Like most industries, the mortgage market has its peaks and troughs. Wouldn’t it be great if client business came in a more continuous and manageable stream? A good way to smooth the peaks and fill the troughs is to develop an effective lead generation strategy to help steady the flow of client enquires. This needn’t be complicated and dedicating just a couple of hours a week can make a big difference.
Make hay when the sun isn’t shining
Mortgage intermediaries attending an InterBay commercial mortgage seminar last week were keen to learn more about lead generation, a topic covered in the presentation. Some said they had a structured approach to new business, with lead purchasing and networking core practices. However many brokers had a less ordered approach – the business was still coming in but not in a controlled way. Although they were confident that new business would appear next week, they couldn’t state with any accuracy where the leads would come from.
No matter if the broker is looking for commercial or residential clients leads, the broad principles remain the same.
By far the most valuable sources of leads are repeat business and recommendations. These leads are not only ‘free’, they will be most receptive to you. There’s less work needed to convince the client to do business with you as they are aware of your reputation and offering. So just how do you encourage repeats and recommendations? It’s vital to provide outstanding service to your existing clients so that they have the confidence to recommend you to their family and friends.
You can also increase your chances by maintaining regular contact with your existing client database. Don’t bombard them with communications, but contact them when you add a new product or service that may be of interest to them. Call them when they come to the end of any promotional or early repayment charge (ERC) period. If nothing more, annually send them a letter to remind them of the services you can provide to them or their family and friends.
While you are analysing your database, create a simple profile of the clients that you’ve been most successful with, note how the relationship was formed, what type of product they took. You’ll then have the profile of the type of clients you should be targeting in the future. For example, if you’ve had major success with first-time buyers, you may want to aim your marketing in this direction.
Expanding your range
That said, this analysis will also highlight areas for development. Can you branch out and add a new service? Can you cross-sell a new product? InterBay works with thousands of brokers who are adding commercial mortgages to their repertoire, an obvious addition if they are already working with residential mortgages. These brokers already have a great stock of leads in their own database as many self-cert borrowers will own small businesses that require finance.
Leads: to buy or not to buy?
With more people using the web to purchase, browse and search, these are opportunities for lead generation companies to capture qualified leads in real-time. In fact, because of the web, there’s been an explosion of lead generation in the last couple of years. Many of these services are flexible enough to allow the lead purchaser to choose the type of leads they want in great detail, by postcode area, the type of product required (for example, buy-to-let), the frequency of leads supplied, how it is received, etc. Lead purchasing can be very effective but the initial purchasing isn’t cheap. When researching this article, I found leads from £35 to £125 each – and it wasn’t easy to compare the quality of these leads.
A word on cold-calling
The FSA has banned ‘traditional’ cold-calling in the mortgage world. This applies to calls where no existing relationship is evident with the client or they have not requested contact. Therefore when purchasing leads it’s vital to understand how they are sourced. The Association of Mortgage Intermediaries (AMI) has produced a charter to promote good practice after investigating lead generation firms. The best course of action for a broker new to lead purchasing would be to choose a lead generation company that has clear policies, to set a budget and to carry out a modest test before committing to a large programme.
For any firm to survive and grow it needs a constant source of business: ideally a mix of maintaining existing relationships, seeking referrals and obtaining new leads. On average, acquiring a new client costs 10 times more than retaining a current client. Therefore, a broker looking to optimise lead generation is well advised to carry out a selection of activities but focusing on their existing clients first. As well as general marketing activity, they should start by working their own client base, then begin networking for lead referral sources and finally, consider purchasing leads if needed.
