Lender Closes Branches to Focus on Phone, Web

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Increased telephone training and more sophisticated use of technology are among the changes made at Rock Financial as it becomes one of the first lenders to transition from a brick-and-mortar focus to a Web and telephone-based operation.


While there are a growing number of online and telephone-based financial institutions, few traditional banks or lenders have closed the majority of their branches, noted Brook Newcomb, senior analyst with Forester Research Inc., Cambridge.


"We see more financial companies pruning their branches as opposed to doing major surgery," Newcomb said.


Mortgage lender Rock Financial, Bingham Farms, MI, launched an online mortgage site at www.Rockloans.com in January. It announced in early July that it is closing 12 of its remaining 15 branches and will move into a new 110,000-square-foot corporate headquarters in November housing a 50,000-square-foot, 400-seat Web/call center that will be the center of loan production for the company.


"With the proliferation of the Web and the call center environment, we felt we could close loans and assume less cost that we could pass down in savings," said Daniel Gilbert, chairman and CEO/president of the company.


But Gilbert acknowledged that the biggest challenge was the human element.


While employees who worked in Rock Financial's branch locations often had some telephone sales experience as part of their jobs, the company has been sending employees to an inhouse phone lab to train for positions in the company's Web/call center. Techniques used in the phone lab to develop phone manner include recording agents in their phone conversations and then playing their calls back. Employees also receive technical training on the company's systems, which include an integrated database for handling Web and phone inquiries.


On the inbound side, the company has been routing calls to agents with different skills sets using a variety of inbound 800 numbers.


"We have several toll-free numbers that customers find when they hear or see ads. These numbers are programmed through our long-distance vendor to five-digit extensions," said Marlene Emerson, Rock Financial's telecommunications manager. "Each five-digit extension is pointed to a group of people in our call center."


As an example, agents with Internet experience might be assigned to calls coming in from a number advertised on the company's Web site. A Web group handles Web interactions, but the call center handles phone call requests that originate from the Web site.


While the company has long been equipped with such routing capabilities, they have been used more extensively as the company has been increasing it's emphasis on its Web/call center, Emerson said.


Similarly, the company has increased its reliance on the reporting functions, such as data provided by its long-distance carrier AT&T about how many calls come in and how many are incomplete or end in hang ups. They also gather data through their Lucent Definity G3R switch that shows details about call volume and about how long customers waited to speak to a representative.


In early July, to cope with the rise in calls the company expected with the launch of a yearlong, $20-million advertising campaign, the company began switching a percentage of its calls to an outsourced IVR system.


"For example, we might tell our carrier that we are accepting 75 percent of our calls during a certain period," said Emerson. "The remaining 25 percent would be sent to our outsourced IVR that captures information, prequalifies leads and sends them back to the call center for a call back."


While the company also does outbound telemarketing, it takes agents out of the inbound rotation when they are making outbound calls rather than blend incoming and outbound calls.


"We think there is a different mindset to being and inbound and outbound representative and we want to keep them separate," Gilbert said.


The company had been serving only customers in the Midwest with its brick-and-mortar branches. It is now licensed in 49 states and, because there are other factors required for compliance with local rules in addition to licensing, can serve 85 percent of the population.


As it rolls out marketing in other parts of the country, it may begin to route calls to agents skilled in the customs and regulations of lending in certain parts of the country.


Similarly, while it does not use bilingual agents now, it will monitor the amount of customer interest in such agents as it expands.


The company currently has 140 to 150 agents in its call center and will continue to add agents, many from closing branches, as the demand increases.


Industry analysts warn that the Internet lenders market is highly competitive.


"Those that are on mortgage marketplace sites have to have very competitive rates, and those that aren't on those sites have the challenge of attracting attention," said Newcomb.


Rock Financial sees itself as well positioned to attract customers' attention.


"There are others in the market - Citywide, eLoan, Mircrosoft and Quicken Mortgage - but what sets us apart is that we are a direct lender and a lot of the others are middlemen," said Gilbert. "As a direct lender we can directly process loan requests and, we think, offer better service at cheaper rates and more efficiently."

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