Rethinking lead generation for a post-pandemic world

As margins tighten, text messaging has taken on new importance in mortgage customer prospecting, with some lenders even using it as a method for distributing videos that aim to educate and entice consumers.

But whether more traditional contact methods, such as direct mail, are effective in the post-pandemic environment remains a question heavily debated among lenders as they face the prospect of having to put more effort and dollars into lead generation in 2022.

Originations are expected to significantly decline in 2022 and as refinances dry up, lenders are likely to return to tactics they largely haven’t had to deploy since the spring of 2020.

"With less business falling in the door comes the need to hunt for business and that's not something that the industry has seen now for at least a year and a half," said Grant Moon, a mortgage industrylead generation expert and the former CEO of Home Captain.

But originators are also all going after the same customers, looking to keep volume up. A long incubation cycle exists for the leads that do exist and the risk of fallout is high. That is only exacerbated by gain on sale margin compression cutting profitability.

Still, consumers are now more willing to fill out online contact forms, albeit with some hesitation because of the resulting robo calls, Moon said. "That being said, people will still need to be speaking to lenders, people will still be getting quotes for mortgages," Moon said. "And because of that, there will be a lot of consumers that are looking for the convenience of filling out forms online, doing comparisons online for mortgages."

Lenders need to focus their marketing efforts online, including on social media sites like Facebook, Instagram and TikTok, to reach consumers, said Josh Friend CEO of customer relationship management software provider Insellerate.

"We have some lenders that are doing some extremely sophisticated marketing techniques online digitally, that are very powerful and so it's starting to change," said Friend.

Originators, he continued, need to practice customer engagement with intent: reaching out when the consumer starts to show any signs that they’re early in the process of looking for a house or if they are rate shopping or considering taking out equity.

In the past, the borrower, even a past client, contacted the lender first.

"The new way is really understanding buyer behavior, understanding market engagement early on [and] understanding long-term engagement," Friend said. Lenders already have past customer's information. So the next phase is to keep them engaged after their loan closes.

"What things can you give to them as time goes on of value?" Friend said. "Can you give them a home value report?" This makes the lender “front and center when a consumer wants a new loan.”

But a mindset shift still needs to be made. "Consumers expect that ability to communicate and interact with you on their terms and time and lenders just don't do that," Friend said, pointing to data from the Insellerate 2021 Comprehensive MBA Contact study that shows just 11% of them use text messaging to contact borrowers after they inquired about a mortgage.

More discouraging is the finding that 40% of respondents admitted to never responding to a customer inquiry. While 18% responded within 5 minutes to a request, nearly 25% said it could be as long as a day.

While the pandemic and refinance boom are really separate phenomena, it's hard to know which one is causing which consumer behavior, said Nick Belenky, chief revenue officer for Top of Mind, which offers customer relationship management system Surefire and is now owned by Black Knight.

Lenders are "looking for ways that they can influence borrowers to interact with their websites, interact with him socially, through social posts and are looking for sources of content," Belenky said. So Surefire is creating social content for its clients to help them deal with what it calls the "refi boom recovery."

But that is not enough. Counter to prepandemic research indicating diminished influence for direct mail, Surefire is creating omnichannel marketing pieces such as direct mail to enhance contact. Consumers are getting inundated by email, especially now that many people are working from home, Belenky said.

As part of the omnichannel experience, "we're being asked to deliver physical — physical closing gifts, physical postcards for lead generation in addition to mobile outreach.

"They're at home working and getting physical mail in a location that is the same place where their decisions are made," Belenky said. "So sending physical goods to the home just becomes more effective when people are in the home more of their day."

Those mailings work in tandem with text messaging video, about, for example, someone's milestone in their home purchase journey, Belenky said.

Big Purple Dot recently added SMS/MMS video marketing into its CRM lead management platform.

The pandemic meant originators had to "not only conduct business in a virtual way, but also they needed to stay connected with the borrowers with no interaction," CEO Roxana Davidoff said.

Unlike Belenky, Davidoff sees physical pieces as a casualty of the pandemic. "They were so fixated on mailers but overnight because no one wanted to handle anything coming from the mail right due to contamination, that all changed," she said. "Because no one wanted to handle anything anymore, we had to find a more creative way to interact and connect with borrowers."

Consumers are expecting a seamless experience in getting a mortgage, one they can do from the comfort of their home.

"We're seeing more and more lenders leverage the marketing that combines SMS, MMS, AI, customized text and multimedia messaging with what Big Purple Dot does, video," Davidoff said. "So all of those things now have kind of pushed this industry forward as it relates to the communication and the way that we communicate with the borrowers."

And that led to adding video to text messages. Users are creating personalized messaging in those videos to make the connection with the prospect.

"It's much more pointed to the borrower and what their specific needs and wants are," Davidoff said. "We're trying to connect with them because we can't connect with them in person."

Leaving a voicemail message is not going to work, she said. If anything, many people have stopped checking their voicemail, especially if it appears to come from a mass marketing blast. They would rather have that text message.

"People want things now, they want it to be personalized and they want it to connect with them," Davidoff said. "If it doesn't connect with them, if it's not personalized, they don't want it."