We entered the summer in a surprise low-rate mortgage environment. But given the sudden and volatile path to where we are now, many lenders aren’t staffed to capitalize on a rate-and-term environment. Against this backdrop, lenders need tools to help them protect and grow their portfolio; maintain a healthy, balanced pipeline; and prioritize their prospects.
We wanted to do a deep dive into this rollercoaster ride we’ve been on tracking rate activity recently, so we explored the current environment in our recently released whitepaper, How to Drive Mortgage Originations Despite the Challenging Lending Environment. It looks at how to seize market share through strategic marketing that leverages data segmentation, expertise, and targeting to turn prospects into clients—despite market challenges.
We’re giving you a two-part preview of what you’ll find in the whitepaper. In Part 1, we looked at the state of the industry. This article, Part 2, explores some ways marketing can address it.
Making mortgage marketing count
It’s about knowing your target audience. In order to increase the number of converted borrowers, lenders have to first understand who makes up their intended audience, what that audience wants and values, and what the likelihood is that they’ll make a change.
By knowing these factors, lenders will not only see their bottom line increase, but will do that at the expense of their competition’s bottom line, capturing real market share.
There are more than 300 million people in the United States. If lenders considered every single one of these people a potential customer, it would take forever to make any progress in growing revenue. Instead of convincing people that they should buy a home and get a mortgage, lenders should target the people who are already active in the market and looking for a mortgage — the people who don’t need convincing. Here’s how:
One very effective way to find the right consumers is through trigger marketing from a consumer-initiated transaction that results in a credit pull/inquiry at a credit bureau. When a consumer has their credit pulled, it means they’re in prequalification mode. In order to beat out the competition, search all three credit bureaus—Equifax, Experian, Transunion—every day to ensure 100% coverage of consumer credit pulls. This new list of potential mortgage customers, which should be growing and evolving every day, is where lenders need to center their marketing efforts. This list is the cream of the crop when it comes to the most promising potential clients.
Successful lenders capitalize on the triggers through cross-selling—focusing mortgage sales on people who have (or have previously had) a relationship with the company — or on retention by reducing the number of payoff requests. Lenders may also focus on prospects that they originated and subsequently sold off to another lender, as well as consumers that they turned down at one time but who now meet underwriting criteria.
Savvy lenders target customers based on geography and custom underwriting parameters. From the moment a trigger comes in, a lender has approximately 14 days to get in front of the customer before it’s too late. Whether it’s a call center loan agent or a branch loan officer, lenders need to create a process to guarantee the active-in-the-market consumer receives the offer within that time frame—as well as making calls, sending direct mail and emails to current or past customers. Direct mail still proves most effective with net-new customers. This outreach should include a competitive offer—such as loan terms, approval time frames, reduction of closing costs or any other additional bundled services.
Despite the ongoing challenges lenders face, there are still significant opportunities for savvy lenders to seize market share from those with less effective and efficient marketing. The secret is to know how to navigate market transitions. With the right data, models, performance measurements and follow-up offers, the list of potential clients will quickly transform into a list of best in-market prospects who have a high likelihood of converting into loans. This allows mortgage originations to thrive and grow in any type of lending environment.
The key is finding the right partner. Deluxe has over 20 years of expertise in data segmentation and targeting for banks and non-bank lenders alike. Our exclusive tri-bureau data leverages over 250 million data points, 40+ custom attributes, and 750,000 event triggers per day to deliver a 75% lift over single-bureau sources.
Multi-channel recognition, Deluxe’s proprietary analytics, on-demand web portal and full-service marketing capabilities make us uniquely well placed to assist lenders that are under-equipped to leverage the opportunities in this volatile climate.
Read the full whitepaper, How to Drive Mortgage Originations Despite the Challenging Lending Environment, and contact us with any questions. We’re here to help.