Track 2 – Will LOs or Marketing Spend Deliver More Customers in 2024?

TRACK SPONSORED BY:  Clever

Our industry has mostly relied on loan officer (LO) sales to acquire, nurture, and close new customers, but does this remain relevant as customers increasingly begin journeys digitally and self-serve? Sales vs. marketing models both have strengths. Highly paid LOs are proven from acquisition through closing. Smart marketing can acquire customers at scale, but conversion can add more cost later. Are sales and marketing models converging? How do you optimize for both? Don't miss the debate on all these nuances!

Transcription:

Luke Babich (00:06):

All right everyone, as you're getting settled in, I have the pleasure of introducing today's panel. I'm Luke Babich Co-Founder and CEO of Clever Pro, who's got the pleasure of sponsoring today's track, and I'm really excited about this session. We've got a really big question on the table. Will LOs or marketing spend deliver more customers in 2024? By show of hands? Is it LOs? Alright, hands down. By show of hands, is it marketing spend? Oh, we've got an evenly divided room. Okay, well there you go folks. Well, we will call off the rest of the session. You've got your answer. No, I'm kidding. We've got a really awesome lineup of folks here who can provide a 360 view on this exact question. To introduce them, Steven Cooley, CEO of Mortgage Advisor Tools.

(00:57)

We've got Khris Dhokia, SVP of Marketing and Business Development for Kind Lending. Yeah, clap for that guy. Alec Hanson, CMO of LoanDepot. And then we have Jessica Manna, CMO of Go Mortgage. Folks, really excited to dive into this question. It's one that's very near and dear to our hearts. We're on the conversion optimization side of people who are investing a lot in marketing, but obviously all of this comes back to the thing that drives growth for any real estate or lending business, which is customer acquisition costs. Can you solve that in a scalable way? And as the market has shifted, these folks are going to shed light for what that means for your business next year. With that, I'll let you all take it away.

Steven Cooley (01:51):

Very cool. Alright, good afternoon. How is everyone this afternoon? Everybody doing okay? Alright.

Jessica Manna (02:03):

Thank you for choosing us over the happy hour you guys.

Steven Cooley (02:05):

Yeah, no drinks in here or anything. It's something else. All right, cool. I appreciate you guys showing up. I think that this is quite arguably one of the most incredible marketing panels ever assembled anywhere, quite frankly. So I hope you enjoy this topic today. It's quite a polarizing topic to say the least, right? I mean, you're almost making a bit of a decision. The room was split. And what's really interesting I think about this panel is everybody comes from a pretty diverse group of lenders. And so where we're going to start today I think is we're going to define marketing. And the last thing I forgot, and I got say, if marketing spend is a trillion dollars, it almost makes no difference because at the end of the day, you still need to sell the loan, right? So nonetheless, it's pretty interesting stuff. But yeah, let's start there. If guys, if we could each define marketing, whether it's generally in the mortgage industry or in your organization, I think that'd be a great place for us to kick this off. Jess, you're first?

Jessica Manna (03:10):

Sure.

Steven Cooley (03:10):

Alright.

Jessica Manna (03:11):

So I'll do both. In our business, it's a little bit of everything because we have some wholesale, some consumer direct and some retail. So what marketing means in each of those is pretty different. And consumer direct, it's a lot of legion and automation and things like that. In retail, it's quite a bit of street support and a growing amount of leads and automation for them as well. That's been a huge pickup and a huge trend. And then out there in the general marketplace, I think it probably follows that as well, that there's a lot of lead generation and lead conversion optimization spend out there in addition to the retail support.

Alec Hanson (03:58):

You want me to go next?

Steven Cooley (03:59):

Yeah, let's do it down the line.

Alec Hanson (04:01):

Well, I'm a dumb sales guy. I spent 22 years of my 22 years and five months in sales and mortgage. And so for me, marketing is what makes the phone ring at the bottom the of the day simplistically. Now, as you level that up, I think marketing's about storytelling. I think marketing's about human connection. I think marketing's the thing that starts to bridge the gap between somebody's awareness to making a decision to engage. But at the end of the day, I think you can judge the success by that, by customer satisfaction and the customers that are choosing to work with you over somebody else. So again, a little simplistic because I'm a stupid sales guy, but that's kind of how I measure it at the end of the day.

