Author: Volly

What is retention?

Retention is the ability of a company to attract repeating sales from their existing customers. Prioritizing customer retention directs the business focus toward maintaining a long-term relationship with a customer and going beyond the transactional value of each sale. 

Why care about retention?

In the mortgage industry specifically, customers come to a long-standing commitment when deciding to work with a mortgage lender. It is not only natural but also wise to invest some effort into building that lifetime relationship. Moreover, when the time comes for the same customers to consider refinancing or a new mortgage for their next home, they would be more likely to work with the same lender (given that they have had a satisfying experience in the past). It is crucial to understand that no lender or big company owns a customer relationship. Fannie Mae Mortgage Lender sentiment survey in the second quarter of 2021 concluded that the profit margin outlook of lenders decreased again this quarter, making it the third consecutive quarterly decline and the lowest dip since the beginning of 2014. Also, leaders who experienced lower profit margins quoted “competition from other lenders” as the top reason for the diminishing outcome [1]. In a mature industry where competition is fierce, and the rivals are always ready and eager to steal your market share, customer loyalty and trust are earned and not given. 

Although the benefits of customer retention are countless, below are some main advantages to consider:


Loyal customers become enthusiastic brand advocates


  • Secure your market share and get ahead of your competition
  • Build reputation and improve brand image in the industry
  • Increased customer retention leads to profit and ROI growth
  • Doing business with an existing customer is less costly than acquiring a new customer
  • It is easier to work with existing customers 
  • Create a win-win situation for you and your customers by providing your customer outstanding customer service and attention

A quick note on Retention versus Acquisition

Whenever the topic of customer relationships arises, the emphasis is often on acquiring new customers. However, retention is equally if not more important. A study conducted by the American Marketing Association weighing acquisition expenditures against retention expenditures concluded that: “when firms trade-off between expenditures for acquisition and those for retention, a suboptimal allocation of retention expenditures will have a greater impact on long-term customer profitability than will suboptimal acquisition expenditures”[2]. Retaining an existing customer is often less costly than acquiring a new customer. These two statistics are worth considering:


  • The chance of selling to an existing customer is 60%–70%, with that percentage dramatically falling with a new prospect down to 5–20% [3].
  • The cost of acquiring a new client could potentially be up to seven more times costly compared to retaining an existing one [4].


The point is not to argue that a company should pour all its resources and money into retaining customers. While acquisition focuses on expanding the customer base, retention, which happens after the acquisition phase, is about growing the customer lifetime value and decreasing customer defection. Even though acquisition and retention present two different approaches toward customer engagement, they are both imperative to improving the overall growth and profit. Ideally, to maximize the effectiveness of customer engagement, both need to be done simultaneously. At Volly, we offer a complete stack of technology to help you on every step of the customer journey (check out our solutions here).

How is retention in the industry?

It is safe to say that most of the industry is aware of the importance of client retention. Another Fannie Mae Mortgage Lender Sentiment survey conducted in the last quarter of 2019 pointed out that 87% of lenders were proactively developing customer loyalty throughout the customer relationship cycle, and the majority believed that providing excellent customer service was the best approach to retaining customers. However, only 40% of lenders employed predictive analytics to help with portfolio retention, and larger institutions are more likely to use predictive analytics than smaller lenders [5]. To survive and thrive in the current market, guesswork and being passive is not enough to achieve good portfolio retention.  

Retaining customers the right way

At Volly, we often discuss and emphasize the value of creating customer-for-life. We understand the immeasurable benefit of customer retention, and we want to help your business succeed. Therefore, we crafted a solution to simplify and streamline effective customer retention. 


  • Multi-year retention programs transform that one-time borrower into a customer for life
  • Fully personalized messaging keeps you engaged with customers, boosting referrals, and driving renewals
  • Strategic campaigns designed to track and capture referral candidates
  • A robust library of content created with a personal touch – everything from birthday postcards and loan anniversary touchpoints to holiday greetings and referral messaging
  • Personalized closing day gifts for the perfect thank you
  • Program options that help efficiently identify your customers that have the propensity to engage in a purchase transaction
  • Ability to provide powerful Realtor referral capabilities to help drive your Purchase business – regardless of the portfolio (banking, mortgage, consumer, etc.) 

More Resources

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