A Syracuse, NY TV station had a “Consumer Reports Money Adviser” fill out a LowerMyBills mortgage inquiry to see what actually happens when some one fills out a forms. Needless to say they reported a sub par experience and complained about “too-good-to-be-true” mortgage offers and the overwhelming amount of phone calls.
“Within an hour lenders started calling him. He was swamped with calls at all hours of the day and night, even on weekends.”
You can read the short article here, but they also complain about the misleading advertising that LMB performs. The humorous part was they claimed they found better options at Bankrate. Most people in the industry know that many of the rates listed on Bankrate are completely off base. I specifically reviewed the lowest rates on the site and there was no possible way that were feasible.
So here is the issue. LMB has been struggling for the last 9 or more months. Quality has been in the crapper for at least that long and they haven’t been able to turn a profit for the last 3 quarters, but they continue to deliver the same quality leads from same crazy banner ads. I mean there is a blog that specifically marks every LMB ad that comes out (and I must admit, they are all pretty creative ads). I get the feeling that LMB is more concerned with producing crazy banner ads than good quality leads. There also seems to be some level of turmoil in the company. We all know that Coffin hit the road a few month ago, but now it seems they are either firing or loosing good sales reps to boot. My LMB sales rep completely fell off the map without any notice. They are still selling leads at half price to a chosen few just to keep them on the network. So what going on over there? Are they so detached from the industry that they don’t here all the chatter and complaints. I kind of doubt that.
I understand that LowerMyBills will be introducing a new product or adding on to their current product with more verified fields in their leads. I have heard that they are planning on verifying the consumers debt, loan amounts, credit scores (which they already do) and other key data points. This obviously makes some sense, especially because have Experian as a their parent company, but will this help increase quality? Sure, I guess on many levels it will, but I think they will continue to fall short.
When is LMB going to focus on changing the way the data is collected and the education of the consumer. Its clear, based on this article that people are not educated on the process and have no idea what to expect. I don’t want to beat a dead horse, but LMB has a chance to revolutionize lead-gen. Will they, I doubt it. I assume they would rather make fun ads and verify data all day long.
The game is changing LMB are you going to change with it?
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LC,
I didn’t see the TV report, but you stated earlier that the customer experience was bad because of ““too-good-to-be-true” mortgage offers and the overwhelming amount of phone calls.”
Later, you write:
“When is LMB going to focus on changing the way the data is collected and the education of the consumer. Its clear, based on this article that people are not educated on the process and have no idea what to expect.”
The system is inherently broken. I think if we examine the customer issues, there is no way that improved data collection and “education of the consumer” will solve.
Do you think if they told it how it is and stated “Fill out this simple form and get your phone numbers to ring off the hook from aggressive loan salesmen for God knows how long”, we’d solve the problem?
Your right to an extent Paul. Your wrong in that improving the education processes through the way the data is collected won’t help solve the problem, it will help. Of course there are a ton of idiot brokers and LO’s that add to much of the problem as well, but I will leave the critiquing of the sales process to Bill Rice and his BetterCloser blog.
To your last question: Maybe, but that is not necessarily what I am talking about. LMB already tells the consumer how many people are going to call them, of course not to what extent.
Paul the system is broken and giving the consumer the ownership of their information is the only way I believe it can be fixed. How do you think it can be fixed?
Giving consumers ownership of their information sounds like a good thing, but what do you mean by that?
The “lead generation” industry is founded on the concept that a consumer will willingly share their personal information over the internet to a “marketplace” of vendors.
Some of the things that we discussed at Leads2007 which perhaps will “give ownership” or rather “give control” of the consumer’s data back to the consumer include
1. Controlling to whom/which lenders their information is sent.
2. Giving instructions on contact methods allowable
etc,.
Consumers should get what they want for free, anonymously and then be able to chose from there to allow lenders to contact them or contact lenders.
All of this is great, theoretically. The next issue would be finding a business model that will make this work economically for both sides.
