WE’RE HEARING some interest in our column from last week regarding how to
Others I speak to are concerned that leveraging advanced data techniques puts you in the same business as other aggressive companies, and is an opportunity limited only to the consumer direct players. So, this week’s column is about why this works for retail lenders and why it works well even when the big consumer direct lenders may be using the same techniques to battle for the same “in the market” consumers.
First of all, let’s cover the retail issue. This one is pretty easy to address. If you are a retail executive, ask your loan officers if they would like their customers to call them every time they were thinking about a new loan, or were about to list their old home, or if their home value went up, or if their interest was still above 5% and their FICO was above the minimum for your refinance program.
The answer is obvious. Of course the LO wants the customer to call them if any of these events occur, and many LO’s and retail companies employ relationship campaigns that are designed for just this purpose: to remind the consumer that the retail officer is still available to help with that next loan.
But despite this relationship marketing, consumers sometimes start taking actions on a new loan, or on buying their next home without telling the loan officer first. In fact, recent research shows that 80% of homebuyers start their search on the internet, so they are out in the wild world wide web instead of calling the LO directly.
For the retail mortgage company that paid origination expense to get that last deal, it’s a shame for the customer to be back in play without making a pitch to do the next deal too.
So, if the LO and the retail company definitely want the customer to call them on their next loan, then the next question is whether the LO is willing to make an outbound call to the customer if they believed there was a good chance that the customer needed a new loan.
I think most LOs would do it, and most would be successful if the data mining was done well, the campaign was designed well, and the value proposition was good. That is what the advanced marketing techniques give you—the ability to leverage data to find the right customer and get the LO to make that call at the right time.
Now, here is the best part. The retail company that originated the loan has a BIG advantage compared to the consumer direct lenders who may be mining the same sort of data to try and convert the customer. And that advantage IS the phone number.
The reality of new customer prospect marketing (“prospects” are defined as consumers who do NOT have an existing relationship with the lender) is that the marketer who acquires the lead via database techniques typically does NOT have a good phone number to reach the customer.
In fact, our experience with clients is that 85% of acquired prospect leads do NOT have an identified phone number, or are on the “do-not-call” list.
The growth of cell phones has only added to the challenge. However, if you use the advanced techniques to find your former customer who is in the market and then supplement that data with other data elements available within your mortgage origination or servicing systems or from available data marts, you likely already have the phone number and maybe even have the email address.
And if you call them, the customer may recognize the number and pick up the phone. So, while the big consumer direct guys may be chasing that same borrower, you should feel confident making that phone call and having a good shot to convert that lead.
And if the customer knows you well, perhaps having worked with you in the past, or perhaps they are a bank customer who did not get a mortgage with you but you still have their information, then you have a decent chance of getting them to answer the phone and give you another shot at selling them a loan. Many of your competitors are digging through public records and other data files in an effort to find leads, but since you have the existing relationship with customer, you’ll be in a better position, even if they do get lucky and find a phone number for the customer.
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.
