Rethinking lead generation for a post-pandemic world
November 24, 2021 2:41 PM
As margins tighten, text messaging has taken on new importance in mortgage customer prospecting, with some lenders even using it as a method for distributing videos that aim to educate and entice consumers.
But whether more traditional contact methods, such as direct mail, are effective in the post-pandemic environment remains a question heavily debated among lenders as they face the prospect of having to put more effort and dollars into lead generation in 2022.
Originations are expectedto significantly decline in 2022 and as refinances dry up, lenders are likely to return to tactics they largely haven’t had to deploy since the spring of 2020.
"With less business falling in the door comes the need to hunt for business and that's not something that the industry has seen now for at least a year and a half," said Grant Moon, a mortgage industrylead generation expert and the former CEO of Home Captain.
But originators are also all going after the same customers, looking to keep volume up. A long incubation cycle exists for the leads that do exist and the risk of fallout is high. That is only exacerbated by gain on sale margin compression cutting profitability.
Still, consumers are now more willing to fill out online contact forms, albeit with some hesitation because of the resulting robo calls, Moon said. "That being said, people will still need to be speaking to lenders, people will still be getting quotes for mortgages," Moon said. "And because of that, there will be a lot of consumers that are looking for the convenience of filling out forms online, doing comparisons online for mortgages."
But whether more traditional contact methods, such as direct mail, are effective in the post-pandemic environment remains a question heavily debated among lenders as they face the prospect of having to put more effort and dollars into lead generation in 2022.
Originations are expected
"With less business falling in the door comes the need to hunt for business and that's not something that the industry has seen now for at least a year and a half," said Grant Moon, a mortgage industry
But originators are also all going after the same customers, looking to keep volume up. A long incubation cycle exists for the leads that do exist and the risk of fallout is high. That is only exacerbated by gain on sale margin compression cutting profitability.
Still, consumers are now more willing to fill out online contact forms, albeit with some hesitation because of the resulting robo calls, Moon said. "That being said, people will still need to be speaking to lenders, people will still be getting quotes for mortgages," Moon said. "And because of that, there will be a lot of consumers that are looking for the convenience of filling out forms online, doing comparisons online for mortgages."
Engagement with intent
Lenders need to focus their marketing efforts online, including on social media sites like Facebook, Instagram and TikTok, to reach consumers, said Josh Friend CEO of customer relationship management software provider Insellerate.
"We have some lenders that are doing some extremely sophisticated marketing techniques online digitally, that are very powerful and so it's starting to change," said Friend.
Originators, he continued, need to practice customer engagement with intent: reaching out when the consumer starts to show any signs that they’re early in the process of looking for a house or if they are rate shopping or considering taking out equity.
In the past, the borrower, even a past client, contacted the lender first.
"The new way is really understanding buyer behavior, understanding market engagement early on [and] understanding long-term engagement," Friend said. Lenders already have past customer's information. So the next phase is to keep them engaged after their loan closes.
"What things can you give to them as time goes on of value?" Friend said. "Can you give them a home value report?" This makes the lender “front and center when a consumer wants a new loan.”
But a mindset shift still needs to be made. "Consumers expect that ability to communicate and interact with you on their terms and time and lenders just don't do that," Friend said, pointing to data from the Insellerate 2021 Comprehensive MBA Contact study that shows just 11% of them use text messaging to contact borrowers after they inquired about a mortgage.
More discouraging is the finding that 40% of respondents admitted to never responding to a customer inquiry. While 18% responded within 5 minutes to a request, nearly 25% said it could be as long as a day.
"We have some lenders that are doing some extremely sophisticated marketing techniques online digitally, that are very powerful and so it's starting to change," said Friend.
Originators, he continued, need to practice customer engagement with intent: reaching out when the consumer starts to show any signs that they’re early in the process of looking for a house or if they are rate shopping or considering taking out equity.
In the past, the borrower, even a past client, contacted the lender first.
"The new way is really understanding buyer behavior, understanding market engagement early on [and] understanding long-term engagement," Friend said. Lenders already have past customer's information. So the next phase is to keep them engaged after their loan closes.
"What things can you give to them as time goes on of value?" Friend said. "Can you give them a home value report?" This makes the lender “front and center when a consumer wants a new loan.”
But a mindset shift still needs to be made. "Consumers expect that ability to communicate and interact with you on their terms and time and lenders just don't do that," Friend said, pointing to data from the Insellerate 2021 Comprehensive MBA Contact study that shows just 11% of them use text messaging to contact borrowers after they inquired about a mortgage.
More discouraging is the finding that 40% of respondents admitted to never responding to a customer inquiry. While 18% responded within 5 minutes to a request, nearly 25% said it could be as long as a day.