“The “lead generation” industry is founded on the concept that a consumer will willingly share their personal information over the internet to a “marketplace” of vendors. ”
You have mentioned that this is a broken system already. So this model needs to be changed.
I think you and the discussion at Leads2007 are only at the surface of what could be done and I think it could easily be monetized on both ends. For me to clearly go into it would involve writing an extremely lengthy post “Executive Summary” (my ADD will not allow this) and if I were to do that I should probably send it to a VC first. lol
It’s all hypothetical to some extent, but very doable.
do it, and be the next coffin/lebda
Critic- Would you login to a leadgen site and post full disclosures for the consumer to review – based on a credit report, full application and appraisal viewable on the leadgen site?
Dan,
possibly. Would you?
Perhaps… I’m just wondering how far into the sales cycle leadgen could possibly take the consumer… I bet some consumers could make it all the way to the decision to purchase without ever talking to a loan officer… and leadgen could track the variance of the initial offer to the actual closing to weed out bait and switch lenders with a high variance… why stop improving the consumer experience at reducing the number of annoying calls?
Dan,
Exactly! There are already products out there that allow the consumer to price their own loan with out speaking to an lo. I am not sure lead gen would ever get to that point but now we are thinking alike.
With regards to your last comment and question. I think it is possible for a consumer to receive offers from banks or brokers with out ever talking to them. However this would really change the landscape and could increase domination of a few banks or brokers that could out price all the competition. If this happened it could be counter intuitive to improving the customer service level. Companies would only focus on price and not service. So I think a line would need to be drawn somewhere.
I think one of the missing pieces to make this happen:
“1. Controlling to whom/which lenders their information is sent.”
Is that, believe it or not, borrowers don’t know who to chose or don’t care.
I equate it to lenders choosing lead providers. They don’t know the difference between their methods and performance. It is all trial and error.
I think there is another missing piece. We need to not only give them tools to build there mortgage file/folder, but also to intelligently chose their lender.
As for Dan’s comment:
“I bet some consumers could make it all the way to the decision to purchase without ever talking to a loan officer”
We proved it at DeepGreen Bank to the tune of $1.5 billion/yr and not a single LO in the building.
Bill,
You’re right on… most consumers only visit our industry for about a month every 7 years, give-or-take, and they don’t want a loan, they want what the loan gets them, a house, lower payments, etc. But they also want the best deal and they want it handled competently… that’s where they need help… leadgen could help them determine the best loan and a few of the best companies for their scenario… get the offers in black-and-white for selection in a no-pressure environment… they could provide customer service ratings (like amazon.com), track and provide lender performance stats (like a quote-to-close variance on cost and rate), and even refer out to other verticals if a home loan isn’t the right option.
Look at this comment by PeggyAnn McConnochie, vice president of the National Association of Realtors in an article today by Tracy Byrnes on TheStreet.com (URL: http://www.thestreet.com/s/what-to-do-if-your-mortgage-lender-goes-bust/newsanalysis/opinion/10375737_3.html )
“Just don’t go on the Web! Lendingtree.com and Ditech.com may offer ridiculously cheap loans, but then they hit you with exorbitant fees and penalties that are barely disclosed in the offerings. “They’re like the slimy car salesman,” says McConnochie. “Too many people get loans on the Web without knowing the whole story.”
Start with your local bank, and get a real person in front of you. Ask questions. Make sure you understand the specifics. Get a good-faith estimate and compare it with your other offers. “
My sense is that even LendingTree holds back from the consumer because there’s just so much money to be made… better to leave the consumer on their own to figure out which deal is the best. That is why they entered retail lending instead of focusing on the consumer and developing a more competitive model.
Dan,
Great comment and thanks for the link and quotes.
TY Critic. I’m also wondering… perhaps the LMS community could help leadgen nuture the consumer through the various stages of the sales cycle and address the issues that were defined in the kaleidico leadbuying.com blog here: http://blog.leadbuying.com/index.php/2007/03/30/generating-mortgage-leads-differently/
It seems to me that it would make sense for leadgen to do this.