I remember growing up and my Dad always talking about his secret to fishing success. He would say, “Billy, the biggest and the best fishing is in these little private ponds.” He was on to something…
Then, in 1999 Seth Godin wrote his seminal book “Permission Marketing” that touched off so many other innovative marketing mind altering quick-reads. But, the key concept that may apply more today than ever before gets lost in the subtitle: “Turning Strangers into Friends, and Friends into Customers.” This is really the difference isn’t it?
This concept, my friends, is the secret to BIG success.
How Mortgage Brokers Get it Wrong
Often I see sales professionals hop from one hot commodity to the next. You sell mortgages when they are flying off the shelf, then cars, or insurance. You tell yourself, “it doesn’t matter I can sell anything.” Yet, what you really know inside is: I can’t sell anything, I don’t know how to create value, instead I am trying to follow the easy money. Unfortunately, the money probably isn’t really that easy, the pay certainly is not significant, and you find yourself on a treadmill that will definitely drive you mad.
Stop the madness, step off the treadmill, and change your perspective. Stop thinking about making $100,000 and start thinking about stocking a private fishing hole, a pond filled with customers.
How to Start Stocking the Pond
Now that you know you need a stocked pond, how do you start?
If you have been in the business for a while you probably have some fish to seed the pond. Dust off those old files in the corner and get them into your lead managements system (software makes it easier and more scalable, but even index cards can get you started).
If you are new to the business, or even trying to jump start things purchasing mortgage leads may be a good start. Even pond owners buy fingerlings to get their stock their ponds started. However, don’t attempt this until you have prepared your business to work pay per lead business.
Lead Nurturing
Once you have your “feeder fish” past clients and/or purchased mortgage leads you need to start your lead nurturing programs. If you are buying leads, certainly begin by immediately contacting and addressing immediate needs. If you a seeding your customer pond with past clients then make sure you reconnect in a valuable way. Send them a brief update on their mortgage or general state of the market.
Once you have started that initial connection begin to understand how they want to be feed. A key element to this is lead tracking, seeing how your customers react to different approaches and methods. Do they react better to an email newsletter, a blog, regular mortgage check-ups, Twitter? Then design the programs, may be multiple programs, to keep those loyal clients in your private pond.
Keep Stocking the Pond
Once you begin to grow that loyal customer base don’t forget to continue stocking the pond. You will always have natural attrition to your network of customer. That is why it is best to have constructed a system, a mortgage lead management process that can continually fuel your current sales, referrals, and new adds to your stock pond.
Examples of Working Pond Stocking
Lead Generation – LendingTree
Mortgage Industry – Quizzle
Network Marketing (MLM) – Quixtar
Individual – Jason Nation
How do you stock your favorite customer fishing hole?
Big Success is about Stocking Your Private Fishing Hole
Is Pay Per Lead for Your Mortgage Business?
If you are a mortgage broker you have certainly received the frequent call from pay per lead mortgage lead providers. They tout high quality, superior ROI, and dramatic growth; which all may be true, but only if fits your business. This type of marketing requires a specific understanding of the marketing used to generate the lead and the unique sales processes that can ultimately convert them consistently. Let’s take a closer look at the factors that may make pay per lead a good or bad fit for you.
Understanding Pay Per Lead Marketing
Pay Per Lead is the ultimate result of a myriad of marketing techniques that produce a customer inquiry or lead, which can be sold to a sales team.
First, let’s look at the marketing that produces a lead. Typically, two primary techniques are used to produce a mortgage lead: email marketing and paid search. Both techniques are highly specialized disciplines within marketing that notoriously require scale (large email lists or significant advertising budget) and efficiency (the simplest adjustments are the difference between boom and bust). In each case, the general principle is to engage the customer with information or advertising creative (marketing speak for a combination of image(s) and value/benefit message(s)) and convince them in a matter of seconds to provide an introductory amount of personal contact data and information about their potential mortgage need.
Second, let’s look at the lead that is produced by the marketing. Now that the customer has provided this information and a lead is produced, what has the lead provider produced? Most simply they have approximately 20 introductory data elements and an indication from the customer they would like to talk to someone about mortgages. However, considering the brevity of these marketing messages and the customer’s low time, risk, and commitment level the percentage of inquires with a high intent to buy is most likely low.
Finally, let’s look at what happens to the lead once it is produced. Although, the percentage of buyers that have a high and immediate intent to buy is low the marketing expense to target and produce any reasonable quantity of potential borrowers and homeowners with this level of intent is very expensive. Ranging anywhere from $100-$300 per lead produced. Obviously, since the market will not bare that sort of price per lead the monetization of that marketing spend must be distributed. This, of course, is the most basic reason that pay per leads are sold to multiple mortgage companies.
With a better understanding of pay per lead marketing programs and the leads that they produce lets see if this type of marketing program fits you mortgage business.
Multi-State Licensing
Just like the marketing programs and lead providers that produce the leads you are considering buying, your mortgage business needs some level of scale to be successful with Internet leads. This scale begins with the breadth of geography in which you can provide mortgage loans. If you are a single state, or even a single town local lender buying Internet leads is not for you. This is not to say a single individual or small 2-10 loan officer branch is not a fit for lead buying. In fact, in most cases this is a perfect fit. However, make sure that either through your own licensing effort or with the help of a Net Branch affiliation you can write loans in at least 5-10 States. Fortunately, this is a reasonably low barrier to overcome with approximately 30 States with manageable licensing requirements.
Broad Range of Loan Programs
Prospective homeowners and refinancing borrowers will naturally have a range of financial situations and needs. Consequently, to service the customer inquiries in good faith you need to support several loan options. Attempting to fit every customer into a 30 year fixed mortgage is a recipe for frustration for you and the customer. Really this requirement is not unique to pay per lead programs, but it is important to consider. These inquiries will most likely be sophisticated and knowledgeable borrower and often have more complex past financing or current needs. Therefore, the richer your portfolio of loan programs the higher rate of success you are likely to have.
The good news is that again this is a fairly low barrier to buying leads. Most correspondent and wholesale programs offer a full spectrum of loan programs and capable processing assistance to support your mortgage operation.
Disciplined Sales Process
The level of discipline in your sales process is likely the key determinate of whether pay per lead is for your mortgage business. All of the other factors for success are easily achievable and require little adjustment from the way you do business today. In contrast, your sales process most likely will need to change significantly.
Internet leads come in sporadically and unpredictably throughout the day and the evening. The customer expects immediate and frequent responsiveness. An Internet customer may not be seeking to create a “relationship.” Each of these attributes of an Internet lead will effect how you need to alter your sales process to be effective.
You need a system. Most likely this means lead management software or service designed for mortgage leads, but can be constructed less efficiently from email and spreadsheet tracking. This sales system needs to immediately alert you to new leads, compel you to quickly follow-up, allow you to track contact and customer needs, and enable you to efficiently move the customer to a loan closing with minimal personal interaction.
Pay Per Lead Can Be Highly Successful, But Only If It Fits
Pay per lead marketing programs can be hugely successful in your mortgage business, but only if you are prepared and it fits your business design. If you are veteran loan officer flush with referrals and relationships that have locked you in as the mortgage expert in your community, then Internet leads are probably not a fit. However, if you are an aggressive loan officer, with a young business, and trying to build that solid foundation of referrals for the future buying Internet lead is probably the best path to success.