Krish Dhokia (04:36):

I love that. I mean, I wish I'd done before you but you're right. It's about whatever, whether it's graphic content, whatever, creating that opportunity for authenticity to the consumer, whoever the consumer is, right? And when I say that, because we are that kind TPO retail joint ventures, so you've referral sources if you will in B2B, B2C, B2C, a lot of but at the end of the day, if what you're creating isn't resonating with them and being delivered to them when they need to see it the most, that's what marketing is to us.

Jessica Manna (05:18):

Yeah.

Steven Cooley (05:18):

A variety of business models in the mortgage industry. I think what this topic really drives is direct to consumer, the keys in the future, or is it network referral based business? And do we need to double down there? And so if we could, I mean, do we think loan officers are going to become order takers you think? Or do people, or if that's the case, do we need to start double doubting on direct to consumer, we'll start with Krish.

Krish Dhokia (05:56):

Thanks. That's one time I didn't want to go first.

Steven Cooley (05:59):

Well, you're the best to go first.

Krish Dhokia (06:03):

I feel like you can turn them into order takers, but to me, I think the success really is, again, like you said, you can have a trillion dollars spend without the loan officer. What I said about authenticity, people want people, people want to buy, especially now, especially at a time where people are confused about rates and the media around rates and just all the negativity. They want trust and they want to build it with a human being. Now that doesn't mean that they have to be standing in front of them, right? Every originator can originate in the entire state or more, but there has to be an opportunity to create just human connection. And so you could spend all of the money in the world to make it look and feel natural, but I think at the end of the day, it is boosting the ground, real people doing real deals.

Alec Hanson (07:06):

I think there's a healthy tension in our industry between, I mean obviously consumers like us, we love big brands because all I have to do is talk about Amazon and every single one of you probably has packages showing up to your house every day, and there's no human connection there at all. In fact, we're actually killing human connection if you want to argue, the local hardware stores being destroyed by our efforts on Amazon. And yet at the same time, we're in this war for attention with customers and with ourselves and for each other. We're in this massive war. And I think that their strengths on both sides. I have a long background in retail sales, and the retail sales loan officer or the local professional can do things that a big brand, they can be in the gyms and the charities and the churches where humans are having community and big brands have a struggle to come in there and humanize themselves.

(07:51)

And we've learning really quickly in this market that mortgages are really hard to commodify. Some of our biggest brands in lending have tried to commodify mortgages for decades, and yet we find now that majority of purchase businesses still being done by local professionals. And so you start realizing, well, why? Where's the complexity? What's the humanity in there? And so there is a healthy tension in there. And plus in the last several years, I don't know if you've noticed this, but local originators are waking up and they're getting digital and they're starting to build personal branding efforts that are real and making impact. Some have scaled to some pretty big heights personally and are getting leads across the country. So I think there's going to be a continued fight for attention, continued fight for supremacy, so to speak. But I actually think at the end of the day, personal loan officer branding and mega corporation branding or large scale branding are going to find a way to work together and they're going to be symbiotic and they're going to help each other. And so we'll see how that plays out. But that's kind of where my crystal ball.

Jessica Manna (08:51):

And I think it's How far into the future are you looking? Right. I got my Tesla on an app and how long ago did we think that was or wasn't possible? Right? I switched banks in 2008 because this one had a good iPhone app and this one didn't have one at all. You talk about Amazon. So it's really what's the time horizon that we're talking about? And I think the challenge that customers, the growing segment of customers, they want to do business in a low friction way, is that technology hasn't been there to enable it. At some point that Nexus is going to hit and the technology will be there to enable it. That day is coming for all industries and it's coming faster every year or at this point, every couple of months.

Alec Hanson (09:39):

Can I add one more thing? Because you just totally triggered me.

Jessica Manna (09:42):

I want to go back to your first answer.

