Enhance Your Sales Funnel Flow for Mortgage

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foreign thank you for joining us everyone my name is Emmy Sauls and I'm the director here at A lender Logics in the marketing department we've got Patrick O'Brien on the call he is our CEO and he'll be leading our presentation so it is just after 2 30 we're going to go ahead and kick this off Pat I'm going to pass it to you if you have any questions by the way throw them into the chat we're not going to do a live q a on the call but we will follow up with you after the fact so just wanted to slide that in there before Pat kicks off all right good afternoon everybody um leads to loans optimizing your mortgage funnel um so this topic I don't know I find this super interesting because I originated uh loans for a long period of time 15 years um and the prevailing wisdom was always if you wanted to grow your business increase your business you just needed to grab more leads you need to do those activities get more leads and while that's true um kind of uh uh being in business and kind of understanding sales metrics you start to learn that there's a lot more uh other levers you can kind of pull as a salesperson Beyond just out there finding more leads to grow your business um so this is a topic we talk a lot about with loan officers and kind of trying to optimize the flow of leads from you know the point in time that they're introduced to us all the way through till closing um there's this quote um that is popular in sale circles that all sales is a leaky funnel um I don't know where it came from but you know if you think of sales is a funnel um all opportunities kind of go on that top of the funnel right like All Leads go in the top of the funnel and closings come out the bottom and you know obviously we want to do as much to pour as many leads in that the top of that funnel as possible but as those leads Traverse through our funnel there's leaks um not All Leads that we um that we take in the top of our funnel turn into closings right it's like if I get 500 leads 500 leads do not close so there's at different parts of the funnel we have leads kind of spilling out you know we have we have we have leakage and and what we want to do is try to take a look at um the things we can do throughout the the point of that funnel to kind of like patch it up a little bit so that it's not just about finding more leads but it's it's it's about improving those conversion rates all the way down to font all the way down the funnel to get those loans to close um how we interact with consumers and kind of the strategies that we undertake at every stage of that funnel uh from lead all the way down through closing impacts what those conversion rates are um in the interactions that we have with them kind of earlier in the process really kind of have an outsized impact on whether those um whether those leads make it to closing we talk to a lot of loan officers and a lot of lenders and everybody measures applications you know it's like if I asked a loan officer how many apps they did last year like most loan officers would be able to answer that question um if I asked them uh how many how much business they closed last year you know what their closings were most lenders would be able to ask that question most loan officers would be able to answer that question they know those numbers um but a lot of times what we don't what we find is they don't know those numbers further up the funnel how many leads do they interact with how many pre-approvals did they issue um you know and how many of those excuse me pre-approvals turned into applications um I think that's kind of just the the way the mortgage business is kind of operated historically is those those have been the numbers we've always measured apps closings without paying a lot of attention kind of into those uh metrics um further up funnel and really what that's caused us to do is you know our our guy here on the left hand side of the screen he's hanging around the bottom of the funnel he's just worried about how many apps has he taken and how many deals is he closing he's not kind of dealing with those further up funnel metrics and and and that to a certain extent Works in certain markets um you know in um actually I'm borrowing this uh analogy from uh uh from rocket that that recently was kind of talking about this and you know in the market we're coming out of in the last 18 to 24 months you could talk to a lead um and that person could be a week two weeks a month away from signing a contract you know we the the the the the velocity of business is moving so quickly that you know from the point in time that we talked to somebody to the point in time that that person you know wanted to get a mortgage was a matter of weeks you know under a month and there were plenty of those borrowers to go around and now we're finding ourselves in a situation where loan officers need to engage with the borrower for a longer period of time you know you might need to talk to a borrower for six months 12 months you know the 18 months they might be 18 months away um from getting a contract on a house so they're coming into our ecosystem but they're not kind of ready quite quite yet ready to sign that contract and the approach that we take um is as loan officers lenders to excuse me deal with how to engage with those borrowers given those market dynamics is super important kind of um making sure that we're kind of sticking with that borrower um you know throughout that entire their entire life cycle foreign like I said before you talk to most loan officers and most loan officers are going to know how many apps you know how many how many have you done this month um you know what's how many how much have you closed year to date um those are all metrics that we've tracked for for years is is an industry but it's really important for loan officers sales managers to