When it comes to mortgage leads, optimizing your conversion rate can have an exponential impact on the bottom line of your business. Let’s break mortgage lead conversion down right out of the gates so that you know these strategies are worth investing 5-10 minutes of your time into learning more about. I speak of the average conversion rate of our platform in the context of my team being able to coach up our clients on the following strategies. This average conversion rate is approximately 3% but we hear of people often who worked Zillow leads or Realtor.com leads and claim to have gotten only a 1% conversion. When we hear that a prospective client was converting leads at less than 2%, we know we have a huge coaching opportunity to help them get their conversion to double or even triple in some cases.
Working mortgage leads to some degree is a science. If you have automated follow up systems engaging with the lead in less than a minute, and you have scheduled your follow up activities appropriately and have quality long-term drip campaign content, you can expect an average conversion rate on your leads and decent ROI. However, what if you want to take this a step further? What if you don’t have automated follow up and you just want to make the most of the leads that are put in front of you? This is where converting internet leads becomes more of an art than a science. This is where it becomes more important than ever to understand the following strategies so that you can become a pro at taking online inquiries and turning them into closings for you and your referral partners.
Remember, internet leads don’t become internet leads because they want to talk to a salesman or, in this case, a loan officer. No, internet leads are real-life people that are searching the web for an answer to a question that YOU have the answer to. It’s up to you to show that you’re the best person to answer that question for them and that you’re valuable enough to keep around for their preapproval and eventually (hopefully soon) the mortgage for their upcoming home purchase or refinance. So what are these strategies and how can you use them in your business?
Keep The Lead Engaged in You and the Process w/ Questions
When it comes to personal finance, everyone wants to feel like they’re in control even when 95% of the time they aren’t. As such, you never want to give the impression that you understand their whole situation after only receiving their lead form, or only getting a quick overview from the lead themselves. You may think that the best strategy here is to impress with your knowledge and make the process as easy as possible for them but think again. Internet leads want to feel in control by being engaged in the process. So how do you accomplish this?
The way I look at it is until I receive an application from the prospect or a hard-no on filling out the application, I’m asking questions with every message that I send. This applies on the phone as well, but the majority of initial conversations with internet leads these days are taking place via text message or email so I will address this strategy in that context. When you receive an inquiry, the first messages that you send the client should ask a question to get them re-engaged as they were when filling out your lead form. We always start with an introduction and then something along the lines of, “Did you have any specific questions about your scenario or were you just looking to get a general idea of the requirements needed to buy a home?”
Once this question is answered, no matter what the response is, you want to engage with an answer to their question and another question to follow. For example, if the lead in the previous paragraph responded “Looking to see what the minimum credit requirement for a mortgage is,” I would respond with, “Sure ___, that’s a great question! Honestly, loan programs vary wildly and some programs can take as low as a 500 FICO score (true, right?) but ultimately the lower your credit the more positive factors you’ll need to outweigh it in your application. Do you know approximately what your credit score is? This can give me a better idea of what you might need.”
Do you see how I gave the prospect an answer to their question, one that probably was more educational than any other response they would have received online or from someone else, and I opened the door for them to answer another question? This piece is crucial for mortgage lead conversion because again the lead did not go online and inquire because they wanted to talk to you. It’s up to YOU to keep that conversation going. Don’t think just because you paid for an internet lead that the lead should be knocking at your door with a pre-filled 1003 in their hand. That’s not how it works and the sooner you understand that the sooner your lead conversions will improve.
Get Them to Apply Early, But Not Too Early
This is where lead conversion becomes more of an art than a science. If you’re working internet leads though, you should have some sort of sales background either in mortgage or outside of it. As loan officers, it’s easy to forget sometimes that we are in a sales role, but for this, you’re going to need to put your salesman hat on and remember how to read people a little bit. The fact is if you can get a lead to apply with you your odds of converting that client just skyrocketed. Nobody likes applying for a mortgage and we all know how scared people are of a “hard inquiry” on their credit. This plays to your advantage, big time.
The problem is that people are VERY resistant at first to filling out a mortgage application. This is a huge commitment in the eyes of a lot of internet leads which means you have to do your best to earn their trust as quickly as possible so that you can earn the right to ask for that commitment. How do you do this? First off, you have to be likable… Communicate in the way that’s most convenient for your lead to get the relationship started off on the right foot. They say they want to email? Great, don’t try and move the conversation right off the bat. Engage with them via email and give them the same attention you would via text or phone call. Next, use tone matching to ensure you’re not talking yourself out of a potential deal. If the client is bubbly and uses smiley faces in their texts and emails, do it too. If the client uses short and direct sentences with appropriate punctuation, make damn sure you’re doing the same. Lastly, use the last strategy of asking questions to keep them engaged.
Don’t be afraid to offer an option that’ll make things quicker and easier for them. As long as you’re framing it from the position of someone trying to help, it’s not a bad idea to let them know after a few messages back and forth that a phone call could save you both some time. Don’t push the issue, and continue to communicate them on their preferred method, but offer another option for convenience.
Once you’ve got enough information to where you feel like based on the information they’ve provided, you could provide a reasonable assessment of their ability to buy, do it. It’s important here that you don’t give too much information (after all, you haven’t seen an app yet. Don’t want to get them too excited or discouraged), but that you give them enough to earn the right to ask for the application. For example, “____, based on the info you provided it looks like you could be really close to buying a home! My biggest concern is that credit is less than 700 which makes it difficult to pinpoint exactly what you can be approved for without having our system double check everything. If you’re seriously interested in knowing what you can get approved for, I’d be happy to provide a full analysis. Would you like me to send you a link to where you can get started?”