Alec Hanson (09:46):

I get a chance to talk to our retail originators for new hire orientation every month. And one of the things I challenge them on is this concept of what's your job? And a lot of time local originators think their job is chasing paper and organizing files and file structure and deal structure. And I kind of argue and throw a little bit of friction against them saying, I think technology's going to come in and take your job. If that's your job, I think it's going to start to start reading paperwork. It's going to start auto filing documents, it's going to start underwriting, it's going to start making the credit decisions. That's just my belief in my lifetime. I think we'll see it. So your job as a local originator is more like get someone to call you. Let's go back to marketing 101. If no one calls you, it's really hard to be a loan officer. And then secondarily, your job is to provide your own wisdom to help somebody make one of the biggest decisions of their life, which is their largest debt they're going to pick up. And I always throw this analogy back because I survived the last crisis, so I'm trying to come through this one. People made decisions in the last financial crisis that devastated their families financially for a decade plus. Is that fair?

(10:50)

And so what if there was another voice there that said, Hey, maybe do this instead of this. And that's the impact somebody can have with the right moment, with the right financial knowledge, with the right empathy to help guide somebody. And that's where I think their job really lies. It's not in the paperwork. And so you're right, I think technology's going to come through and it's going to change everyone's jobs. I don't think people will become order takers anymore, but I think they still have to make the phone ring or else they'll find themselves working in a call center that can make the ring phone ring. And I think they're going to provide their wisdom to somebody to help make 'em make a great decision.

Jessica Manna (11:20):

And that's the exciting thing about what's happening in the personal branding space today, because LOs didn't think that way three years ago or five years ago, but they're really waking up to that. Now, there are some people who do good podcasts and things like that.

(11:35)

I don't know anything. I don't consent to use my content, but they are becoming marketers. They're becoming savvy on leads and delivering the lead to the agent first and being savvier about being on social media. And what a soapbox you have when you can talk to a thousand people instead of driving 45 minutes to a BNI and just being in front of five people and getting five business cards. You can really be your digital mayor in your backyard. And that's really changing things.

Steven Cooley (12:03):

So I think a couple places I think that would be interesting to go.

(12:09)

I Consulted every size lender over the last four or five years, and this strategy I think is paramount, like personal branding and whatnot. And what do you do though when you have only one out of the 20 loan officers or five out of the 50 or whatnot that are actually willing to take a simple social media strategy of any kind and apply it to their business? How can we adequately facilitate some of this when really only a very minute percent has the audacity to be on camera or even engage in any kind of social media strategy at all?

Krish Dhokia (12:49):

Well, I mean, social media is not for everyone, right? Alec is a beautiful person and he has podcasts. But the one thing that I know it's something out there that I thought was incredible. And he had built a coaching platform or program, and it all goes back to what the enterprise is willing to support each individual loan officer to do. Now, whether it's a retention plan, whether it's whatever the purpose is, obviously it's drive more volume, but we have a saying, I won't say who said this, but everyone has to have skin in the game. Loan officers have to have skin in the game. And if they're not realizing that they need to participate or if they're reluctant to participate, you have to sell it to internal marketing is selling it. Your coaching team, your HR training, everyone is selling the internal team something else. And so there's shaming works.

Alec Hanson (13:54):

strong strategy, start there.

Krish Dhokia (13:57):

But the internal competition, right? Hey, if you want to do the 10 million a month origination, that person's doing, this is what they're doing.

(14:06)

Some people just aren't cut out to be salespeople. And we know that. We've seen some numbers out there right now where there's loan officers leaving the industry in droves, but the personal branding pieces them and the enterprise has their own branding and you're basically their support mechanism. And I think that there's so many deliverables out there and tactics out there. So what if they don't want to show their face? We know there's loan offices out there that are faceless on social media and on the loan officer pages, but there is something that will work for them, and you have to help meet that need.

Alec Hanson (14:46):

I remember in the glory days when we had Nokia phones and MapQuest pronounce, and thank God I'm one generation above the Thomas guide, that thing looked terrible. But literally, I had to go find open houses and meet agents face-to-face with MapQuest NCE from this house to this house and an OIA phone. And I used to talk to loan officers, said, I hate going and talking to realtors. They're the worst. They're the worst. And I said, well, then you're not going to be very successful where the most opportunity lies. And they're like, well, I want to go after divorce attorneys and CPAs. And I'm like, that's great, but they don't need you, realtors. They need financing for a lot of transactions. They're going to need you. And for a lot of loan officers, they couldn't do it because I remember I was my first time going to an open house at 23, I had hair here and not here, and I had a crappy suit on with shoulder pads. And I was driving my Honda Civic from college, and I drove up and I looked in and there was the best realtor in Orange County. And I was so nervous because I'm an introvert and I'm terrified of rejection and I'm insecure. And so there they are. And I turned on jock jams and I just got all pumped up, ready to go, make it happen. And I drove away.

