(Editor’s note: “Closing Time” is a new, semi-regular “Blog View” series brought to readers of MortgageOrb by the folks at Velocify, which offers an automated marketing and sales platform geared for the mortgage industry. To read the first post in the series, click here.)
CLOSING TIME: The old phrase “To make money, you have to spend money” is so true for mortgage companies and professionals. Lenders need exposure to get customers. And if they don’t have the tools or resources to provide a satisfactory customer experience, they’ll have trouble getting repeat business or referrals. To get exposure, and to create great service, lenders need to invest in their own businesses. And they have to invest in the right areas.
Earlier this year, we surveyed more than 500 mortgage market professionals around the country and found the majority of them plan to increase their spending in marketing and technology to increase sales. One of the findings of our survey was that the more lenders spend, the better the results. For example, companies that spent more than 10% of their revenues on marketing were 50% more likely to experience significant growth.
The question for all lenders and mortgage professionals is how to get the most bang for one’s buck. The answers may differ, depending on a company’s specific goals, but some investments are perceived to yield more results than others.
According to our survey, lenders that spent the most on marketing and had significant growth were also 2.5 times more likely to be above-average adopters of technology. We also found that the more that lenders spent on marketing to generate demand, the more heavily they invested in technology to increase return on investment on their marketing dollar. Compared with lenders that planned to maintain or decrease their technology investment, the tech-savvy lenders were likely to see a greater percentage of new business from purchase loans.
The most interesting thing we found is that retail lenders are beginning to adopt some of the strategies that have made some consumer-direct lenders so successful in the refi loan business in recent years. The majority of retail lenders we surveyed said they are focusing their investments on lead management, referral partner management, analytics and marketing automation software. Most of these tools were designed to help lenders follow up with borrowers faster and automate routine tasks so they can focus more time on selling.
It seems retail lenders are starting to grasp that today’s consumers are digitally driven and much more likely to begin their home buying process online. These borrowers don’t like waiting, and they expect greater transparency in the mortgage process. For years, consumer-direct lenders have been targeting this growing group of consumers by investing in technology to capture and convert online leads. Historically, this type of technology has been extraordinarily expensive, but over the past decade, the costs have dropped dramatically. Today, they are within reach for virtually any mortgage professional who wants them.
Our survey, which also covered consumer-direct lenders, also found that companies in this segment are now poised to leverage the strategies developed during the refi boom to sell purchase loans. But as I see it, there’s nothing to stop retail lenders from using the very same tactics to close their sales gaps and increase their own conversion rates regardless of which market they serve – purchase, refi or both.
What does all of this mean for you? Clearly, some lenders are investing money to attract today’s borrower, and others are investing to attract tomorrow’s. But no matter where you find new business, whether through referrals, advertising or the Internet, you’ll want to make the process of engaging customers as efficient as possible.
Inevitably, it comes down to the tools you use to communicate, such as email, the telephone and the Internet. Because we know that speed is key to sales success, the faster you get back to borrowers with the answers they need, the better. And the more you help borrowers, the more likely you’ll have made your investment a smart one.
Chris Backe is the director of financial services at Velocify and a sales automation expert with more than 20 years of experience offering technology solutions to multiple industries. He has spent the last 10 years in the financial services industry, holding various positions at industry-leading technology companies, including Ellie Mae and Salesforce. He can be reached at email@example.com.