Influencing customer interaction
While the pandemic and refinance boom are really separate phenomena, it's hard to know which one is causing which consumer behavior, said Nick Belenky, chief revenue officer for Top of Mind, which offers customer relationship management system Surefire and is now owned by Black Knight .
Lenders are "looking for ways that they can influence borrowers to interact with their websites, interact with him socially, through social posts and are looking for sources of content," Belenky said. So Surefire is creating social content for its clients to help them deal with what it calls the "refi boom recovery."
But that is not enough. Counter to prepandemic research indicatingdiminished influence for direct mail, Surefire is creating omnichannel marketing pieces such as direct mail to enhance contact. Consumers are getting inundated by email, especially now that many people are working from home, Belenky said.
As part of the omnichannel experience, "we're being asked to deliver physical — physical closing gifts, physical postcards for lead generation in addition to mobile outreach.
"They're at home working and getting physical mail in a location that is the same place where their decisions are made," Belenky said. "So sending physical goods to the home just becomes more effective when people are in the home more of their day."
Those mailings work in tandem with text messaging video, about, for example, someone's milestone in their home purchase journey, Belenky said.
Big Purple Dot recently added SMS/MMS video marketing into its CRM lead management platform.
The pandemic meant originators had to "not only conduct business in a virtual way, but also they needed to stay connected with the borrowers with no interaction," CEO Roxana Davidoff said.
Unlike Belenky, Davidoff sees physical pieces as a casualty of the pandemic. "They were so fixated on mailers but overnight because no one wanted to handle anything coming from the mail right due to contamination, that all changed," she said. "Because no one wanted to handle anything anymore, we had to find a more creative way to interact and connect with borrowers."
Consumers are expecting a seamless experience in getting a mortgage, one they can do from the comfort of their home.
"We're seeing more and more lenders leverage the marketing that combines SMS, MMS, AI, customized text and multimedia messaging with what Big Purple Dot does, video," Davidoff said. "So all of those things now have kind of pushed this industry forward as it relates to the communication and the way that we communicate with the borrowers."
And that led to adding video to text messages. Users are creating personalized messaging in those videos to make the connection with the prospect.
"It's much more pointed to the borrower and what their specific needs and wants are," Davidoff said. "We're trying to connect with them because we can't connect with them in person."
Leaving a voicemail message is not going to work, she said. If anything, many people have stopped checking their voicemail, especially if it appears to come from a mass marketing blast. They would rather have that text message.
"People want things now, they want it to be personalized and they want it to connect with them," Davidoff said. "If it doesn't connect with them, if it's not personalized, they don't want it."
Lenders are "looking for ways that they can influence borrowers to interact with their websites, interact with him socially, through social posts and are looking for sources of content," Belenky said. So Surefire is creating social content for its clients to help them deal with what it calls the "refi boom recovery."
But that is not enough. Counter to prepandemic research indicating
As part of the omnichannel experience, "we're being asked to deliver physical — physical closing gifts, physical postcards for lead generation in addition to mobile outreach.
"They're at home working and getting physical mail in a location that is the same place where their decisions are made," Belenky said. "So sending physical goods to the home just becomes more effective when people are in the home more of their day."
Those mailings work in tandem with text messaging video, about, for example, someone's milestone in their home purchase journey, Belenky said.
Big Purple Dot recently added SMS/MMS video marketing into its CRM lead management platform.
The pandemic meant originators had to "not only conduct business in a virtual way, but also they needed to stay connected with the borrowers with no interaction," CEO Roxana Davidoff said.
Unlike Belenky, Davidoff sees physical pieces as a casualty of the pandemic. "They were so fixated on mailers but overnight because no one wanted to handle anything coming from the mail right due to contamination, that all changed," she said. "Because no one wanted to handle anything anymore, we had to find a more creative way to interact and connect with borrowers."
Consumers are expecting a seamless experience in getting a mortgage, one they can do from the comfort of their home.
"We're seeing more and more lenders leverage the marketing that combines SMS, MMS, AI, customized text and multimedia messaging with what Big Purple Dot does, video," Davidoff said. "So all of those things now have kind of pushed this industry forward as it relates to the communication and the way that we communicate with the borrowers."
And that led to adding video to text messages. Users are creating personalized messaging in those videos to make the connection with the prospect.
"It's much more pointed to the borrower and what their specific needs and wants are," Davidoff said. "We're trying to connect with them because we can't connect with them in person."
Leaving a voicemail message is not going to work, she said. If anything, many people have stopped checking their voicemail, especially if it appears to come from a mass marketing blast. They would rather have that text message.
"People want things now, they want it to be personalized and they want it to connect with them," Davidoff said. "If it doesn't connect with them, if it's not personalized, they don't want it."
Getting through to the prospect
The old mentality about text messaging, said Andrew Weinberg, principal of mortgage broker Silver Fin Capital, was that making this form of contact was intrusive.