Steven Cooley (15:52):

Oh my God.

Alec Hanson (15:52):

Drove away. I drove away from the open house. I was so terrified of getting rejected by this guy who didn't even know I was there. And I remember telling and coaching loan officers, if you want to make an impact, you have to have a lot of people that know you have to build relationships. You have to put yourself out there. You have to be vulnerable. You have to find the opportunity and you'll get there. I think in social media and video, it's the same thing today. I'm sorry it's different. I'm sorry. But it's the same vulnerability. It's the same insecurity, it's the same fear that you're going to look dumb, say something dumb. And in my opinion, you're limiting yourself and your ability to achieve the success you're capable of if you refuse to put yourself out there to influence the people you're trying to influence. And you have to go back to the core of what your job is. If your job is to help people, then go help them. If you're getting in your own way, you got to get out of your own way and really go back to the foundation of why you're in this industry and go help them.

Jessica Manna (16:47):

And I think the majority can actually do it if you de fractionalize it, right? Where they have a hard time is like, how do I log into my Facebook account? Right? Totally. Where they have a hard time is, oh my gosh, what is cap cut? But if you can take the friction out of it, they talk to people all day long, whereas a marketer has never done alone minus one, right? For the most part, a marketer struggles with what kind of content to create that's actually relevant, but they know this. They know what calls they got that day. What was somebody confused about what went wrong in a deal? What are the problems? All of that is content, content, content, content. So if you can take the friction out of it, unless they have just a philosophical problem with social media, which there is that contingent, and I even got one of them on board, they can do it with just taking the friction out of the process for them.

Alec Hanson (17:40):

Great comment.

Steven Cooley (17:40):

No, I love that. There's a convenience in doing a consultancy where you get to do this evaluation and say, Hey, you need to, shit can 40% of your folks, they're never showing up for this. So how does marketing work with the business entity to also navigate the strategy of whether to invest in more direct and to go, look, I can't get X percent to invest in forget social media. Like, hey, maybe they were incredible direct mailers at one point in their career, but they're not even activating that anymore. Or personal handwritten letters, whatever it was, whatever legacy marketing, God, just do something, right? I mean, we've all had this experience, but how do you at the level you're at within the business dealing with business owners, help them develop the strategy and work around and give the bad news? Sometimes even?

Krish Dhokia (18:41):

I personally think it's gotten so much easier over the years. There was a day and age where we were having to download things and marry it and make sense of it all and reading data ourselves, which was always fun. But now we're able to tell that story whether it's an adoption story, there's an ROI story in a lot of tech stack or technology tools today, and we're able to tell that story to our executive leadership, to our sales leadership, and we're able to have that trickle down effect. And again, it's gotten a lot easier as an industry. We were slow to adapt.

(19:18)

When I got in eight, nine years ago, it seems like a hundred years ago as far as how quick things have changed and how much has been available. And I expect there to be more. But the other part of this is then empowering the leaders to take that data and to take those reports, if you will, and train from that. We now know people don't like to log in and like you said, get rid of the friction and know who's going to be able to deliver that message. And so marketing I think is one of the most vital roles because we take all that data, we do something with it. A lot of people just sit on it.

Jessica Manna (20:08):

I think it's a really solid partnership between your head of sales and your head of marketing, right?

Steven Cooley (20:13):

Absolutely.

Jessica Manna (20:14):

You get just like a standard stack of tools, which is you have people that can influence solid producers who are going to adopt and influence. You have production, you have just requirements. Your head of sales might say, Hey, if your production is under X, you're getting on board with pick whatever your solution is, whether it's personal branding or mortgage coach or this or that, but you got to pick something and you got to do something. Or you bring new people into the business and they're going to just jump on whatever it is that you've got, you tell them. And so I think you've got a couple of strategies there, but I do think it's a solid partnership between leadership.

