Mortgage Research Results Revealed

Find out what 1,000’s of lender responses were in the MBA Contact and Lead Vendor Analysis studies. Companies pay significant amounts for market research like this, but Insellerate is sharing it with Tomorrow’s Mortgage Executive readers in this article. Josh Friend, CEO at Insellerate will reveal the results and walk us through the survey findings and what he shares might surprise you.

The MBA contact study we’re going to reveal hasn’t been done in three years. We’re the last provider that’s done a study where we’ve reached out to lenders to see how they responded to potential borrower lead inquiries. In addition we also conducted a lead performance and engagement study that shows how lenders can increase conversion and how leads perform across their network. 

We’re going to cover both those research reports in this article. This is the fourth MBA contact study that we have done. We surveyed between 450- 1,000 lenders and we go on their website and we apply for a loan. We have a burner phone and email, the whole nine yards. We then track when they email us, call us, or text us, and how quickly those took place; how often do try to contact us? We compile that data. This year, only 40% of the leads didn’t get responded to, so there has been an increase in response, but the industry has done poorly managing customers’ expectations and staying engaged with them.

A couple of things to think about, when you contact someone, if you get contacted within five minutes versus 30 minutes, you’re 21 times more likely to close a loan.

MIT did a study that if you call them in five minutes versus 30 minutes, you’re 100 times more likely you get a hold of them on the phone. Just speed, contact, consistency, coverage, making sure you’re calling all your leads, making sure you’re calling them quickly, whether they’re a prospect or a follow-up or long-term purchase shopper, are you staying in front of them? Are you covering them consistently?

Let’s talk about some of these stats. 

40% of lenders that we applied on their website to didn’t email us, call us, text us, they never even responded. It’s amazing how that could happen in today’s modern age.

For the 60% that did respond. Here are the response times, 18% in the first five minutes.

It’s about 23% in the first hour, another 24% in the next 23 hours, nearly half the people in the first day. Then there’s some trail off there.

That isn’t very good. The average time to respond to a lead was 19 hours. I mean, think about that. I go into your store, I’m looking to buy something, and it takes 19 hours for you to come back and tell me if I can buy it or not? I’m going to shop somewhere else.

We think it’s a competitive marketplace. It is, but if you’re not responding to people in 19 hours, you’re going to get beat every time.

This is a surprising set because text messaging is a wildly successful way to market to and connect and communicate with consumers. Something like 90% of text messages get read in the first five minutes, that’s how impactful text messaging.

Still, only 11% of the lenders texted. Yet, we know that consumers want text messages. We know it’s easier to contact people. We know we get responses faster.

Of the 60 people who responded; a little bit over half followed up with more than one response. I think the average was like 1.2 responses. Again, that isn’t very good. The people that did respond, they’d made one attempt. Maybe they emailed them, but that was it. Never a follow-up. Never another call, a text, no other way to reach out to them.

Of the lenders we applied to, this was surprising, ONLY 1% of lenders used all three methods to reach out to potential borrower by calling, emailing, and texting an online inquiry.

Let’s think about that for a second. We’re seeing that consumers go online, and by large, lenders do not engage with them, don’t manage the lead, or manage the contact, and rarely convert those potential leads. It makes sense, not all lenders have the technology to do this.

Here are some best practices that came out of the studies. Follow-up immediately.  If someone says, “Hey, I’m interested in a mortgage,” you should have someone call that person immediately. Then text them, make sure you’re consistent. Over a two-week period, have a consistent strategy, have a technology platform that manages all this. If you’re relying on, “Hey, I get an inquiry, and I email it to Sally and Sally’s going to call,” that’s not going to work or, “I’ll tell Sally and Jim, make sure you call all your leads from last week a second time.” That’s not going to work.

You have to have a systematic automated process to do this and then make sure you use personalization.

Of the 60% of the people that responded, something like 10 or 20%, did so with no personalization with the follow-up. The very generic, “Thank you for inquiring with ABC Bank. We will call you shortly, or if you have any information or any questions, please let us know.” I mean, that’s not what you should be portraying if you’re trying to help people get a loan and deliver a great customer experience. There’s only one thing that we can offer our customers that’s different from anyone else, that’s service. Let’s make sure we have excellent service, stay in contact with them, be relevant, and be timely.

We look at these numbers and say, “All right, so what does it look like if you were to engage leads better?” Well, so we did another research report. Now, this was actually to make sure we understood how our engagement platform was working.

