Old days are gone when people would contact you to get leads. Now, everything is shifting online, and it’s making all the loan officers frustrated. Due to online transition, borrowers submit their applications online, and loan officers have to purchase leads from websites to hunt clients and close them. Loan officers spend money and rely on leads in many cases, but they don’t always work. Every loan officer sees an online strategy to be part of the solution. However, many end up buying leads that go in vain. Zillow and Lending tree are some top websites for mortgage leads, but the leads don’t always work. If you’re a loan officer, you must have bought leads at some in your life but were easy to convert? Well, three prime problems tell us why buying leads don’t work much. Let’s get down to them.
You Buy Leads With No Value
There are many online websites online which are trying to sell you leads. Usually, each lead costs around $20-100. Some big players include Zillow and Lending Tree. Zillow had around 6.4 million requests for mortgages in 2018. Therefore, Zillow uses the information and monetizes them by selling it to loan officers.
Similarly, the Lending tree also offers leads, but they have high startup costs, and they sell leads to many loan officers, making it difficult to close clients. The major problem with all these leads is that they are non-exclusive and not in real-time. Therefore, all these leads are inferior and of no value.
Let’s see what each aspect of poor leads means.
It happens that when you call a prospect, you get to know that several other loan officers have already contacted them. Therefore, the websites are selling those leads to any loan officer in town, increasing the competition. However, you should always try and come up with a compelling strategy to close these clients. Besides, some companies also offer exclusive leads, but they are sent to other brokers as well.
Before purchasing leads from a company, have you ever tried to ask them the following questions:
- Where did they get the leads from?
- Are these leads completely new, or is the company recycling them to maximize their income?
- Is the company using any shady strategy to get the info from the leads?
If you don’t have your digital system of generating leads, you’ll always have these questions jumbling around your head. Since multiple loan officers are contacting you, there’s no room to trust the websites to recycle the leads.
If you aren’t a part of the lead generation team, you’ll not know when the company got these leads. It could be from last week or the last five minutes. If you follow up with your leads in five minutes, you have a high chance to close them. However, recycle leads can make a mess. Moreover, Zillow recommends thirty seconds to contract the leads for a follow-up.
This is because when a person fills a form, they are impatient and waiting for your call. The faster you call them, the higher is the chance to strike a deal with them.
Should I Spend My Money on Mortgage Leads?
It’s really up to you and your persuasion skills. You should build a system and buy these leads if you are new to the market and would like to set up your name. You should know that a mortgage borrower submits their loan request on multiple sites. In turn, a lead provider sells these leads to 3-5 officers, which adds to the competition.
It’ll be hard to close on someone unless you have a quick follow-up system and a magic persuasive skill.
Your Conversion Method May Be Poor
If your leads don’t turn into customers, then your business is based on hope. It frustrates a person when their leads don’t give them money. However, if you’re one of them who blame their leads, review your marketing funnel and conversion tactics. Do those tactics deserve your blame?
You should develop a follow-up or closing plan that builds trust with leads and compels them to act if that’s true. You should strengthen your marketing campaigns and work upon maximizing value through them. It’s important because you spend a lot of money getting leads, and still, they don’t generate profit. Analyze your marketing funnel using these questions:
- How to qualify a lead?
- How do you build trust with them?
- Do you know what type of leads you get?
- Do you have an email follow-up planner to educate prospects?
- Is there a CRM follow-up in place?
All these questions will help you to analyze the leaks in your business and solving them. Create a marketing funnel that works and gives you a reasonable ROI. Following is a typical marketing funnel model.
You Might Not be Measuring Your Return Accurately
Many people claim a lead to be expensive. However, being expensive is relative to the money you make from your clients to close. For example, spending $1000 to close a deal of $4000 makes a 400% return. Officers who think like this are smart, and that’s how they can make a decent amount per month.
However, if you’re unaware of the cost of getting a deal, how can you have a scalable system? Following are the questions you must ask yourself:
- How much it costs to get a new lead?
- What is your budget to spend on a still and still get a reasonable ROI?
- How many leads can you convert?
- What is your return on marketing costs?
When you have a perfect digital system to monitor, you can manage and track all of these questions. A digital system will help you transition to a phase where you can get a 500% ROI.
How Can It Help the Mortgage Business?
This system is repeatable and scalable, which means that you can increase your marketing budget when you want to go high without suffering a loss. Moreover, you can predict your returns and have complete autonomy in the process. It helps you to know how to ascertain your ROI and calculate your earnings. Here how a digital system looks like:
You might think that it’s difficult to create one yourself? Don’t worry; focus on finding someone who has a digital system. Multiple providers can get you easy software that can help you track your business.
Previously, you would have to invest a lot to create your lead generation system. However, as long as you can target an audience with ads, have the right software, and build trust, you can get your lead generation system. With your system, you’ll have real-time, exclusive, and completely transparent yields.
Using Facebook and Google ads, you can specifically target a segment of your audience. Using these methods, you won’t have to go to referrals or real estate agents. You can send leads to these realtors as a way of building trust. Moreover, it takes time to build connections and get referrals which don’t promise reasonable results.
Therefore, it’s better to build your own system and generate leads.