Alec Hanson (20:56):

Yeah, I could not agree more. And I'd also, the more you can lead from the front, in my opinion, the more you can help people get in the same boat, in the same water. And I was in the sales side of the organization, I started a podcast. I felt like if I didn't, I knew how to prospect realtors really well. I knew how to set appointments, I knew how to go in and convert that stuff and set up business media. I could do all that. But in the digital age, I wasn't using social media for a tool for human connection. I was using it for cat memes and political rants. Wasn't using podcasting was what the hell? Who cares about that? Who's going to listen to that? And so I think that one of the best things we can do is we can get in the water with them.

(21:37)

So I started a podcast. I started social media. I did a hundred videos in a hundred days. I didn't know what the heck I was doing. I still don't, the only reason I think I'm the CMO now is I put videos on the internet. That's my joke. It's probably true. But I think that that gave me the chance to come down to everyone's level and say, oh yeah, no, I know what this is. Let me talk about it. I did this. I felt just as uncomfortable as you're feeling right now. I know exactly what you're going through and that helped me. I'm learning cap cut right next to you. What the hell's this? Okay, I can make a video. Let's get on TikTok and dance. I don't know. Is that what you do? So I found that it really helps me as a marketer now also get down to the street level and be like, let's go do it together. Let's film this together. Let's talk about this. And I think that's going to help any leader out there.

Krish Dhokia (22:19):

I did want to add one good piece podcast was talking a lot of podcasts. I got a podcast and it's so nerve wracking, right? But podcasts and LinkedIn newsletters are the two hottest things going right now on it for marketers. I mean, it's huge. And whether you got something to say or not say it, because I think that whether you're spending and boosting and doing all of these things, there's a lot of organic things out there the LOs can be doing to build. And I think one of the biggest opportunities right now for a loan officers for thousands that are out there is to be able to change the narrative that's happening around the economy, around mortgage, around rates, to control the narrative and to actually educate versus fear-mongering. And so now is most opportunistic time to participate. And so we're telling our loan offices that, and guess what? Still push back, right? Believe it or not. So we're shaving them, but it is such a crazy time in the industry, but such a good time to do it.

Steven Cooley (23:33):

I think shame is a perfectly fine motivator. Absolutely keys to the kingdom. No.

(23:44)

So we are Here at Digital Mortgage Conference, so it'd probably be fair for us to talk about technology a little bit. This is in my experience, budget season for most mortgage lenders. Everyone's trying to figure out how exactly to cut the pie and what to invest in, what to get rid of. And so let's ask you guys what would be a couple pieces of technology that, and you could speak broadly about the category. Maybe you don't have to necessarily, if you want to speak about a company specifically, God bless. But what are some technology pieces that you guys are looking to invest? We could ask the polarizing question, what are you looking to cut out and never use ever again, but we won't. We'll be nice to everybody, but now what's a couple pieces of technology that broadly that you're looking to bring into your company to support it and marketing?

Jessica Manna (24:37):

Go ahead. I mean, I think everybody's looking for things that are going to reduce concessions, increase conversion, help to cut costs. I mean, it's all about, at least in this moment, it's really a lot about trying to fine tune ROI and deliver more value. So I think we're all looking at our stacks going, this was great tech in 2021, but is it really delivering the value? So I think that's the mentality.

Alec Hanson (25:10):

Yeah. Loan officers will tell you they just won't use it. And so just pay attention to what's going on. So from what technology would be dumping part?

Steven Cooley (25:20):

Yeah, sure.

Alec Hanson (25:21):

Just paying attention. They're not logging in and they're not using it and there's a reason they're not using it. And you might say, well, we can just train them on it and double down and maybe that will move the needle. But oftentimes I find if they're not dump, they're smart, they want to make money, they want to win, they want to help people. So they're going to use tools that drive that needle. But in terms of the technology we're delivering into and to kind of where we're going to go, it's in my opinion right now, it's about finding customers in the point of transaction and where they're at.

Jessica Manna (25:52):

So where do you find that difference, right? I can think of a bunch of tech that this person is using and it's really impacting their business. And I know if I could get 10 other people to use it, it would impact theirs. But there's the dip, right? There's that gap that you've got to get past and it's the knowledge and you have to touch it so many times you have to use it practically so many times. So how do you really say, is it that it's not useful or is it in the dip that they're in?