Let me explain what our engagement platform is. What we do is we set up for lenders through our platform. It’s all automated. We have email pathways, direct mail, text messages, ringless voicemail, Facebook, Instagram, and phone call. We have the strategy and the content. We set it all up so that when a consumer says, “Hey, I want a mortgage.” Whether they call you, sit down face-to-face, or go online, they’re going to be engaged in a highly personal, professional, and consistent manner.  We have lenders on our platform that use all of our engagement tools, and we have lenders that don’t use all of the engagement tools.

We want to understand how well do our engagement tools work. We also want to know how well leads performed on our platform, like who had the best performance and what our lenders do with those leads?

At the end of this article I will provide you with a link so that you can download both research studies, but let me use some high-level numbers as we walk through this. There are 53 lenders we looked at; 27 had an active engagement, had two channels or more of contact strategy to the customer and the 26 that didn’t. We looked at over 274,000 leads. We looked at similar lenders in our platform, similar lead buys from the same top lead providers out there.

That’s how we diverged the groups, with how many channels of engagements the lender has set up. We looked at those 274,000 leads that turned into roughly 9,500 funded loans over two years.

First, to give you an idea of what this study had, this is about 3 billion in funded loans. The average conversion across the board is provided. This is something, that when you download the studies, look at your numbers and start benchmarking yourself. Is this how you’re performing if you’re buying leads? This is what the average lender is doing on our platform. All combine how leads convert within our platform. We broke it down to is what about those lenders with engagement and without engagement? Is there a difference? The answer is absolutely; there’s a massive difference.

Lenders with engagement with leads from Bankrate, funded at 8.18%. Lenders without engagement funded at 5.85%. That’s almost twice the amount of loans with the same marketing spend or half the marketing spend the same amount of loans. That is a massive savings. Let’s look at Lead pops. You’re a lender, and you have Ad on a Facebook page or your homepage, or somewhere. How do those perform? Well, lenders who use engagement funded, 6.75% of all those inquiries, lenders that do not have engagement only funded 3.5% of all those inquiries.

Of all the different things we looked at, Google Marketing, 282% increase in conversion, direct mailers, which many of our lenders incorporate into their lead strategy  209% increase in engagement, Zillow leads 133%, LendingTree, 121% increase in conversion. Monster Lead Group, which we have a ton of lenders on, 116% increase. Realtor.com, 103, Leadpops, 93%. Bankrate, 40% increase, and Free rate Update, 16% increase. These are significant numbers. If you bought 1,000 leads and you use our engagement platform versus not using engagement, you’re talking about $4 million a year of additional revenue per 1,000 leads.

If you produce 2,000 leads a month, you’re talking about $8 million a year in revenue you’re missing out because per 1,000 leads a month, you’re going to fund eight more bank rate leads, 11 more lead pops, four more loans from LendingTree, just an example set.

Let’s do the math, your average loan size, right? What’s that per year? What’s your average net basis point all in the margin? Now, we’re talking a large number. This is a lot of money. The stakes are high, and the outcome is excellent. What I think is great about this is, is the competition is low, and we just looked at the math. We looked at the numbers, 1% of lenders do all three, email, text, and call a lead, 1%.

Do you want to give someone that wow experience? Call them. You’re going to stand out because only 1% of lenders are calling, emailing, and texting a customer. Make it easy; only 11% of people are using text messages. You can see why this stuff does work. What we can see in the industry is that lenders don’t do this effectively at all. More than half the lenders aren’t effectively communicating with their leads. Half aren’t responding. The half that doesn’t respond with a personalized email or message, right? All you have to do is rise above it, give outstanding service.

What you need is a technology platform that delivers prebuilt strategies and workflows to consistently provide highly personalized engagement. This is what we provide. We have prebuilt workflows and strategies, predesigned marketing content. You can either create your own, or you can work off our templates. We create the content. Monthly content gets created, and we have a whole content library to start with. We have the strategy. Not only do we look at those studies, as far as the conversion of who closes more or less? We look at, well, what looked like that lender who’s funding the top quartile, what’s the contact strategy look like?

Is it three emails then a call? What’s the touchpoint? What seems to be the most effective way to get these customers to engage with you? That’s a strategy we roll out for you as well. It’s more than just lead management; it’s complete functionality. A fully built strategy that tells you precisely what your content looks like, what you’re going to do, how you’re going to ensure that you’re not like the 99% of lenders out there that don’t adequately respond to or work with their customers.

Download your FREE copies of these informative research studies here-  https://insellerate.com/2021-lender-research-results/