understand what's the number of leads that we're even interacting with I can't close I'm getting 200 DLC 200 leads a year I'm not going to close 200 deals right like I need to understand a little bit further up what do my numbers look like so loan officers need to kind of obsessively focus on those numbers how many leads how many how many leads in a given month are you dealing with how many leads in a given year are you dealing with equally as important is what is that conversion rate how many of those leads are we converting to pre-approvals or pre-qualifications we're we're certainly into a uh very heavy purchase Market at this point we can't get a deal a lead to close if that first does not get qualified or pre-approved like that's just a critical part of that borrower's Journey so what's the percentage of those leads that we're converting to pre-approvals what are the things we can do to improve that that's what we're here to talk about um of those pre-approvals how many of those convert to loan applications if I were to ask a loan officer or sales manager how many pre-approvals does a given loan officer have most don't know most of them have no clue they're they're not measuring those further up the funnel uh metrics but certainly their strategies that a loan officer can undertake excuse me to improve those metrics to improve that conversion percentage from pre-approval to application and then of course you have your application to closing um you know your pull through rate most people kind of know that number um you know they kind of understand that there's going to be a certain percentage of Fallout from application to closing but certainly there's strategies there um to improve those uh improve those metrics as well um so we're kind of going to talk about those different stages of that uh of that funnel and you know what are the strategies what are people doing what are the technologies that people can use to kind of improve those things especially in a market where you know focusing strictly on the number of leads that are going in the top of the funnel is going to be a difficult thing to do excuse me real quick while I take a sip of water what we did was we created this um tool because we play around with a lot of these numbers ourselves I'm just kind of taking a look at what our clients are up to so we figured hey what the heck why not um kind of create a calculator that we can kind of share out with people loan officers whoever so they can kind of take a look at these metrics themselves and play around with them a little bit and see how um changing uh these figures um impacts their business so I'm gonna pull this open right here whoops got the wrong tab there and basically what we have here is this calculator that um you know we'll make available we'll just throw the link in the in the chat here in a little bit and What it lets a loan officer or sales manager do is take a look at um you know some some basic numbers that most people are going to know I should know my average loan amount right like that's easy to find obviously I should know what my commission rate is um so kind of in this in this sample we're working with here we've got a loan officer that has an average loan size of 225 000 and it's making 90 basis points uh and what we're going to do is just kind of play around some of these numbers here and take a look at like let's say we got a we got a loan officers getting five leads a week right like how can we how does that one officer get leads well maybe they have past customers realtor relationships whatever the case is centers of influence and they're taking in those five five leads a week so 250 leads in a given year if that loan officer converts in this situation we're just gonna you know I'll stick with the defaults here 60 of the of those leads to pre-approvals of those 250 leads they're going to have 150 pre-approved clients um and and you know how does what's the reason there like why does you know why might a lead not turn into a pre-approval well there there's a lot of reasons right like a person could have bad credit they cannot qualify and he was just gonna get a hold of person you know there's there's a lot of reasons why that might be the case um and then uh in this situation again so of those 150 pre-approvals we're going to say 50 of those convert to loan applications well why is that 50 why doesn't every pre-approval convert to a loan application there's a lot of reasons like borrowers don't find houses their circumstances change um you know they uh get priced out of the market who knows there's a lot of reasons why um a pre-approval doesn't make it to to loan application but there's things we can do to increase those rates and that's what we're that's what we're here to talk about and again everybody knows that of those 75 applications they're not all going to close there's going to be Fallout well why do loans fall out uh the house doesn't appraise um you know there's some new piece of information the loan officer took a bad loan application didn't didn't you know disclose something up front or something like that there's a lot of reasons but in this scenario you know if we have a borrower if we have a loan officer that uh makes 90 basis points on an average loan size of 225 000 gets 250 leads a year and converts these uh percentages down their funnel 60 of their of their leads turn to pre-approvals 50 of their pre-approvals turned to loan applications 90 of their applications turn to closings that Lo is going to do 15 million dollars a year in volume and they're going to make 137 Grand and that's great um what are the things we can do and we're going to play around with this calculator a little bit to kind of show you know what are the what how can we how can we do better how can we uh how can we get uh how can we make more money how can we do better with less leads that type of thing so uh bear with me one second just gotta