Buying Online Mortgage Leads? 3 Reasons Why It Didn’t Work For You
I talk with Mortgage Loan Officers all over the country- most of them are like Karen. She’s talented, motivated, and has a deep desire to grow her book of business. But unfortunately for Karen – and thousands of other Loan Officers like her – this positivity is often overshadowed by frustration.
She knows that business is shifting from offline to online, and in order to reach new customers, and grow her business, she will need an online strategy. She’s frustrated because the first step she tried in this process was to buy mortgage leads online…and it didn’t work.
Just like her colleagues, she spent a lot of money on online leads from Zillow, Lending Tree, and other mortgage lead platforms. But for her, she didn’t see any fundings happen from those leads–thus feeling burned, and resorting once again to her referral network of real estate agents.
If you are anything like Karen, you’ve probably bought leads at some point in your career…and you have probably also sworn them off as a scam, or come to the conclusion that they just plain don’t work.
The most important question to ask yourself is “Why did it not work?”
Problem # 1: You’re Buying Crummy Online Leads To Begin With
In the last two minutes I was able to count at least 14 different online mortgage lead platforms that Loan Officers can use to buy online leads, including Zillow, Lending Tree, and other juggernauts. Usually the prices range from $25 – $100 a lead. This explosion of online lead generation is clearly due to the fact that everyone is now searching for solutions to their problems online.
Zillow Long Form Mortgage Leads:
Zillow has over 6.4 million mortgage requests in 2018. The approximate cost of a Zillow mortgage lead $90 for an exclusive lead, although this number may vary. These leads also will likely be sold in a bundle. It makes sense to monetize the millions of requests, and sell them to mortgage loan officers. However, be aware that if the leads are non-exclusive, you’ll be competing with everyone else.
Lending Tree Mortgage Leads:
Lending Tree mortgage leads have significant upstart costs of around $10,000 setup fee + $8 a lead and about $400 for a closed loan. Lending tree sells these leads to multiple mortgage loan brokers and thus, are difficult to contact and close. Tread with caution.
Here’s the bad part: These leads are most likely non-exclusive, there is no transparency, and many are not delivered in real-time. These factors obviously translate to crummy leads.
Non-Exclusive: If you’ve bought leads before, you probably have called a hot home buyer lead, just to figure out that 9 other LO’s have already reached out to them! How is this any good for you?
The value of a lead is in “capturing” that prospect, and being the first person to build a relationship and provide them a mortgage solution. Although Zillow does offer exclusive leads (albeit for $90 a lead), most of these mortgage lead platforms will tell you upfront that these leads will be sent to 3-5 different brokers….all of which will call the prospect immediately. This sounds like a recipe for disaster!
No Transparency: Have you ever asked yourself these questions before buying mortgage leads from one of these massive companies like Lending Tree:
Where do they get these leads from?
How do I know they aren’t using shady sales tactics to get the forms submitted?
Are they recycling these leads to multiple LOs to maximize the money they make from each one?
The fact is this- if you don’t own the digital assets (websites, ads, etc.) that are generating these leads, and you are on a platform with thousands of other Loan Officers, there is no way to be sure that leads aren’t being recycled, or that they aren’t using shady tactics to generate those leads.
Not Delivered Real-Time: Without owning the lead generation process, it’s impossible for you to know if these leads filled out a form in the last 60 seconds, or in the last 7 days. According to Hubspot, if you follow up with internet leads within 5 minutes, you are 9X more likely to convert them! This adds insult to injury if you are getting recycled leads, and it is highly unlikely you will convert them.
If you follow up with web leads within 5 minutes, you’re 9X more likely to convert them -Hubspot
Zillow recommends following up with mortgage leads within 30 seconds in order to have the highest chance of converting them. Why is that? Well, if Bob is searching for a mortgage online, and fills out a form, and doesn’t get instant feedback that you’re there to solve his problem, he is going to keep searching for solutions. In today’s internet age, there is too much noise, and too many options…immediate follow up is crucial if you want to see ROI!
Should I Buy Mortgage Leads?
Let me say this plainly: No. It doesn’t end well. Let me ask you this:
Do you think that a mortgage borrower is going to just one website? Nope. They are submitting inquiries on Zillow, Lending Tree, RatePlug, and local brokers found on Google, most likely within minutes.
Each of those lead providers will be selling to 3-5 loan officers, so its almost guaranteed you’ll be competing with multiple fast dialing, hard-selling loan brokers. This is NOT the way to position yourself in the market to win. When you call, you are merely just Loan Officer 3 of 10. There is no trust, no brand recognition, no expert positioning. This is why 90% get burned buying leads and then go onto something else.
A better way is to actually start generating your own leads with a trust based marketing blueprint. We call this Copilot Branding, and it positions you as the trusted authority. If you want to know more about this strategy, please reach out to us.
Problem # 2: You Don’t Have A Lead Problem, You Have A Funnel Problem
If you don’t have a system to consistently generate leads, and turn leads into customers, you don’t have a business you can grow…you have a business based on hope.
Many mortgage Loan Officers start buying leads and love seeing them pour in–but are frustrated to see no new fundings materialize. Instead of jumping to the conclusion that the leads suck, you have to ask yourself “What was the process I used to qualify, nurture, and close the leads?”. Could your follow up system deserve the blame?
This is what I like to call the “leaky bucket theory”; one that many internet marketers preach: If you have a bucket with a hole in the bottom, it makes no sense to keep pouring in water until you fix the hole.
The bucket is your sales or marketing funnel, and you need to make sure you maximize the value of each lead-especially when you paid money to acquire that lead. Here are some questions to help you assess your marketing funnel:
Do you know the status of each and every lead that came in?
