Mortgage Leads The changing environment for Internet mortgage leads.

By Daniel Lucey
www.clientconfirmed.com

My first experience with Internet initiated mortgage inquiries was back in 1998. The company I worked for had always used direct mail but conversion rates had fallen to all-time lows and the phones had stopped ringing. Instead of closing the doors they began investigating Internet leads. At first, the tests were unsuccessful. The salespeople were used to answering the phone not dialing. 

The solution: have non-skilled CSR (Customer Service Representatives) call the internet leads first and turn over only completed applications to the Loan Officers. This system worked. The salesperson was able to focus on contacting only interested borrowers that appeared to qualify for a loan.

At that time many of the leads provided from the Internet were delivered in batch format once or twice a day. Mortgage companies often printed these leads out on paper and did not use any type of CRM (Customer Relationship Management) database. It wasn’t long before Internet lead providers figured out how to deliver the leads instantly from consumer to multiple lenders. This new type of lead supplier now dominates the web. You probably know most of them: LowerMyBills.com, Nextag.com, Adteractive.com, Low.com and many others. And, it wasn’t long before mortgage companies became adept at handling data and were able to place their first call within seconds of the consumer filling out their online request.

So these days it’s usually not effective to have a non-skilled CSR hang up the phone and expect the consumer to wait for a call back from the loan officer. The phone is usually ringing off the hook and the consumer is done shopping on the first day. So it’s critical to have a skilled person making the first call or transferring live from a non-skilled CSR to a Loan Officer. 

In general, closing ratios on the raw Internet lead run about 12-15%. So if you’re competing against 3-4 other companies your getting an equal piece of the pie if you’re closing at about 3% of the raw lead. To compete in this arena you must have a system that allows you to e-mail and phone your data the moment it’s received. Quick contact is the number one factor in successful closing on this type of lead. Here are the real numbers:

-60% of closings come from 1st day contact with the consumer.
-20% of closings come from 2nd day contact with the consumer.
-10% of closings come from 3rd day contact with the consumer.
-10% of closings amount from all remaining contact over time.
So what’s next? Please stay tuned for my next column.