pull up my my keynote presentation together um okay so let's first start talk about the number of leads how do we get more leads like that that was always the thing I was one officer I always crack me up so like we gotta get more leads oh okay a lot easier said than done but what are the things we can do to um grow the number of leads that are kind of going in the top of that funnel uh we can develop new relationships with Realtors you know again a lot easier said than done um but that's kind of those are always the go-to um uh places you know historically where to find New Deals go find more Realtors we can run home buyer education seminars right like we can educate our Borrowers get them to come to classes um capture their information ultimately pre-qualify them they find a house they get a they get a mortgage those are some of the more traditional strategies but there's other things to look at too um let's say your online loan application you know a lot of um the the online loan applications kind of like the front door for the borrower right excuse me hey apply now come to my website fill out this application well what's your online loan application look like um take a look at yours most quite honestly are pretty terrible um you know click apply now and it's uh Hey create an account it's like what I don't even know you you know why am I gonna sit here and create an account I I need to kind of be led down the path a little bit more before I start handing over personal information uh but that front door is really important so taking a look at kind of what is our what's the conduit for us to kind of get that information um you know in the door so we can ultimately convert that borrower that's one way that we can kind of increase the number of people that we're interacting with is taking a look at what that online loan application looks like um and like I said a lot of them are pretty bad out there so you know if if you click on yours and you wouldn't you know you wouldn't fill it out how can we expect our borrowers to do that excuse me um lead capture landing pages is an interesting one which you know has kind of been a newer uh thing in the last few years most loan officers um you know if you have uh marketing efforts emails excuse me CRM sending things out it's normally driving people to kind of like an apply an outlink it's like well is the customer ready to apply uh you know you know we know it's not a bona fide mortgage application but what is the borrower you know what's that Prospect supposed to think you know I'm not ready to apply do I not fill this thing out so those types of things like happening uh not a clear path for for us to engage with that borrower oftentimes you know we're going to see Fallout you know we're not going to be able to get as many leads in the door uh you know because we're we're kind of creating some friction for our for our our Prospect to do business with us really important to look at things there's uh lead pops is a is a company out there uh that kind of builds landing pages for loan officers around different things than just applying out right like our borrower might not be ready to apply so how do we get some of their information to kind of help them out a little bit um you know Community Partnerships what are what are things that we can do go out and um you know co-brand co-branded efforts with employers and things like that um I'll I'll you know key components of uh helping to build out those leads a little bit and obviously like their social media um you know just being out there exposing our brand to people getting them to give us their information to kind of pull them in a little bit deeper um how do we get the of those leads that we collect how do we get more of them to convert to pre-approvals um you know in the in the scenario I'm going to keep flipping around here to um uh my uh whoops I'm gonna keep flipping around to my um browser here to show this calculator how do we get more of these um leads to convert to pre-approvals you know every loan officer is going to say right like well everybody doesn't qualify they have bad credit they don't you know uh they don't qualify right now they had a bankruptcy whatever the case is but if this you know kind of fictitious loan officer instead of converting only 60 percent of their leads to pre-approvals uh and making 137 000 could get that number to seven seven seventy percent you know that's another twenty two thousand dollars in income for that loan officer just by increasing by about 20 the percentage of the leads that they convert to pre-approvals now how do they get there um slip that slip back to my uh uh screen here working with you know there's there's credit repair um uh agencies that we can be in touch with or you know you know kind of online utilities where people credit expert where we can tell people what they need to do to their credit like becoming more expert in those things in order to demonstrate to our clients like hey we can get you in a place um to to you know get you to qualify we can send you to a credit repair agency that's going to send that information back to us um you know there's there's other you know platforms finlockers want to think of where you know you have borrowers kind of um being more engaged on a regular basis when they're not quite ready to get to that point yet um so that you know there's a lot of things out there product knowledge you know every loan officer knows like you know maybe I can't get the borrower qualified for this loan but I can get them qualified for that loan maybe I can't get them with the uh you know FHA um minimum down but if I change it to five percent down um you know in a 20-year term I can get that approved um those are things we can do to kind of help move that borrower maybe into that qualified versus unqualified um stage to kind of increase that um that conversion percentage CRM um you know Outreach to borrowers