Alec Hanson (26:23):

Yeah, I mean this is a healthy tension comment, so I'll give you an example that's relevant to our world right now. So we allowed in the retail side loan officers to turn on and off certain pieces of technology depending on how they wanted to carry on their transaction or their lead management. And so for example, one of that was automated texting. So they said, Hey, if I get a lead, I don't want all these text cadences to go. I want to control that. I want to have it differently. And well, what are you doing? Nothing. Great, super strong strategy. Good

Jessica Manna (26:56):

Good for you for letting pick it.

Alec Hanson (26:56):

We let them pick it and they picked it. They picked nothing. That's incredible. And so to your comment about being tight with sales, I called up my old boss and I was like, John, and he's like, just turn it all back on. And so I'm like, well, let's it out and then turn it all back on. But that's where we're going to kind of come to the table and say, well, this is what we we're doing and there's no opt out on this. And if want to, we will help you. If you want to change some language, we're good on language changing, but we're not good on nothing. No longer works. And that's a little bit of bringing the horse to the water and then putting their head under it. They're going to drink at some point, but that's kind of where those are the discussions that we're having right now.

Krish Dhokia (27:44):

Going into 2024 with the industry, the market and all these things that are kind of looming right, what's going on. But changing up the model of the technology is kind of because you turn things off. Well, guess what? You do have some super users. Typically they're at the middle or top of the pack. I've found, this is just my research, a lot of top producers don't use anything. It's the wildest craziest thing. It's an anomaly, but it's not. It's pretty common. But you're turning anything off for those who you're impacting them and their business and like you said, how do you make that judgment call? But maybe using 2024 as an opportunity to change it up a little bit in the sense that, hey, do you have negotiation skills? Is it seek cost or the cost of the product overall that you can maybe kind of shave a little bit here and there or provide the model as, Hey, here's a buffet of things like you said, and pick what you're going to use. But if you don't use it, you lose it, right? There is no right answer there, but what's at the back of every marketer's minds and every executive's minds is how do you not then pass that cost onto the actual loan? So there's that piece because we're all trying to be profitable right now as well.

Steven Cooley (29:14):

OfCourse.

Jessica Manna (29:14):

Yeah. I think something that's really a wind at our sails right now is that technology is so good and it's getting better at such a fast rate where we had to press for a long time log in and press this button and do this thing. We can now really flip our mindset and say, oh, I've got to better integrate my stack. I have to have more automation. And to your point, maybe not going to allow as much customization or as much opting out, Hey, it really does work if you let it run in the background. But there's just so much pickup from all of the better integrated and better automated tech these days too.

Krish Dhokia (29:59):

I almost look at technology as the same as loan offices look at, or we look at products and programs. We're willing to launch products and programs and meet certain DPA needs in certain states or whatever. Every loan office is going to need something slightly different. And they oftentimes come to us with their own preferences, which is like, Hey, I'm not getting off monday.com. I don't care what you do. That's my thing. I customized it.

Steven Cooley (30:28):

I got templates and everything.

Krish Dhokia (30:30):

I do all my own Canva. It is very common, but there's a trust. Know who you're recruiting, ask those questions, but if you give them too much, and I worked in an organization a while ago that had literally everything. There were different model, but there were so many things, and I can't imagine mean, and someone I know who might be sitting on the stage helped kind of reel it in and we had this one CRM and the super users and it was great, but then comes the next step, right? Market's going nuts. Then you have to have that plan for all of your technology and what you want to replace it with. We are looking at a CRM. We want to evolve that and we want it to do.

Jessica Manna (31:17):

Call Krish he's in buying mode, you guys.

Steven Cooley (31:19):

Yeah. There he is. Open yourself up to a Incredible amount of drip email. So it's all good. No, but I remember one, no one's here from mortgage returns, right? You guys remember mortgage returns? It was post close. That was it. That was all it did. And everyone had it and it was great. Or was it seven years ago that was, we were using that at a former company and now we have a plethora of options. And I assume that everyone is now going through this process like, okay, what do I use? I sit on demos so often, but are we engaging our salespeople to be part of that decision making process, marketing councils or whatever. I remember doing demos as me and the CTO and like, okay, yeah, this looks good. Let's do it right. And maybe bring in compliance, legal to kind of redline the contract, but that was it. Sales had no part of it. They didn't want it. At the end of the day, why would they use something that they didn't vouch for?

