We've all heard the old sales wisdom: "Success leaves many clues." With trial and error, we often deduce what is successful. Unfortunately, some of us will suffer an empty bank account in the process. In our business as a data and analytics solutions-provider to the mortgage industry, we do a vast amount of research and competitive analytics about the mortgage lead generation process. We witness successes … and failures … on the battlefield every day!
Let's explore some of the more transparent clues for planning a successful mortgage lead-generation strategy. Hopefully, I can offer you some “food for thought” … some powerful insights … about how others are competing and winning.
First, your campaign needs to be well planned. One does not simply put a quarter in the side of a mortgage vending machine and voilà! a deal is dispensed into the pipeline. Think of this as building a separate business within your business. It’s going to take some work; indeed, the hardest part isn't writing the check! The difficulty lies in making a paradigm shift: the strategic planning that needs to happen before you spend a single dime on a lead or a marketing campaign. Patently, there are no magic-bullets here!
I'm not going to bore you with the basics. Mortgage lead generation requires a great deal of care and nurturing. I'm assuming you've got a robust CRM system in place to manage prospects. You must embrace that this is a long game, especially for purchase-money leads. These can take multiple months before you see a ROI.
The Economics Of Mortgage Lead Generation Has Changed
Mortgage lead generation is dominated by online lead-aggregators. The economics of this game has favored those that could harvest the leads from cost-effective marketing campaigns, and sell them off to several lender partners. Online marketing is a complex and nuanced game. Many lead aggregators have been at it for years, and have honed many almost mystical skills. It makes sense they would have a competitive advantage in this arena.
All advantages aside, the cost to produce a lead has been on an upward trajectory for several years. Whether you're buying a mortgage lead from an aggregator or creating them yourself, mortgage leads don’t come cheap. At the same time, the mortgage market contraction has wreaked havoc on margins and profitability. (Said Captain Obvious!)
With decreased margins and profitability, the conversion targets that have created success in the past, may not produce a healthy bottom-line today. Don't get me wrong, it still makes sense to develop this channel. You have fewer competitors today slicing the pie, and this bodes optimistic. But for those that don’t adapt to the dynamics of this stressed market, it can be a slippery slope on the way to a collision.
Surely there are significant profitability challenges to the old D2C marketing model. To achieve a reasonable cost-per-acquisition (CPA), you've got to shift your thinking. If you can't just write a check for a batch of leads … and get a reasonable CPA … how is your competitor doing it?
How Some Lenders Are Still Making It Work
You've heard the recent headlines of Mortgage Co. "A" buying Real Estate Company "B," and Real Estate Portal "Z," acquiring Mortgage Co "Y." There have been several of these acquisitions in recent months. Many competitive synergies have been realized from these newly-forged partnerships. In my opinion, the most significant opportunity that stands out is the sharing of information and marketing strategies between the entities.
Vertical integration makes sense for many industries. Both Realtor and Lender have their respective costs to create a client. It stands to reason why these firms want to forge alliances to split the burden of them.
I'm not a regulatory-compliance attorney, and I certainly advise you to consult expert legal counsel before adopting this strategy in your business.
Some lenders have realized lower acquisition costs through co-marketing partnerships. How could this be done on a smaller scale? How can a single Originator add value to their relationships through co-marketing and data-purchase agreements?
Let Me Count The Ways …
* Partnering to cross-sell new leads opportunities generated from co-branded marketing campaigns.
* Mining, monitoring, and re-targeting your agent's past-customer databases.
* Mining, monitoring, and re-targeting the old leads your agent purchased.
* Monitoring your agent's non-qualified leads for migrating credit scores.
* Purchasing aged mortgage leads from the aggregators in a partnership with your agent.
As you can see, there are “acres of diamonds” in collaborative relationships that strategically work available data to the parties. This isn’t new news, but it’s compelling news for those seeking a competitive edge.
Summarily, team up with your referral partners! Sit down and figure out if there is a way you can market more effectively … together. As the old saying goes, “Two minds are better than one!”