Notice I didn’t use the words “apply” or “application” although I made it pretty clear that’s what I was looking for. My online application also makes it very clear that it’s an online application so there’s no way for them to be fooled, but I’m doing my best to eliminate mental barriers with my word choice. Also, notice that I brought up a specific aspect of their application that I’m looking for clarification on in the “full analysis.” This makes it clear that you’re actually looking for something in particular, not just trying to get them to apply. Lastly, notice that the specific aspect of their application that I brought up was that their credit score is less than 700. Now in the mortgage world we know that the difference between a 680 and a 700 on a conventional can mean the difference between 10% on your DTI cap, or approve/eligible vs refer with caution. At the same time, if I get a 680 FICO across my desk, I’m not worried about their credit as long as everything else checks out right? So why did I highlight that specific point? More on that in the last strategy:
Want Better Mortgage Lead Conversion Rates? Be a Financial Dentist!
When I was a kid, I never understood why people hated the dentist. Don’t get me wrong, I hated the taste of that bubble gum flavored fluoride as much as the next kid, but every adult that I talked to and most kids said that they hated going to the dentist and I never understood why. I only went a couple times as a kid though, and I never had any cavities. The dentist always told me how great my teeth were, and I never had any problem when my parents wanted to take me to a new spot to take advantage of some special deal for new patients.
Fast forward to now, and I’m the complete opposite. I was advised of my first cavities about a year and a half ago, and ever since then, I’ve dreaded going to the dentist. However, the only person that can save me from my teeth-rotting self is, in fact, my dentist, which means I keep going back to them. Before, I never had a go-to dentist. I always just bounced around based on what was cheapest and most convenient. Now, I’d prefer not to have anyone else tell me about my cavities or lecture me about my flossing habits, so I go back to the same one that told me I had the problem in the first place.
What can you learn from this? Look, sometimes in our line of work, we have to deliver some really bad news. I think this makes us predisposed to think that the best way to handle a prospective customer is to make them feel as good as possible about their application and qualifications as a borrower. However, this is not in fact the case. Just as the dentists in my childhood pumping up my ego about how great my teeth are made me comfortable with any dentist I interacted with and made going to the dentist seem like a walk in the park, you can pump up the egos of your borrower to the point of wanting to shop around for the best deal, applying with any loan officer who asks them to.
The alternative and best approach is to identify potentially challenging aspects of their application and press the issues enough to make them feel a little bit of discomfort.
680 credit score?
Most would say “Oh that’s no problem, a 680 is a score that can qualify you for the majority of programs out there!” You want to say something more like, “Oooh, a 680 score… We definitely prefer to see a score in the neighborhood of 720-740 as this will typically qualify you for the best products, programs, and rates. With the other pieces of your application, you should still be able to qualify for a loan, just know it isn’t going to be on the terms that you’re used to seeing on TV or internet advertisements.”
5% down + closing costs?
Many would consider this a slam dunk and tell the customer something like, “5% down plus closing costs? Oh, you’re solid! In fact, you could probably qualify with even less if you wanted to!” The loan officer who says this may think they’re adding value, but really they’re just talking themselves out of a sale. If you want to have the best chance of converting your lead, you need to say something more like “It’s good that you have some money saved up. Ideally, we’d like to see a little more than the minimum requirement down, and some money left in the bank for reserves, but I’m sure we can still get you qualified for a loan. This just makes it even MORE important that you follow each instruction I give you very carefully, as we don’t have much room to make mistakes.”
Do you think that lead is going to be excited to go shop for a mortgage if they feel like they’re going to be prodded like that from each one? Of course not! In fact, I would say that when I started implementing this in my business not only did my conversion go up, the level of respect and appreciation my clients had for me increased as well! Try it out with your next lead. One thing to make sure of is that you do this AFTER you receive the application. BEFORE you receive the application, you highlight that the worst thing that can happen is they leave with a free action plan on what they need to do get into a position to buy. AFTER the application, you make sure they understand the pain points of their application in a way that makes them respect you as an authority figure while still feeling enough discomfort to not want to go through it with anybody else.
Want More Help With Mortgage Lead Conversion or Generating More Leads?
We build fully automated lead generation platforms for loan officers so that they can focus on what makes them more money: building relationships and converting leads. Too many loan officers have taken too active of an approach to online lead generation, leaving them with a lopsided schedule that will never result in them becoming a top producer. We believe that the best-case scenario for your business/growth is for you to have a steady stream of leads that you don’t even need to think about coming in at a scalable cost, an automated system or process to reach out to those leads on your behalf, and then for you to focus your attention on converting those that respond while spending the rest of your time broadcasting your amazing consumer-direct pre-approval generating machine to your agent friends. Do this right, and you can design the mortgage business of your dreams.
This blog is dedicated to helping you have the pieces you need to do this right. Ultimately though, if you’re doing it right from the beginning, you book a strategy session with us right away and see if the company that will do it all for you is a good fit. If you’re ready to see if that’s the case, book a consultation at the link below:
If you’re not quite there and want to learn more about what we do or how you can do this all for yourself, be sure to check out the rest of our blog at www.empowerfunnels.com/blog
We even have a FREE 3 Step Guide that you can use to start generating your own leads with Google Ads. Our average cost per lead with the system I teach in this guide is between $8-9. What would the ability to get high-quality long-form leads for less than 10 bucks a piece do for your business? Find out by downloading our FREE 3 Step Guide at the link below.
As always, thanks for reading and I’ll see you at the top!