Steven Cooley (32:27):

Well, I'm going to try to ask one question that we answer concisely. I do want to give everybody a chance to ask question if you haven't. Often we look at the industry and we look at the economists, the data companies and whatnot to forecast the next year. And often marketing gets a little bit overlooked. And my idea of marketing is a professional that actually has a gross understanding of the market and then applies different strategies, advertising, et cetera, et cetera, to that thing. And so I think this is a perfect time to ask what are we forecasting in 2024? Go ahead.

Jessica Manna (33:04):

Alright, so is this answering our question?

Steven Cooley (33:07):

Sure, yeah. Let's try to tie it together so we can, yeah, sure. What are we going to do? Are we going to double down on LOs?

Jessica Manna (33:15):

Yeah, I think next year is still a year for los. I mean, look, they say rates might come down to six by the end of the year, and that's going to give some boost to refi over the course of the year. That'll give some, unlock some people who've been sitting on their house. But at the end of the day, I don't think going to be in that refi boom where consumer direct is really the dominant channel until rates get much lower than that. So my money's on retail if I have to be pinned down.

Steven Cooley (33:51):

There you go. Go ahead, sir.

Alec Hanson (33:55):

Alright.

Steven Cooley (33:56):

What are you going to do next year?

Alec Hanson (33:57):

I guess it'd be total devastation. How many of you guys were around in the last crisis cycle?

Krish Dhokia (34:07):

We were all alive during that time. I'm sure 10 years ago.

Alec Hanson (34:10):

That one felt a lot more like a car crash where it just was very sudden. A lot of companies went out of business overnight. Many of you probably remember that. It felt really sudden. I was talking to somebody about this cycle and it feels a lot different. It kind of feels like being choked out, and I have never really personally been choked out, but I heard it's terrible.

Alec Hanson (34:35):

That's the next panel is the live demo.

Steven Cooley (34:36):

Yeah. Yeah, sure.

Alec Hanson (34:39):

And so when it comes to this question, I think I don't think rates are going to come down dramatically because I have to catastrophize that for myself. If they did, then we're all happy. I just have to prepare myself.

Jessica Manna (34:51):

We'll be glad we're wrong.

Alec Hanson (34:52):

Emotionally that it's not going to happen. I think we have to be students of the real life experience that we're having around us at all times and continue to learn and be adaptive and flexible depending on what we're seeing in real time.

(35:08)

I think sticking to a plan with a set of an arrogance that says, this is what I think is going to be right. And I think that we can be nimble enough. I think that we've proven that we're adaptable and I think we can watch, and I think we can listen. The digital customer is still pushing buttons on the internet. They're not stopping and they're getting swept up by aggregators and then they're getting put into machines, but they're also bucking back against that. I had a really interesting experience where we started a specific campaign on one of our brands to drive consumer education and get leads. And the second we put it towards a landing page instead of a person that they could direct message, they turned off entirely.

Krish Dhokia (35:46):

Wow.

Alec Hanson (35:47):

Because we don't want to get put into machines anymore, do we? But at the same time, our direct to consumer contact centers making almost 950,000 calls a day because people are still pushing buttons on the internet. So I think you have to be watching all of these things in real time as consumers change their behavior, as they start to adapt, as they start to continue to fix and change how they want to do business. And I think that's how we're all going to survive as we maintain that flexibility and that adaptability and listen. But I think that you need to play in all the areas and pay attention.

Krish Dhokia (36:21):

I was definitely thinking all of that, and I definitely don't like going after you said it so much better though. But if I had to take a stance on which will deliver more, I'll be even keel as well. I think that each party is responsible for delivering certain things. The enterprise needs to be able to, again, be cognizant of costs and all of that fun stuff and getting you the tools that you need, but building the brand, building the support mechanism and coaching and all of those things so that the LO is then empowered to go out there and build their business as well. It's almost like teaching loan officers. I mean, you pretend like there is no technology. Give them a Rolodex. See how well they do? Now you have all these tools and you can really build your business. I mean, look, loan officers don't come to mortgage companies because of anything but the products, the rates, the reputation, and the tools that can help them deliver their business. That's why you don't see someone going from an uber tech savvy organization to a caveman esque mortgage company. It's not going to happen. You have to be in the middle. You have to provide the necessary tools, CRMs, and campaigns and all those delivery mechanisms have to exist, otherwise your company won't exist, if that makes sense. Right? The fundamentals have to be there. So you're not investing the mortgage company itself. You're not just investing in the company you're investing in LO.

