One door closes, another opens
Nat Daniels explains how brokers can maximise their conversion rates and looks at the role of lead generation firms
Nat Daniels is managing director of Mortgage Angels
Brokers must look at all possible methods of attracting new business if they are to retain and grow their margins. This goes for any business whatever its size. However, larger brokerages may take a different approach to growing their businesses than smaller operations. The big boys have the advantage of scale where the strength of their brand and the back up of a marketing department allows them to generate business from a variety of areas. This strength in depth, and pocket, is obviously out of reach for firms or brokers that only employ a couple of advisers and do not have access to limitless advertising budgets.
Proving its worth
For the smaller player, word of mouth referrals are important, but often this is not enough to sustain never mind grow a business and so they seek help elsewhere. This is when the lead generation sector proves its worth – especially now the change in the rules regarding cold-calling has cut off one potential avenue to new customers.
But where one door closes, another opens. With close to two-thirds of adults now having access to a computer at home, potential mortgage applicants are more likely to use the internet to research their options. Therefore purchasing online leads is an effective way of capitalising on the relatively new market created by an increasingly technology-savvy public. Essentially, internet leads create a conversation opportunity with a potential customer. Financial Services Authority (FSA) regulation permits an introduction to be made by an unauthorised company but full qualification of that lead is not permitted, as this would be a regulated activity and most of these firms act as introducers only. Many more mortgage intermediaries are now realising the power of a mortgage lead generator to boost their bottom line. This is all possible without rejection-filled cold-calling, or buying expensive advertisements, or thousands of pounds drilled into media advertising and no direct mail campaign costing you a fortune.
At the same time there has been a revolution in lead sales generation. This revolution has been driven by the web and means hot leads can now be delivered to intermediaries in real-time. It is vitally important for a lead generator to have a system in place that provides an immediate response, and the adviser receiving the lead must make contact as soon as possible to maximise conversion potential. A lead is just that – an introduction to an applicant who may want a mortgage or related product. Brokers still have a fair amount of work to do if they are to successfully convert the lead – the case is not handed to them on a plate.
It’s vital to contact the leads as soon as they are received to maximise the chances of conversion. Leave a lead for longer than a few hours and it goes cold and you risk losing the business. Even if you can’t get hold of the potential client at first, second or even third attempt, persevere. You are being presented with people that have already indicated that they want to be contacted and are receptive about the products you are attempting to sell them. They have specifically requested information on your range of products. Some brokers sit on leads until they have gone cold before making the initial follow-up call, vastly reducing the chances of closing down the lead and generating some cash for themselves.
Working smarter
The larger lead generation companies are becoming more sophisticated in their approach. By working smarter they are improving the overall quality of the leads they generate and the overall service they provide. It’s about continual improvement as in any other sector, and the fact that in business, if you stand still, you invariably find yourself going backwards.
However, brokers must judge lead generation firms realistically. For example, if a broker takes an advertisement on a consumer website they know that they are likely to get a mixed bag of leads – some very good ones, some average ones and, of course, some poor ones that never convert into profitable business. But as long as the broker gets a good overall return on investment he will be happy with the marketing exercise. Therefore, brokers that buy leads from professional lead generation firms shouldn’t expect every lead to be a winner but rather a reasonable percentage in order to make the initiative profitable.
It is therefore a challenge for the lead generation industry as a whole to manage perceptions in this respect so that we are all judged on a level playing field with regard to other new business channels. At the end of the day we are all willing to be accountable and welcome the opportunity to demonstrate the financial benefits of what we do. Many of the established lead generation experts are performing well, even though I do expect some sector consolidation.
Making thorough checks
Care should be taken when sourcing lead generators. For brokers to be confident about the lead generation companies they employ, they should check thoroughly every aspect of the arrangement including references, guarantees, penalties, break clauses, charges, payment terms and more. In particular, from the point of view of compliance with FSA rules, they must be aware of lead generation suppliers that are based offshore who might try to avoid the cold-calling ban. Mind you, it often seems like it is only the bad experiences that get reported. People don’t go running to the press with good news stories when a service works as it is supposed to.
There are, of course, alternatives to using a lead generator. Some brokers prefer to set up an in-house lead generation process through their own websites. Others are increasingly turning to public relations to raise their profile, enhance their reputation and ultimately to generate consumer leads. Strict FSA regulation of cold-calling and advertising has led to increased interest in and use of PR, which is not regulated in the same way and allows much more flexibility. If you decide to try and generate business through your own website, it is important to make sure it looks professional and is effective in its functionality. Ensure the designers of the website are experts in search engine optimisation, or you could end up with a great looking website but no leads. It stands to reason that if you want to attract new customers, you should have the best shop window in the virtual street. Your online presence says a lot about the way you do business. Having a shoddy web-presence reflects badly on the firm and will put potential customers off using your services. Having said that, simply having a website does not mean you will automatically generate traffic. Prospective customers have to see your website and with hundreds of thousands of websites out there all vying for attention this isn’t an easy thing to accomplish. With all websites, content is king.
Having a presence
Another popular way of finding information on the web is through the use of directories and it is important that intermediaries with a web presence are listed on such sites. Most lead generation firms have a directory of advisers. In short each adviser gets a page on the site – a directory listing. The more innovative and advanced firms are now looking at developing a blog capability that will compliment the adviser’s listing. But advisers still need to be on the phone following up on a lead the second they get it.