What is your process for qualifying a lead (i.e. how do you separate the good from the bad)?
Do you have an email follow up sequence for nurturing prospects that aren’t ready to buy right now?
How many good leads are leaking out of your bucket?
Do you have a CRM follow-up system in place to prevent leads from leaking out of the bucket?
I build marketing funnels for a living, and I’ve found that funnel visualizations help my clients organize and prioritize their strategies. Here is what my mortgage marketing funnel looks like:
Problem # 3: You Aren’t Measuring Anything In Your Marketing Process
I hear this statement a lot: “$XX a lead? That’s expensive.” Well, expensive is relative to the money you are making from the clients you close. If I put in $1000 to acquire a $4000 deal, that means I’m making $4 for every $1 I put in, or a 400% ROI. Mortgage Loan Officers who understand this concept, and are willing to invest smartly, are the ones making $30,000-$60,000+ a month.
But this begs a very important question.
If you don’t know how much it costs to acquire a new mortgage funding deal, then how can you ever have a repeatable marketing system that you can grow?
Do you know how much it costs to acquire a new lead, a new app, or a new funding?
What is the maximum you can spend to acquire a client, and still produce positive ROI?
How many of my leads convert to applications?
How many leads do I need to generate in order to close one client funding?
What is my current return on marketing investment?
What gets measured gets managed…
The beautiful thing about marketing in 2019 is that ALL of those questions can easily be tracked, managed, and measured when you are generating online mortgage leads…as long as you have the right system in place.
The big transformation in your business happens when, let’s say, you know on average it costs you $800 in marketing to acquire a $4000 funding deal. That’s a 500% ROI: $1 in, $5 out, and it’s something that I regularly achieve with my Loan Officer clients.
This means if you want to generate $40,000 a month in revenue for your business, investing $8000 will do the trick (5:1 return on your marketing dollar).
What would this mean for your mortgage business?
Well, most importantly, this is a repeatable and scalable marketing process that you can turn on and off like a tap. You can now predict and model how exactly to grow your business. As opposed to crossing your fingers and waiting for the next referral to come in, this is something you can control..and this is how the pros do it.
Want to see what this should look like? Here is an example snapshot of the dashboard that I build for my clients. They get instantaneous ROI feedback whenever they log on to view it:
So the next logical question is…Ok, that sounds great and all, but what if I don’t have the time or expertise to build a digital marketing system for myself?
Leverage your “core competency” with the time you have in your day (Mortgage Loan Origination, Servicing Clients), and find someone that has already built that digital marketing system. Now, there are many pieces to your mortgage marketing funnel, and there are many service providers and software solutions, but the piece I would like to talk about that will fundamentally change your business is the fact that in 2019 it is easy to have your very own online lead generation system (the first stage in the funnel).
In 2019 You Can Have Your Very Own Mortgage Lead Generation System
Ten years ago, it would require a big investment in order to develop all the software, websites, and digital advertising methods in order to have your own lead generation system. Today, it is easier than ever to, as long as you have proven ads, digital marketing funnels, and the right software tools. Say bye-bye to Zillow and Lending Tree leads.
Remember all the problems that we talked about earlier with buying leads: non-exclusive, no transparency, not real-time leads?
All of these problems are fixed when you have your very own digital marketing funnels. You know they are exclusive leads. You know how they are generated. The system works while you sleep. You can turn it on and off like a spigot.
There are many other digital marketing agencies out there that would like to sell you “SEO” services to get a website to rank in Google, but to be honest with you, this is something that can take 3-6 months+ to do, and there are no guarantees. So what’s the alternative?
With paid Facebook ads and paid Google ads, you can micro-target the right people, send them to a mini-website page, and generate long form leads (10+ detailed questions answered) that are delivered instantly to your inbox and mobile phone. Two important benefits to this system should stick out to you:
1. You no longer have to rely on real estate agents for referrals. In fact, you can send them your leads (some won’t be working with a realtor) to build some goodwill, and stand out against all your competitors that are also begging those RE agents for leads.
2. You will breeze past your competitors who are still relying on networking to generate leads. Networking is incredibly time consuming, and referrals are not predictable and consistent. With your own digital marketing system, you can save an incredible amount of time AND grow your book of business as fast as you want.
What Now? How Can I Get This Up And Running?
Hopefully I’ve helped you answer the “why” of online mortgage leads, how to avoid the common pitfalls, and how to take your business to the next level with smart paid lead generation. For those go-getters ready to grow their business and take massive action, there are really three choices to make:
Keep Doing What You’re Doing: Continue relying on realtor referrals and leads from the giant companies. For some Loan Officers, referrals and networking is what they want to do, and that’s fine…more power to them.
Do It Yourself: There are probably some of you with enough time and hustle to learn how to build funnels and test it along the way. In fact, I know some Loan Officers that learned digital marketing and built their own system; now they are 100% virtual loan officers and do no networking at all.
One challenge with this approach is that you not only have to learn the technical aspects of building these funnels, but also learning which ad copy, targeting, offer, quiz, and other elements will work to actually produce the leads. How much time and money will you waste reinventing the wheel?
Use Our Marketing Funnels: The main benefit here is that we can plug-and-play a proven system for you in your local market. Hundreds of thousands of dollars have been spent developing the right ads, ad copy, targeting, quiz, and landing page design to acquire Live Mortgage Home Buyer Leads. Our system guarantees an incredible ROI, or we wouldn’t waste our time doing it.
If you are interested in taking a peek inside our loan officer marketing system, and want to chat about how this could work for your business, click the link below to schedule a chat.
What mortgage marketing strategies have you adapted to your business for 2019 How are you generating leads, measuring your funnel, and converting prospects? I’d love to hear your perspective in the comments below.
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