NetBanker: IndyMac Archives

There is one marketing technique that is much easier to do online than through other media -- competitive comparisons.

In the old print world, you might be able to update your brochure or ad once or twice per year. Online you can do it in near-real-time.

We've long been a fan of IndyMac's mortgage comparison, first writing about it in Online Banking Report #72 (June 2001). The mortgage lender shows the total mortgage cost at various major competitors, even daring to include examples where it's not the lowest overall price.

These competitive price comparisons are great, and if you consistently have lower prices, then you should use this approach.

But what about companies that compete on service more than price? After all, most consumers aren't going to choose a bank, simply to save a buck a month on fees.

Idea
If your service is markedly better than your competition, create a comparison chart showing your service standards and capabilities stacked up against the competition.

Even better, hire an independent researcher to document search times, wait times, response times, resolution times, and so on, and post them to your website on a frequent basis. Not only will this impress prospects, its excellent reinforcement to your current customers and employees that you are measurably better than the rest.

-- JB

The Company

IndyMac Bancorp
1,746 employees
$5.7 billion (assets, 12/31/00)
155 North Lake Avenue
Pasadena, CA 91101
(626) 535-5901
www.indymac.com

IndyMac Bancorp is one of the top mortgage success stories of the past decade. And flying in the face of conventional wisdom, it’s quite profitable and very Net-focused, with more than half of its Q1 retail loan volume (B2C and B2R,) and 92% of its B2B volume handled online (see table 1, right).

The company has a unique history. In 1985 it was called Countrywide Mortgage Industries, a real estate investment trust (REIT) formed by Countrywide Credit Industries. Eventually the company changed its name to CWM Mortgage, and in 1997 paid $80 million in stock to end a management-fee agreement with Countrywide. In late 1999, the company ended its structure as a REIT and took the new name IndyMac. Finally, in July 2000, the company purchased SGV Bancorp, the parent of First Federal Savings and Loan of San Gabriel Valley, CA, and became a bank holding company.

table 1

IndyMac Loan Volumes

	Total	Internet	% Net
Q1 2001	$3.64 b	$2.93 b	80%
- B2B	$2.89 b	$2.65 b	92%
- B2C	$470 m	$237 m	50%
- B2R (Realtors)	$37 m	$37 m	100%
- Other	$245 m	--	n/a
Full-year 2000	$10.1 b	$7.00 b	70%
- B2B	$8.37 b	$6.51 b	78%
- B2C	$844 m	$455 m*	54%
- B2R (Realtors)	$36 m	$36 m	100%
- Other	$850 m	--	n/a
Full-year 1999	$6.98 b	$2.39 b	34%
- B2B	$5.66 b	$2.27 b	40%
- B2C	$586 m	$120 m	20%
- B2R (Realtors)	$0	$0	n/a
- Other	$738	--	n/a
Year-end Snapshot (12/31/01)
Assets	$5.7 billion (12/31/00)
Employees	1,746 (12/31/00)
2000 revenue	$337 million
2000 earnings	$92 million

Source: Company reports, 5/01

*88% of permanent home loans were generated via the Web in 2000

With 2000 earnings of more than $92 million on origination volume of just over $10 billion, IndyMac was the 19th largest U.S. mortgage company. Given the company’s reliance on the Internet channel, the company could be considered one of the more profitable “Internet companies” outside the IT industry.

Top Rated

Gomez currently ranks IndyMac number 1 overall and number 1 in customer confidence (table 2, right). We understand why. From top to bottom, IndyMac’s Web delivery makes the user feel confident in the online mortgage process and with IndyMac’s ability to deliver the goods. We especially liked the Quick Pricer, its service guarantees, the online demo, and competitive rate comparison (see table 3, below).