"And now it's much more common to be sending notifications, not necessarily marketing, but to send notifications about a loan or maybe a client who was waiting for rates to be in a certain place," Weinberg continued, noting that text gets through to the consumer better than mail or voicemail.
Even working through lead generation sites like LendingTree is not as effective anymore, because consumers are screening their calls and if they don't recognize a number, they let it go to voicemail.
He is not as concerned about shifts in the market, recounting a conversation he had a decade ago with a wholesaler’s account executive. "He's like 'what are you doing to prepare for the coming purchase market?' and I remember interrupting him and saying, 'I'd rather, instead of preparing for what's coming, why don't we just talk about how we can capitalize on what's here today.'" And right now, Silver Fin is still seeing significant refinance business.
The message is the key. "When reaching out to a client to sell something, you're hopefully selling the benefit," Weinberg said. "And you can't fake that."
"And now it's much more common to be sending notifications, not necessarily marketing, but to send notifications about a loan or maybe a client who was waiting for rates to be in a certain place," Weinberg continued, noting that text gets through to the consumer better than mail or voicemail.
Even working through lead generation sites like LendingTree is not as effective anymore, because consumers are screening their calls and if they don't recognize a number, they let it go to voicemail.
He is not as concerned about shifts in the market, recounting a conversation he had a decade ago with a wholesaler’s account executive. "He's like 'what are you doing to prepare for the coming purchase market?' and I remember interrupting him and saying, 'I'd rather, instead of preparing for what's coming, why don't we just talk about how we can capitalize on what's here today.'" And right now, Silver Fin is still seeing significant refinance business.
The message is the key. "When reaching out to a client to sell something, you're hopefully selling the benefit," Weinberg said. "And you can't fake that."
A unified consumer experience
Another model that is being turned on its ear is the traditional flow of leads from the real estate agent to the lender. Today, consumers want a single, unified experience, getting the pre-approval first and then contacting the real estate agent, said David Camp, president of HomeScout.
Consumers are already getting that from large companies likeZillow andRocket. "And if the local lender, if the regional lender is not committed to doing the same, that as this engagement online just continues to increase they're going to lose opportunity in the purchase environment," Camp said.
HomeScout gives lenders a platform in order to compete that way with Rocket.
"You have to be confident as a lender in the ability of that network to be able to service and fulfill the needs of that consumer that was acquired online," Camp said. "And not every [real estate agent] has the ability or understanding how to engage and manage an internet consumer."
Consumers are already getting that from large companies like
HomeScout gives lenders a platform in order to compete that way with Rocket.
"You have to be confident as a lender in the ability of that network to be able to service and fulfill the needs of that consumer that was acquired online," Camp said. "And not every [real estate agent] has the ability or understanding how to engage and manage an internet consumer."
Educating those with challenges
HomeScout clients are reporting a significant portion of their leads, between 30% and 35%, are facing some sort of financial hardship, particularly when it comes to student loan debt.
"And one of the biggest challenges that we're facing is many of our lender clients don't have an effective path to help that consumer become financially set so we as a part of our journey, we're having to develop products that empower that consumer to actually get the help that they need to get qualified to buy a home," Camp said. These are the future mortgage clients and that is why loan officers need to engage them.
And it is not just the buy side that lenders need to work on educating. Ahome seller is also a potential mortgage client.
"We have had to really move down a path of becoming much more sophisticated on engagement of the online seller and also the education that we have to provide to them so that we can keep them attached to the lender," Camp said. "So seller education is critical to what we're doing in online lead generation for our clients today."
Insellerate's Friend implored mortgage lenders to hire a digital strategist for their marketing, someone that knows not just text messaging but contact methodologies on social media and the web.
"All lenders need someone that's working on digital strategy and understands all the touch points, all the data points, all the ways to successfully interact with your borrowers and continually interact with your borrowers," Friend said. "That's going to be imperative going into the future."
"And one of the biggest challenges that we're facing is many of our lender clients don't have an effective path to help that consumer become financially set so we as a part of our journey, we're having to develop products that empower that consumer to actually get the help that they need to get qualified to buy a home," Camp said. These are the future mortgage clients and that is why loan officers need to engage them.
And it is not just the buy side that lenders need to work on educating. A
"We have had to really move down a path of becoming much more sophisticated on engagement of the online seller and also the education that we have to provide to them so that we can keep them attached to the lender," Camp said. "So seller education is critical to what we're doing in online lead generation for our clients today."
Insellerate's Friend implored mortgage lenders to hire a digital strategist for their marketing, someone that knows not just text messaging but contact methodologies on social media and the web.
"All lenders need someone that's working on digital strategy and understands all the touch points, all the data points, all the ways to successfully interact with your borrowers and continually interact with your borrowers," Friend said. "That's going to be imperative going into the future."
