure 1: Please rate how important the following elements would be on a website when deciding on selecting a home loan

Figure 2: When would consumers interact with a home loan provider’s website?

When reviewing the mindset of consumers around online mortgage applications a further study (3) revealed:

  • Most consumers believe that completing an application form online will give conditional approval (with full approval pending confirmation of details of sale and financial details), not full approval. With most expecting to receive an email more so than any other form of communication
  • First home buyers are more likely to use the website to understand their borrowing power rather and seek conditional approval, pending financial and purchase details, however human interaction at some point remains important
  • Having an online application form is not enough of an incentive to encourage consumers to choose a provider, offering discounts on fees and charges makes applying online more appealing for first and second home buyers

So while the home loan providers website has a place, there are still many who want to speak to someone at some stage, regardless of age.

When testing the online application form itself, the highest drop-off for completing an online mortgage application, happens at product selection section, where participants are asked to choose their mortgage. Other issues reported were around duration, terminology, security, and support. With providers looking to cut costs and increase market-share at every stage, if they want to move more complex transaction online, like buying a house, key concerns need to be addressed, such as:

  • Reassuring prospects that the product they have picked is right for them – our study showed that the key moment within the application journey where participants drop-off was at the product selection stage, where participants are asked to choose their product
  • Setting expectations upfront:
    – what are the qualification criteria for applying online – only existing customers?
    – how long can they expect the application to take?
    – what information do they need to have to complete it?
    – how will they be informed of application approval and how long will this take?
  • Providing the appropriate level of help and support at the different stages of the process bearing in mind that first-time buyers may need more hand-holding
  • Being transparent and providing information such as the cool-off period
  • Making them feel their information is safe and secure

But having an online application form is not enough of an incentive for consumers to choose a home loan with that bank – monetary incentives, such as discounts and special rates are more likely to motivate consumers.

What’s likely to influence customers to use an online application form?

So, while some financial institutions are already enabling customers to buy their house online consumers current (and correct) perception (and their expectation) is that most application forms are conditional approval rather than full approval. With many challenges that still need to be overcome providers have some way to go before consumers embrace a fully online end-to-end service from mortgage research, to application, to approval. Totally ‘replacing’ human interaction is not currently realistic. New design patterns are emerging that look at supporting the decision-making process and providing that human-interaction in an online context, but more on that in my next blog…

(1) Global Reviews Fruition Motor Insurance IE October 2017 N=201
(2) Nar Real estate in a Digital Age 2017 Report
(3) Global Reviews Home Loans Application Form AUS March 2017 N=103

Download our free report and view our recent mortgages webinar for more insights into industry trends and how consumers are interacting with provider websites.

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NatWest visitors are the fastest and most satisfied when looking for mortgage rates

Home loans Fruition

Finding the right home loan is as confusing and overwhelming as picking the right roof tiles to match the bricks. It is, therefore, imperative that home loan providers make the online research process as straightforward and satisfying as possible in order to minimise confusion and ensure strong conversions.

In November 2017, Global Reviews tracked 350 consumers as they searched online for a home loan provider. Consumers were split across desktop (n=200) and mobile (n=150). After conducting their own searches, they were directed to one of eight provider websites to complete further research.

Once consumers had looked around the homepage, we asked them to find all the available mortgage rate options for first time buyers (new customers). In doing this, it was found that those who completed the task quicker typically had a higher satisfaction rate with the process of completing the task. As can be seen in the chart below, NatWest visitors are the fastest and most satisfied when looking for mortgage rates for first time buyers. Potential customers are getting hugely different experiences across different sites with a 1:28 difference between Lloyds Bank and NatWest.

Time vs Satisfaction home loans

NatWest had the fastest average task completion time with 2:14 minutes and a satisfaction rating of 81%. On the other end of the scale was Lloyds Bank with an average time of 3:24 minutes and a satisfaction rating of 73%.

Whilst a shorter task completion time generally means higher satisfaction, a longer task completion time isn’t necessarily driving dissatisfaction but rather an inability to find the right answer. This indicates underlying usability issues supported by 20% claiming starting where to look was not easy.

