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Why digital marketing is important for lenders and loan officers

Maximizing growth and customer engagement in the mortgage industry through digital marketing

97% of consumers search for local businesses online, and 78% of marketers report that digital marketing significantly increases business revenue. If you’re not leveraging digital marketing in today’s mortgage landscape, you’re missing out on a significant opportunity. 

In our fast-paced, technology-driven world, digital marketing has become an essential competitive advantage for mortgage loan officers (MLOs) using the right tools. With the industry facing high interest rates and inventory shortages, reaching borrowers first and maintaining visibility with past clients and real estate partners is imperative​.

The current landscape

According to HousingWire, the real estate market is grappling with high interest rates and limited inventory, creating a challenging environment for mortgage lenders and loan officers. The current state of the market underscores the importance of staying ahead of the competition through effective digital marketing strategies. By leveraging digital channels, MLOs can effectively target and engage potential clients, ensuring they remain visible and relevant​​.

Why it’s complicated 

The mortgage industry has been traditionally slow to adopt new technologies. Many MLOs still rely on outdated marketing methods that are less effective and more costly. Additionally, the rapid pace of technological advancements means that staying up-to-date with the latest digital marketing trends, tools, and associated regulations can be daunting for those not well-versed in the field. HousingWire highlights that embracing digital transformation is no longer optional but essential for survival and growth in the current market​.

Key questions to consider

  1. What is digital marketing, and how can it benefit mortgage companies and LOs?
  2. How can mortgage companies effectively utilize paid and non-paid digital channels?
  3. What are the cost benefits of digital marketing compared to traditional methods?
  4. How can digital marketing improve referral generation from real estate agents?
  5. What are the advantages of automation and compliance in digital marketing?

Answers to these questions

1. What is digital marketing?

Digital marketing includes all marketing efforts that leverage digital channels like websites, social media, email, other channels to connect with current and prospective customers. The goal is to meet customers where they spend most of their time: online. Digital marketing enables highly targeted, measurable, and cost-effective campaigns, providing a more personalized and engaging customer experience while driving revenue​.

2. How can mortgage companies utilize digital channels?

Digital marketing occurs across various channels, categorized into paid and non-paid efforts:

Paid digital marketing:

  • PPC/Paid search: Mortgage companies can place ads on search engines like Google, targeting keywords relevant to their services. Each time a user clicks on these ads, the company pays, driving high-intent traffic to their website and increasing the chances of lead conversion. This method ensures immediate visibility for competitive keywords, attracting potential clients actively searching for mortgage solutions.
  • Paid social: By promoting posts or running ads on platforms such as Facebook, Instagram, and LinkedIn, mortgage companies can reach a wider audience. These ads can be tailored to specific demographics, ensuring that the content resonates with potential homebuyers and refinancers. This targeted approach maximizes ad spend efficiency, enhancing engagement and driving more qualified leads to the company’s offerings.

Both Paid Search and Paid Social offer the ability to segment your audience based on numerous factors. This includes demographics such as age, gender, and location, as well as more specific criteria like interests, online behaviors, and purchasing history. By utilizing these segmentation capabilities, mortgage companies can create highly targeted campaigns that reach the most relevant audience, ensuring that their advertising efforts are efficient and effective. This precision targeting helps in maximizing ROI by delivering personalized messages to those most likely to convert, thereby enhancing lead quality and driving higher engagement rates.

Non-paid digital marketing:

  • Organic search: Optimizing website content with relevant keywords and quality backlinks helps mortgage companies improve their rankings on search engine results pages (SERPs). Higher organic rankings increase visibility and attract more traffic without the ongoing costs associated with paid advertising. This sustainable strategy builds long-term online presence, making it easier for potential clients to find the company organically. However, this strategy takes quite a long time to generate meaningful results.
  • Web content: Maintaining a blog, updating website content, and participating in online reviews and affiliate marketing helps build authority and trust. Engaging and informative content can attract potential clients, providing valuable information and establishing the company as a thought leader in the mortgage industry. Consistently producing high-quality content also supports optimization efforts, driving organic traffic and enhancing brand credibility.
  • Email marketing: Sending personalized and targeted emails to potential and existing customers is an effective way for mortgage companies to nurture leads and maintain relationships. Regular updates, newsletters, and promotional offers can keep your audience engaged and encourage them to choose your company for their mortgage needs. Email marketing also allows for segmentation and personalization, increasing the relevance and impact of each message.
  • Social media: Creating and sharing relevant content on platforms like Facebook, Twitter, and Instagram helps mortgage companies engage with their audience organically. Regular posts, community interactions, and leveraging user-generated content can build a loyal following and enhance brand visibility without direct advertising costs. Social media also provides a platform for real-time communication, allowing companies to address inquiries and build stronger customer relationships.

