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   ARTICLE   |   From Scotsman Guide Residential Edition   |   February 2012

Keeping Pace with Internet-Savvy Consumers

Leverage new sales tools and online marketing to get ahead

In an age of free information and countless online financial tools, today’s Internet-savvy homebuyers are less willing to provide their contact information in exchange for a mortgage quote. If this trend continues, the days of leads as we know them could be numbered, and commoditized consumer records could become a thing of the past.

Consumers now can take advantage of online sites that offer anonymous comparative shopping — services that allow them to compare mortgage terms without providing identifying information until they contact the mortgage professional of their choice. Consumers even may shy away from commoditized lead-engine websites and turn instead to consumer-powered sites for their research.

Considering this newfound level of consumer agency, how can mortgage brokers and originators ensure that their business keeps pace? Automated-quote applications and targeted online marketing may be the answer.

Auto-quoting

Workflow automation has emerged as a requirement to compete with consumer-powered sites. Automated-quoting applications enable mortgage originators to respond to Internet queries with intuitive and detailed quotes of their own. Moreover, mortgage professionals that use consumer profiling to intuitively filter and auto-quote selected consumers can dramatically increase their return on investment (ROI). These actions can help you avoid providing the consumer with unrealistic or otherwise financially unsound quotes.

Effective mortgage automation matches the consumers you desire to your best terms. In these interactive sites, the consumer often contacts an originator after 15 minutes of comparative shopping. Consumers who contact originators directly often convert at a higher closing ratio than those who don’t. This can result in dramatic increases in online marketing ROI. In addition, this direct contact reduces the cost of telemarketing dramatically.

Consumer activity may be trending away from traditional lead sites, but commoditized lead domains still play a major role in the online mortgage market. Today’s originators should take advantage of both traditional lead generation and auto-quoting methods of lead generation to affect their scale and ROI.

These two channels of origination combine to create a predictable flow of commoditized leads and an additional number of higher-converting consumer opt-in contacts created by interactive consumer sites. To strike the right balance between these two types of Internet lead generation, businesses must assess the volume and conversion rates that will work for the number of originators involved and the budget available.

Budgeting and assessment

Any savvy originator will want to use a marketing plan that’s formalized, measurable and budgeted. Planning for Internet-based origination requires that businesses measure everything from their managerial lead accounting to the execution of deliverables by their sales force. Some additional performance indicators might include:

  • The cost of lead acquisition;
  • The sales force’s contact efforts;
  • Conversion rates; and
  • Your business’ net ROI.

With a minimal amount of time, your business should be able to quantify its ROI with respect to lead-acquisition costs. Your results will vary, however, based on the balance and type of lead generation you employ. To assess your company’s ROI as well as its lead performance, consider measuring leads against closed-loans, in addition to measuring closed-loan revenue versus marketing expense by source.

ROI rates depend on the type of online origination and consumer records you’re acquiring. For instance, exclusive or semi-exclusive online consumers are costly to acquire and limited in number, yet they may convert exponentially higher than commoditized real-time records. Similarly, commoditized real-time records may convert at a higher rate compared to commoditized “aged” records, yet real-time records are significantly more expensive. The lowest-cost lead often will require the highest cost of labor and produce the lowest overall closed percentage.

If you don’t want to burn out your sales force, your marketing plan also must account for the amount of effort required to convert a lead into a sale. Different types of leads require a varying number of contacts to convert an online consumer inquiry into an application. This number is typically in direct relation to the cost and type of online consumer provided by your marketing budget. The effort required to secure a given sale is a key indicator of a lead’s quality and has a tremendous impact on the marketing campaign’s overall ROI.

Measuring the effectiveness of your company’s sales force also is of vital importance when it comes to analyzing your business’ investment in its leads. Some typical performance indicators include your sales force’s response time, its application percentage and closed-loan percentage by officer. A sales manager can analyze these numbers in a variety of ways, and the result likely will indicate the business’ most effective salespeople and most effective use of marketing capital.

• • •

The Internet continues to change and shape the way that business is done today, and the mortgage industry must respond to the growing challenge of acquiring effective online leads. Luckily, access to consumers who need mortgage services is readily available in a number of price points and methods, but businesses must understand how to best attain and use these leads. Online marketing is relatively simple and can be a successful enterprise if managed properly. Given careful planning, online lead generation can sustain the business of mortgage brokers and originators, regardless of the current rate environment.


 


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