Brace Yourself: Everything Is About To Change

Check out the next post, which shows the 3 trade secrets local mortgage brokers must get right to prevent being disrupted in the Social Media Age.​

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 mortgage 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?”

3 Glaring Problems:

 

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, you can learn about it here.

 

Problem # 2: You Don’t Have A Lead Problem, You Have A Conversion 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 nuturing, relationship building, positioning, and 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 system (after you get the lead), 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 system:

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)?

What is your process for building trust with a lead?

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:

picture of a marketing funnel for loan officer leads

 

 

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:

mortgage loan officer marketing funnel metrics to show return on investment

 

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 system, 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).

 

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 have your own lead generation system…

…as long as you have proven ads, trust-building sequences, 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.

 

With paid Facebook ads and paid Google ads, you can micro-target the right people. Ones that are LOCAL to you and in the market for a mortgage.

 

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.

Those who are still relying on networking to generate leads aren’t going to win in 2020 and beyond. 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.

 

Brace Yourself: Everything Is About To Be Disrupted

There is a MASSIVE elephant in the room:

Right now, mortgage brokers think they can run Facebook or Google ads, get leads, and close those leads just like the big boys can (Zillow, Lending Tree, Quicken).

 

There’s one word preventing that from happening:

TRUST.

 

Did you know that “mistrust” is at an all-time high online, and its getting worse.

 

Just look at people getting scammed left and right. Getting their identies stolen..and more.

 

I used to think:

Once you got the lead (say for a mortgage quiz), you were good to go. Wrong!

 

If you’re a local mortgage broker, most likely you have NO BRAND…and if someone sees you for the first time, and submits their info, you’re looking at an astronomically small chance they are willing to trust you to do business right now.

 

So why can Lending Tree, Quicken, Rocket Mortgage, and Zillow do it, but I cant?

 

Good question, it’s called Social Proof and Brand. Almost everyone knows who they are, and they trust that they won’t get scammed.

(whether this is right/wrong is a different question).

 

Additionally, they have massive budgets, so they can play the long game (with millions of dollars) to break even….local mortgage brokers don’t have that luxury.

 

But Don’t Worry, We Have a Plan That Will Work Through 2020 and beyond for Local Mortgage Brokers. 

 

The 3 Crucial Pillars For a Mortgage Broker For 2020

 

There are 3 Crucial Pillars that you must do…in order to survive the coming “trust” dilemma, and disruption in the mortgage market.

To learn those 3 things, click the next button to read the next page.

Brace Yourself: Everything Is About To Change

Check out the next post, which shows the 3 trade secrets local mortgage brokers must get right to prevent being disrupted in the Social Media Age.​