The following chart highlights some of the most common issues consumers faced when trying to locate the product range. From a navigation point of view, the harder it is to find where to start looking as well as the inability to find what they’re looking for is bringing down satisfaction levels amongst customers. There is a strong negative correlation of -0.93 between problems encountered and satisfaction.

The most common issues consumers faced when trying to locate the product range

By comparing key landing pages for home loans we can see that allowing visitors to easily find what they are looking for with minimal effort and scrolling is key. Successful sites focus on key calls to action within the hero images and top navigation. Having a clearly laid out site with multiple entry points allows for the different preferences consumers have. Some consumers will naturally gravitate to the top navigation, others will look to the hero image and some will look down the page to find where they want to go next.

NatWest directs traffic through a comprehensive menu catering to both new and existing NatWest customers as well as delivering multiple entry points depending on customer research preferences. The menu is split into product, customer type and application stage, as well as grouping in relevant tools such as calculators to help in the research process.

NatWest directs traffic through a comprehensive menu catering to both new and existing NatWest customersLike NatWest, Lloyds Bank also uses the main header menu to direct consumers. However, they also provide additional entry points throughout the homepage. Within the hero image there are quick links to popular pages. Sitting just below the hero image are more links to key product pages. Having three navigation areas caters for different types of browsers and therefore aids in creating a user-friendly site.

Lloyds bank has three navigation areas catering for different types of browsers By giving consumers clear options and starting points can mean a huge difference between keeping them on site or losing them to a competitor.

To learn more download our FREE industry report and view our latest webinar covering off more ways to understand and improve your conversion rates using our Fruition methodology.

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Home Loan Digital Tactics- What your competitors don’t want you to know.

Working on optimising your website and digital strategy to get more visitors can sometimes feel futile. But what if the reason your rankings are not improving is actually your myopic view. Have you ever thought or analysed what goes on in the minds of your prospective customers when they look for a Home Insurance provider?

Have you ever wondered what your customer journey when searching for a home loans provider actually entails? What is your competitor getting right and where are you falling short? It could really be a question of identifying information that your customers need and laying it out in a certain way on your website.

Let’s dive right in, shall we?

We recently conducted a our webinar on this topic, where we touched upon what works for leading Home Loan providers and why. Our products are pioneers in measuring benchmarking and optimising customer journeys. We show you the larger picture. We tell you where you sit in the eyes of your potential customer. We tell you how your customer chooses you and why a potential customer doesn’t, which competitor they choose, what leads them to their final choice and what influencers play a pivotal role along the way.

In 2017 we spoke to 1,200 home loan seekers and had them complete tasks on up to 24 brands internationally. We analysed the funnel from start to finish, prioritising performance at key stages such as- Recall, Initial Preference, Visited websites of brands, Shortlisted, Final Preference.

According to the research conducted and the funnel created, some of the results found indicated that:

  1. Service functionality was rated to be of higher importance for Home Insurance seekers in the Australian market as compared to the UK market.
  2. Websites being user friendly is another aspect that veers customers towards choosing a Home Insurance provider.
  3. For prospective customers, after brand relationship and beyond utilitarian product features like fees and rates, presenting options which are easy to understand and suitable to specific needs is key.
  4. For existing customers, service delivery and customer experience is the battleground.
  5. Home insurance providers that have easy to use input fields and easy to use terminology on their websites are ranked higher according to potential customers.
  6. Mobile version of the websites of home insurance providers showing key features in larger text and more details in a slide over which enables users to easily and quickly get back to the range list, is preferred by customers.

A few key points to keep in mind if you are a Home Loans provider, seeking to attract a larger market share:

1.Understanding where prospective and current customers go to meet their needs and being there with the most compelling option.

2.Customers want to know what you have to offer them but you need to tailor that to their needs. Interactive comparison, dynamic filtering and strong breadcrumb strategies are key.

3. Understanding touch points used (research, social media, aggregator, search engine etc.) and most important attributes is key.

4.Having a clear map of the home loan customer experience journey and their differing needs along that journey. Meet them on that journey with solutions that  solves problems.

5.Knowing why you are losing opportunities and ensure you are maximising your share of the customers wallet by pre-empting what they need.

6.When personalising online journeys, maintain strong anchor navigation which clear signposting.

To get a full synopsis of what we covered in the webinar, click here or reach out to Maddy-

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