that aren't quite ready um online reviews like making sure that that borrower knows um you know that we're a trustworthy reputable loan officer to do business with Doc uploading you know getting borrowers engaged earlier in the process getting them invested in the process um increases the um the likelihood that that borrower is going to kind of continue down the road with us to pre-approval even even things like just calling the borrower back more right like sometimes we get a leads like we try the borrower like one or two times like yeah we didn't get all of them you know being a little bit more Vigilant in our follow-up process that borrowers raised their hands so they're interested in moving ahead um with a pre-approval what are the things we can do um this is kind of our sweet spot where we pay a lot of attention to and that is once we've got those borrowers pre-qualified what can we do to turn them into a loan application you know every borrower that we talk to and we pre-qualify does not end up financing a house with us unfortunately but what are the things we can do to increase those percentages um make the borrower a better home buyer a borrower is not going to be a successful home buyer if they do not have Clarity in what their mortgage payment is a borrower is not going to go execute a contract of sale um Be an Effective uh you know bidding on houses or accepting counter officers if they don't have Clarity in what their payment is period so so you know obfuscating that information from our borrower not making it clear about what the payment's ultimately going to be doesn't do us any favors uh not being clear about what the closing costs are um sort of hiding that information from Vara doesn't make that borrower a better home buyer so when we can be clear about what those things are put that power into the hand of our borrower so they know uh for every given circumstance you know what their payment's going to be how much cash they need to close that's what makes it successful home buyer um the ability to clearly look at different scenarios and compare those scenarios in a concise way that a borrower can understand that makes a borrower an effective home buyer that makes them an aggressive a confident home buyer that's going to win a deal that's not going to sit on the sidelines you hear a lot about um you know especially in the market we're coming out of oh my borrower couldn't find a house they were priced out of a house it's like I guess but did they know did they know exactly what was going to happen if they took that counter offer if they increased their offer by five grand did they know or did you know was it was it something that you know you you thought they knew or you expected them to go online and just run some random mortgage calculator and figure that out we as loan officers have to take control of that experience you dial in that user experience based on the type of loan that that borrower qualifies because we have all that information we have this super rich piece of information about you know all what that borrower qualifies for we can translate that um into a user experience for the buyer to give them a really custom tailored you know like a you know mortgage calculator get your prequal letter know exactly what it is for the scenario they qualify to make that person a successful home buyer uh going to flip back to my calculator here okay and let's just say in the same scenario instead of a loan officer saying well only half the people who I pre-qualify actually buy a house first of all muslimiters have no clue because they're not measuring what those numbers are but let's say we can get uh we can increase that number by 20 we can get that number up to 60 of the pre-approvals turn to loan applications because they're doing a better job educating that home buyer making them uh you know confident assertive home buyer um and equally is important keeping them sticky with you so they don't find themselves off at a competitor getting information um in that situation I didn't look at what my first number was here so in this situation we got Law Officers making 159 000 they're doing 17 million dollars a year in volume on 88 applications you know what happens if we can get that to 60 percent you know now they're up to 192 million 192 000 21 million dollars in volume um 105 apps um you know just by tweaking how they were dealing with that borrower during that pre-qualified pre-approved phase of the process um it's such an important thing like we can influence how successful a home buyer is at buying a house um uh oh this is our little commercial so our users when they use our quick wall utility they see an increase in uh conversion by 30 so when a loan officer is using our uh our platform the percentage of buyers that they're able to convert from pre-approval to loan application shoots up by 30 because they're keeping that buyer in their ecosystem they're giving the buyer that the information they need um in order to be a successful home buyer so there are both manual strategies one can undertake to um uh you know kind of help a buyer down that road but certainly there's um Technology Solutions like ours and there's other others on the market as well that will keep that buyer engaged in your Market uh in your ecosystem instead of that buyer finding themselves off on Rocket or Lending Tree or nerd wallet or one of these other places where quite honestly they're just going to be sold as a lead to your competitor um so you know when you can keep a buyer in your ecosystem and answer those questions using technology that you provide that buyer it really changes the game and you'll see instantaneous um uh increase in those conversion rates uh and then of course again this is this is one that most people kind of measure today but but their pull through rate right like once I get that buyer into application um what's the percentage of uh loans that I can