Steven Cooley (38:09):

Awesome. We have five minutes, I believe. Is that right? Yeah. So if we anybody have any questions, we probably answer a couple. I think. Mr. Kelleher, go ahead. Is he raise your hand or are you stretching? I don't ask question. What's that?

Audience Member 1 (38:26):

Is he It's real quick. One of the biggest vulnerabilities I see in the industry, and maybe Covid did it, is the work hours of loan officers. And Alec, you mentioned digital when they're pressing buttons now to me, seems like weeknights really early in the morning on weekends, cash out happens. Nobody wants to talk about their personal problems around work. It seems like those hours aren't being matched. Any ideas on how to recruit people to beta convert both models? If that's true.

Krish Dhokia (38:56):

I think that's been an age old issue prior to covid. I mean, for any national organization that has different time zones, that's always an issue. Mortgage loan offices and real estate agents work on the weekends. Corporate does. It is kind of like that whole separation. But I think that we also then create all these, I don't know, platforms and Oh, I'm going to train you on these platforms and you're not really leaving real hours dedicated to the originator when they need you most. They can't call you just go into inbox and go through this workflow. So I think, I'm not saying we do it well, but maybe there needs to be some more conversation around how many hours or man hours, human hours rather, your team is going to dedicate to the support of your team or its salespeople versus just trading on the tech.

Audience Member 2 (40:00):

Question for you. So you had mentioned something about you guys are making 900 something thousand calls, but is that, or no, I'm sorry, not that many, but people are actually still going to the internet and that they're pushing buttons on that. Yeah. How much are you spending going into say, let's say next year as to your advertising budget? Even though right now it's not really, it's a smart move to be spending so much amount of money, but on your marketing budgets each, how much are you guys allocating for that?

Steven Cooley (40:33):

I can't wait to hear this answer.

Alec Hanson (40:35):

It's going to be another non-answer, but it'll be directionally helpful. It'll be helpful. There's a natural tension between wanting to spend enough money to choke out all our competitors and being fiscally responsible. We're a public organization. Our job is to make money, jobs to deliver, share. This is an unprecedented down cycle. Every company's trying to figure out how to navigate it their own way. And so I would tell you that there are very heated, intentional, fun meetings around that topic on a daily basis with all of our partners, all of our vendors, all of our lead aggregators, our retail channel, all JV channel. And I don't think if you're having those conversations in real time, then your hands off the pulse and you're going to miss the opportunity because I mean, it's one of those questions too of rates are moving every day. We all know, and that dramatically changes consumer sentiment in a blink.

(41:37)

And so all of a sudden you think you know the market and then the rates move twice in a day and Barry Habib won't stop fricking calling you. And you got to readdress your strategy almost that evening because tomorrow you're going to spend money again and how much should you spend? And so it's art and science blended into this mess. And I wish there was a crystal ball where we could navigate it, but we're all doing the best we can with really smart people. And so we're spending strategically appropriate amounts of money. How's that for a non-answer?

Krish Dhokia (42:07):

You were supposed to say art versus math.

Audience Member 2 (42:08):

Spending money is actually positive.

Krish Dhokia (42:11):

Well, So I'll give you an example. It blows my mind. Our call center is doing 95% cash refinances, and our retail group is doing none. And I'm like, guys, they're getting refi. They're doing loans because our retail team, which is my people from my history, are making terrible assumptions. Oh, they have a 2% rate, 3% rate. They don't need anything really, because getting a little cash out refi over there, you should probably call them. So I think you got to stay in the game. And we're all for use competitors. We all want to win. We want our teammates to win. So that's how we're handling it. So sorry, I was super politically, who are you voting for? I can tell you.

Steven Cooley (42:55):

Well, Yeah, we're good. Awesome. It's six o'clock. That's our time. We're getting thumbs up. Thank you so much everybody. Awesome having everyone.