When it comes to performance differences between Paid Digital and Non-paid Digital, leads generated from Paid Digital convert at nearly 3.4X compared to those generated from Non-Paid Digital and lead to at least an 80% increase in brand awareness according to data from Unbounce.

3. Cost benefits of digital marketing

Traditional lead generation methods often result in high costs per lead, burdening mortgage companies with significant expenses for acquiring new clients. Digital marketing offers a cost-effective solution by enabling precise targeting of specific demographics and optimizing ad spend to ensure maximum impact. This approach not only reduces overall costs but also increases the efficiency of marketing campaigns by reaching potential clients who are most likely to convert.

Research by Evocalize shows that self-generated leads are at least 300% less expensive than purchased leads, providing substantial savings for mortgage companies. By generating their own leads, companies can maintain greater control over their brand and messaging, ensuring consistency and compliance with industry regulations. This strategic shift towards digital marketing allows businesses to allocate their resources more effectively, ultimately driving better financial outcomes.

4. Improving referral generation

Capturing referral business from real estate agents is a common challenge for mortgage companies, often requiring significant time and effort to build and maintain relationships. Digital marketing bridges this gap by facilitating better integration with existing tools and creating co-marketing opportunities with real estate professionals. By leveraging digital channels, mortgage companies can enhance their collaboration with agents, resulting in a more streamlined and efficient referral process.

This synergy not only helps generate high-quality referrals but also strengthens partnerships with real estate agents, fostering long-term relationships that benefit both parties. Through joint digital marketing efforts, such as shared content and co-branded campaigns, mortgage companies can expand their reach and tap into the agent’s network, thereby increasing the potential for new business and reinforcing their market presence.

5. Advantages of automation and compliance

Digital marketing is inherently more efficient than traditional methods, thanks to the power of automation tools that manage campaigns, track performance, and adjust strategies in real-time. These tools ensure optimal results with minimal manual intervention, allowing mortgage companies to focus on strategic initiatives rather than day-to-day campaign management. Automation also facilitates precise targeting and personalization, enhancing the effectiveness of marketing efforts.

Additionally, platforms with built-in compliance features safeguard campaigns against potential legal issues, a critical aspect highlighted by HousingWire. Compliance with industry regulations, such as the recent FCC lead generation rules, is essential for avoiding costly penalties and maintaining consumer trust. By utilizing digital marketing platforms that incorporate compliance mechanisms, mortgage companies can ensure their campaigns adhere to legal standards, mitigating risks and promoting a trustworthy brand image.

Digital marketing doesn’t have to be hard, even if you aren’t a marketing pro

Digital marketing might seem daunting, especially if you don’t consider yourself a marketing expert. However, with the right tools, it can be straightforward and highly effective. Here are key features to look for in digital marketing tools that make the process easier and more impactful:

  • Powerful, flexible automation: Choose tools that offer automation capabilities allowing you to harness your business data effectively. Automation can streamline your marketing efforts, making them more efficient and less time-consuming.
  • Built-in regulatory compliance: Ensuring compliance with industry regulations is critical. Look for platforms that have built-in compliance features to safeguard your campaigns against potential legal issues.
  • Effective co-marketing with real estate agents: The ability to seamlessly co-market with real estate agents can significantly enhance your business. Choose tools that facilitate this collaboration effortlessly.
  • Hyperlocal marketing: Staying relevant in your borrower’s community is crucial. Opt for solutions that allow you to localize your marketing efforts, ensuring your campaigns are tailored to resonate with local audiences.
  • Flexible budgets, campaign types, and durations: Flexibility is key in digital marketing. Select platforms that offer a variety of budget options, campaign types, and durations, enabling you to adapt quickly to changing market conditions and business needs.

Investing in digital marketing doesn’t have to be complicated or intimidating. By leveraging tools that simplify and enhance your marketing efforts, mortgage companies and LOs can stay competitive, generate leads, and grow their business efficiently.

Conclusion

The mortgage industry’s landscape is increasingly digital, and the need for effective digital marketing has never been greater. Brokerages and loan officers must embrace these strategies to reach a broader audience, reduce costs, enhance customer experiences, and stay competitive. Investing in digital marketing is not just about keeping up with the times; it’s about securing a prosperous future in the mortgage industry, even through tough markets. Embrace digital marketing now to ensure sustained growth and success well into the future​​.

Sources:

Justin Ulrich is the VP of Marketing at Evocalize.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this piece: [email protected]

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