IndyMac’s service culture comes through in many ways, from the “remarkable service pledge,” to its direct line to customer service management to report any “less than remarkable service.” This is how to get understandably skeptical customers to open up their wallets online. Kudos to IndyMac.

table 2

IndyMac Gomez Scores

Spring 2001

Category	Score	Rank
Ease Of Use	8.81	1
Customer Confidence	4.95	4
On-Site Resources	5.88	6
Relationship Services	8.35	1
Composite Scores
Overall	6.59	1
Rate Hunter	7.02	1
One-Stop Home Buyer	6.51	2
Novice Home Buyer	5.95	2

Source: Gomez Advisors, 5/01

table 3

OBR Best of the Web 2001 Features

Feature	Description
Multi-channel emphasis	You simply must show customers you are ready to answer any and all calls; IndyMac offers a $200 incentive to apply online but also encourages phone applications.
Application demo	Walks users through an entire application so they can see how it works, what info they need to gather, etc. IndyMac does a good job, showing the actual application with a few well-written words highlighted in yellow at the top of each page.
Rate comparison	Not only does IndyMac provide up-to-the-minute rate comparisons with its toughest competitors, it provides hyperlinks directly to the competition so users can verify the rates themselves.
Realtor Channel	The LoanWorks Realtor channel is well conceived, generating $37 million in loans in Q1 2001.
Email and phone link to customer service manager for help with any problem	If you’ve got it flaunt it. IndyMac provides a special email address to send a note if the service is “less than remarkable;” now that’s remarkable. Here is how the lender describes its customer service pledge: “At IndyMac Bank Home Lending, we believe that you deserve great customer service 100% of the time. We’ve established a direct phone number and e-mail link to our customer service manager. Please call (877) 309-9037 toll free from 9:00am to 5:00pm (PST) or email helpline@indymacbank.com if you feel our service is anything less than remarkable.”

Source: Online Banking Report, 5/01

IndyMac clearly indicates that users may choose between a telephone and online application. The company provides a reasonable $200 monetary incentive to apply online.

Application Demo (page 1): IndyMac starts with the easy stuff, name/address, and a few yes/no questions to help define what needs to be presented.

Application Demo (page 2): “Tell us a little about yourself.”

Application Demo (page 3): “Briefly tell us about your income. If you would prefer, we have loan programs that would not require you to supply this information.”

Application Demo (page 4): “We just need enough assets to qualify you for the loan.”

Application Demo (page 5): “We all have bills, tell us a little about yours.”

Application Demo (page 6): “These are easy, just yes or no.”

Application Demo (page 7): Users select loan type at the end of process, not the beginning. You don’t want to put users into “analysis paralysis” with 17,000 loan choices, at least not until you have them committed to the loan application.

Application Demo (page 8): As the customer completes the application, IndyMac works behind the scenes on the credit evaluation so that by the time the user gets to “custom loan choices” they are already approved. At this point, users have four choices each clearly stated with a button at the bottom of the screen:

submit with rate lock
submit without rate lock
contact me
your pre-approval letter

Application Demo (page 8b): A description of each action is shown below as the mouse moves over it.

Application Demo (page 9): “A few more questions so we can figure out the minimum amount of paperwork we need from you.”

Application Demo (page 10): Borrowers submit the application with a credit card charge for a refundable $275 deposit, credited at closing.

Application Demo (page 11): “This is your rate lock agreement.”

Application Demo (page 12): “Congratulations, you’re approved. Here is your approval letter.”

Application Demo (page 13): “It’s as easy as that. The whole process takes just a few minutes.”

IndyMac is brave enough not only to show competitive rates, but also provide hyperlinks to the competition. If you are wondering why anyone would make it easy to get to the competition, the copy (left) says it all:

Sure, we won’t have the lowest rate every day, but when you look at all we have to offer, why would you take your chances for a few dollars? IndyMac Bank Home Lending is a premier mortgage lender with solid backing, an excellent customer service record, and industry-leading online features.

The LoanWorks division of IndyMac was launched in April 2000 as a channel for Realtors to help originate and track mortgages for their clients. During its first 12 months in operation (April 2000 through March 2001), the channel brought in $73 million in loan volume, including $37 million in the latest quarter (Q1 2001).