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Charles Dickens said it best when he boldly stated, “It was the best of times, it was the worst of times” at the beginning of A Tale of Two Cities written in 1859. Although I highly doubt he said that with the 21st century mortgage industry in mind, it is an apt way to describe lenders’ sentiments as of late.
On the one hand, recent rate cuts by the Fed have fueled an unprecedented level of consumer demand. In addition, a recent Morgan Stanley report found that almost 75% of consumers can now benefit from refinancing (defined as a difference of 30 basis points between the consumers’ current rate and the rate they potentially could now get) up from about 25% in December. This is good for the industry and for consumers. Further, this is an area of focus for presidential candidates. Initiatives such as Project Lifeline and talk of increasing conforming loan limits increase consumer awareness. The result of all of this is a dramatic increase in interest from consumers to research mortgages and refinancing options online.
Yet, this level of consumer demand also makes it much more challenging for mortgage marketers and lenders alike to provide homeowners with the help and guidance they need.
• Mortgage marketers and lenders alike get slammed with consumer inquiries.
• The consumer experience suffers because service levels tend to drop.
• Consumers become frustrated by unrealistic expectations set by media and advertisements.
Under these circumstances, both mortgage marketers and lenders need to partner closely, and increase their focus on marketing and operational effectiveness to provide the best possible experience for consumers.
What does this mean for the mortgage industry:
• Mortgage marketers must set appropriate expectations for consumers with their marketing messages. Advertising messages and consumer expectations must align with what lenders can actually fulfill.
• Maximize the number of desirable consumers that respond to the most relevant marketing messages.
• Offer transparent data sharing that allows both sides to see which traffic sources, creative, messages and consumer types are converting best for lenders.
• Leverage technology, particularly in the online space, to continually maximize the performance of leads in real time
• Micro-target segments within the consumer audience to deliver the most relevant loan offers to consumers.
A specific example: After the fed rate cut, Adchemy saw a dramatic change in impression to conversion rates across multiple web publishers. Due to our predictive algorithms, we were able to figure out how to allocate our traffic in order to maximize efficiency both for us and for our lender partners. Today, our customers have experienced a two to five time average increase in return on investment.
At Adchemy, we know that past success does not beget future success. Traffic sources, creative and messages that worked well in the past may not do so in the future. It is only by partnering closely with our lender partners that mortgage marketers can stay on top of a rapidly evolving market to deliver the best results to lenders and the best experience to consumers.
To that end, we are open to any and all creative ideas about how to partner better with lending partners. Drop us a line to give us your thoughts at ideas@adchemy.com or comment here.
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5 Comments
Murthy,
I think you hit it on the head with a number of your points and the problem is so many times business look past them.
1. Setting the correct expectations. So many times sales teams are focused on the sale that they set incorrect expectations.
2. Constant communication with your customers.
3. Transparency. so many buyers are afraid of this and in the end it slows or halts their growth.
great post.
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Right! I would be curious to know if passing the advertisement information to us, the lead buyer, would help complete the process and be able to set the appropriate expectations for the consumer or if this would be a distraction to the sales team.
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your right on, but I think it is easier said then done.
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M–
we see impressions increasing but interestingly we don’t see the FHA mortgagor profile–i am inclined to think your impressions or for that matter the industry’s impressions are a profile we cannot help in many instances—the DU restrictions recently with FNMA and the price increases they build into the rate are critical issues…the FHA manual underwrite is now very common — and very hard. i cannot seem to get a feel from your industry–we like quinstreet and nextag for years as to reaching the FHA mortgagor–especially in new higher loan amount markets–the responses i get are –respectfully..kind of wierd….the inference is it requires too much info–easier for the marketing dept to GET an impression and sell it five times (which i understand–its the revenue game)—but the impression…is different now-am now considering going back to the fundamentals–telemarketing DNC approved FHA data and mailers–the target audience is an audience i can help—the impression audience is albiet–wierd right now.—adchemy is an excellant company and has quite a team of minds–your thoughts on the FHA mortgagor is of interest to me–especially as it relates to the future of internet related mortgage impressions
thanks
L Gregory Brown
[Reply]
This article brings up an interesting idea. Can leadgen and lead buyers team together to target only the consumer that can be helped in the current market? And can it still be profitable for leadgen? Greg, we’re considering the same change.
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