Lead generation firms are constantly looking at innovative ways to provide their services to brokers in a way that provides fresh, qualified leads. What is certain is that online lead generation firms seem set to play a bigger role within mortgage marketing process as competition for business increases between mortgage intermediaries.
The quality of leads supplied to the broker is also set to improve through a combination of new technology and fewer, but more effective and efficient lead generation firms. Tight margins will see the lead generation market contract, forcing out those firms that are not providing a good service to the broker. This will leave the innovative and customer-focused lead generation firms in pole position to serve the intermediary by delivering hot leads in real-time that will help sustain and grow their business.
How to increase mortgage conversion rates
By Steve Baker, Openwork Mortgage Development Director
Given that obtaining mortgage leads can be a time consuming and costly process, making the most of the leads you have is essential. Although a 100% conversion rate is impossible to achieve, due not least to many external factors, what steps can brokers take to improve their conversion rates?
Where brokers’ leads originate from will inevitably have a bearing on typical conversion rates. Out of the four main sources of leads; existing clients, referrals, estate agencies and lead generators, existing clients typically prove easier to convert than cold leads. Although lead origination will have an impact on conversion, the key to successful conversion is what happens once the lead is obtained.
Qualification is the most important element of the conversion process, getting this right can save considerable time and money. Pre-qualification over the phone or via email is a good idea to ensure you don’t waste time visiting clients who will ultimately fall by the wayside. Taking pre-qualification a step further by asking clients to complete credit checks prior to initial mortgage meetings can also pay dividends. Any problems that exist are highlighted up front, enabling brokers to spend time searching for the most appropriate products.
Qualification also gives brokers a good understanding of client’s needs and whether any cross selling opportunities exist. If you are looking to maximise every mortgage sale there are certain types of business where protection and general insurance are fairly easy to sell. Buy to Let and heavy sub-prime tend to offer less cross selling opportunities, but the proc fees are usually higher, and with Buy to Let in particular the opportunities for repeat business can be good.
Another important aspect of converting leads is the level of knowledge and confidence you display. Your clients need to know you understand them and their situation. The only way to do this is to understand lenders, their products and the market. A key point to be aware of is lenders’ service performance. Securing the cheapest deal for your client isn’t much use if their house sale falls through because the mortgage was delayed. Alongside this, being aware of less obvious fees, such as exit fees will instill confidence. Not only will this improve your conversion rate with current clients it should also improve referral rates.
At Openwork, the scale of the network and the way we operate has enabled us to have real influence over the lenders we deal with, ensuring that products and fees are competitive and service issues are quickly resolved. The structure of our panel also enables advisers to see very quickly who is performing well.
As well as lender service being key, good broker service is also essential. Ensure you are available if your client needs to talk and return phone calls or emails promptly – remember clients can change their mortgage every couple of years. Thus not only does every client present the opportunity of years of repeat business, but the better the service the more referrals you will receive as a result.
Although much of this is obvious it is amazing how many advisers fail to follow these simple rules, meaning they are losing valuable business. The above points make good business sense and they also ensure a better service for clients.
How to increase broker conversion rates
By
Jon O Brien, Operations Director,
Professional Mortgage Packagers Alliance (PMPA)
One obvious solution to increasing conversion rates is for mortgage brokers to acquire the skill of submitting the perfect application every time. The problem is that no such thing as the perfect application exists, because each mortgage application is different and every borrower’s needs are unique. The real skill in increasing the success rate of applications is to understand that each individual borrower’s needs are different and then to make an accurate analysis of the applicant’s information and set it out correctly so that the lender can issue an offer.
The basic requirement for an application to complete successfully is that there must be full collection and drawing together of the customer’s information. This can only be done if the customer is questioned correctly and carefully by the adviser. However, to be able to get full and correct information, the following methods should be adhered to. First, find ways to put customers at their ease – customers should not feel uncomfortable giving truthful and full information about themselves. This is especially true of customers with some adverse credit history that they may feel embarrassed about mentioning – not realising that this information is available on credit databases and will be discovered anyway. People often feel more at ease when they realise how many others are in the same boat – so having a few facts and figures about the size and growth of the sub prime mortgage market at your fingertips might provide some reassurance.
In addition, those brokers that want to improve their completion ratios should make sure that they have good technology links in order to get accurate credit and payment information, together with access to good links with lenders so that they can get binding decisions in principle, rather than those that require additional information to be provided. Often these communication benefits can be obtained by using a packager, which is beneficial to smaller broker firms that do not have enough critical mass to invest in such solutions themselves. A broker also needs good management skills to coordinate the five parties involved: customer, packager (if used), lender, solicitor, and valuer, to increase success rates.
Packagers can play an important role in increasing conversion rates. First, they specialise in complicated mortgage cases – those that are not straight forward and could potentially take up a lot of time and still not result in a procuration fee. Because packagers have more experience of handling problematic cases they can often find a solution very quickly. In this way packagers are the conduits though which customers with the right circumstances get linked to the lender with the criteria to meet their needs.
An application also needs “perfect placement” in order to convert successfully and quickly, which means the broker needs not only to have a proper understanding of lender products and criteria, but also access to the most appropriate product. Here, packagers can often be the only route to the niche, non conforming or sub prime product that is the right solution for the case.







