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Customer defections threatens mortgage industry

The mortgage industry needs to work harder to retain customer loyalty if the industry is to survive, says a survey from Group 1 Software.

The survey into customer loyalty found that customer defection rates in key consumer industries have increased from 16.9% in 2003 to 19.1% in 2005.

It also reports that consumers are becoming increasingly mobile and that unless companies improve retention strategies, loyalty will continue to waver.

Although at 13.6% the mortgage industry has a lower churn rate than both banking (17.5%) and general insurance (17.5%), the report warns that the industry has more “acute problems”.

Remortgaging, the industrys own version of switching, makes up half all new business sold each year, which means the back-book of existing profitable customers who have been traditionally subsidised low entry rates for first-time buyers has now been almost irrevocably undermined, threatening the very business model of the industry.

Instead of using discounts and price-led strategies to retain customers, companies need to focus on brand values and other forms of delivering value and privilege back to the customer, says Group 1 Software.

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Guide: 10 required letters — what to send, to whom and when?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. The topics in this guide include: the letters you need to send out; what to send and when; the importance of employee engagement; and what to consider as additional communication.

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