Can mortgage technology help lenders drive purchase business?

Consensus at MBA Tech: YES!

If capacity and compliance were the C-words that drove our industry in 2013, this year’s C-word is conversion. Or so says Garth Graham, managing director of Stratmor Group, who moderated Wednesday’s Great Debate session at the MBA Technology Conference.

The title of the debate was: “Can technology really drive purchase business?"

The participants included Don Kracl, Mortech/Zillow; Kesna Lawrence, Datamyx; Seth Kronemeyer, Freedom Mortgage and myself.  The audience was also an active participant: voicing its opinions through real-time polling and texting.

Garth opened the session with a provocative question: What’s the most innovative and dramatic example of brand building within the mortgage industry today? His answer: Quicken’s Billion Dollar Bracket March Madness contest. He believes the event, bankrolled by Berkshire Hathaway, is creating brand awareness and engagement with thousands of potential customers. Obviously, not every lender can think this far out of the box – or get Berkshire Hathaway to bankroll it—but he argued its the kind of bold thinking that can, over the long run, drive purchase business.

He then went onto lead a jovial debate covering a broad range of topics. How to convert different types of leads. The need to build relationships with Realtors® builder referral sources. How to empower and manage LOs. Is social media the answer or just another tool? What can be done to focus marketing activity on the most productive prospects and raise the ROI of marketing?

Here’s a sample of some of the observations.

Don Kracl, responding to a question on the obstacles that need to be addressed to make the successful transition to purchase, questioned whether some loan originators “lack the skills” to succeed in a purchase environment and may need to be retrained. He also raised the question of whether it’s better to lead with price or service in retail transactions.

Freedom Mortgage’s Seth Kronemeyer noted, like the rest of the industry, had experienced a decline in volume as refinances receded and that his company was exploring multiple channels and new options, like social media, to reach the next generation of homebuyers. Building brand awareness and focusing on the customer experience will be critical. Sending out “rate alert emails” won’t cut it in 2015, he said.

“All leads are not created equal,” argued Datamyx’s Kesna Lawrence. For example, “The ROI in marketing to active mortgage shoppers can be 20% to 50% higher than marketing to leads where no relationship exists, he observed. Infusing data and behavioral insights into leads, he said, is the key to increasing ROI."

One of the questions I fielded was where is the best place to handle a lead: in a CRM system or an LOS? (As a company that offers both: this was a little like asking a parent which child he likes best.)

My response, and the consensus among the panelists, was it depends where in the sales cycle the lead is. A prospect just beginning to think about buying a home is probably better nurtured in a CRM. But a family with a sales contract in hand and looking to close as fast as possible belongs in an LOS. One point I did share with the group: there is great interest at the moment in CRM technology. Our company’s webinars on the subject are routinely drawing 300 to 400 clients per event.

What did the audience think? They felt:

·      Spoiler alert: Technology will play a major role in the transition from refi to purchase.

·      Consumer direct does have a role to play beyond refinance and could be an effective channel to accommodate today’s consumers who prefer “self-service.”

·      Email, traditional direct mail and social media all have a place in the marketing mix. Interestingly, social media didn’t seem to elicit a strong response either for or against. No one scoffed at it, nor claimed it was the magic app that would drive millions of Mark Zuckerberg’s customers to our doorstep. The consensus: it has potential for branding and customer engagement; but it is just another tool.

·      LOs will, of course, play an essential role in building purchase business. But they’ll have to do more than just drop off donuts. From a compliance perspective, there are significant risks in letting LOs have unfettered control over marketing and deals.

At the end of the day, there was more agreement than disagreement on most subjects. Probably that’s because there’s no debating where the industry has to go… and quickly.

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