get into closing and this is probably one that that um you know loan officers can influence the least but you can influence it there are things you can do to increase that uh pull through rate one of the things that we see is is one of the most impactful things is collecting fees from a buyer up front as early in the process as possible once you have intended to proceed um so collecting an appraisal fee getting that buyer invested in the transaction a buyer that has given you a check for five or six hundred bucks is not is going to be um significantly less likely to walk away for an 80 in interest rate or quarter percent in interest rate when some you know trigger lead uh company calls them offering a lower interest rate um automating that process and taking it out of the hands of the loan officers is a huge lift um I was guilty of it as a loan officer you kind of strike these mini deals with the borrower because it's like kind of awkward to get that money from them it's like oh you know I need to get this appraisal fee from you oh don't worry about it we'll just collect it at closing the fail um you know when we when we have that borrower invested uh earlier on it's certainly going to increase the the likelihood that they're going to pull through um you know one of the one of the products we offer is an automated upfront fee solution where it just takes the loan officer out of it the borrower gets a text message once there's attempts proceed they pay on their device uh all the information goes into the loss the borrower gets the receipt done deal you know none of this oh I'll pay in two weeks or anything like that it's like it's just part of the process you build it in it's automated um and you in and by doing something like that you do your loan officers a favor because you just take them out of that transaction altogether um other things just being transparent you see a lot of loan officers that like have crazy um Fallout rates because they weren't very transparent with the um with the buyer they're surprises buyers don't want surprises when they sign their docs if there's a surprise that's going to increase the likelihood that they're going to talk to somebody else you know to kind of confirm things and we all know as loan officers if somebody comes to Us shopping at competitor we're gonna sharpen our pencil a little bit so being transparent the entire way through with a buyer uh making sure that they you know understand um what the numbers are and that they ultimately match the numbers that they signed at on the application is critical um addition other things appraisal management you know some lenders uh manage appraisals based on spreadsheets because we all know appraisals have a huge impact right like under appraisal is like going to be the prime one of the primary reasons why deal might not make it through um but there's certainly things we can do as in you know as institutions to kind of take a look at that process and figure out how are we keeping people informed how are we moving that process along um you know how are we communicating bad news in the event that a house under appraises you know what are the what are the Technical Solutions we have in place are we updating people Via SMS keeping them engaged throughout the entire process so they know when their loan has been submitted to underwriting when the appraisals come back keeping the agents informed so that in the event that something does come up um you know we can kind of deal with it instead of just you know um not communicating that bad news early enough to be able to save the deal um and also beyond that like overall product knowledge um you know a seasoned loan officer kind of knows what to do in the scenario where something goes wrong can I flip this borrower um to another product can we go into single premium mortgage insurance and lower that debt ratio enough to get it through Au can I massage the uh the loan terms enough to kind of get the get it approved like those are product knowledge things that come with experience so there's Technical Solutions we can undertake uh and then there's also just kind of the the beautiful things that come with um a fair amount of uh experience as a loan officer so I'm going to switch back to my calculator one more time here and just even marginal Improvement of our pull through rate I mean if this loan officer is doing 20 21 million dollars in uh uh an application volume and we can get that to you know 93 they just closed another million you know just just by making a small tweak to our process to increase that pull through you know we started collecting upfront fees um so we're going to get a higher pull through percentage um those are the things we can you know we can implement we can influence um to kind of help that transaction along there's a lot of things that we can't influence but there's plenty of things that we are that we can influence um I play around with this calculator quite a bit and we're gonna um uh Emmy if you can like maybe you want to like put it in the chat or something like that um Okay cool so you know we can look at these metrics along the funnel and just kind of play with it like well you know what happens if if you know next year we only get 200 leads because um you know the Market's going down what are the what are the things we can improve in order to make sure that we make the same amount of money um on smaller volume um you know these are the there's there's things we can do at each of these stages of the pipeline um to increase the likelihood that it moves further down that funnel um so you know we'd encourage you to take a look at you know different solutions we'd encourage you to take a look at our quick wall product which again supercharges that pre-approval to application conversion percentage but again there's other you know you can buy leads if you need to increase um you know the number of leads coming through and ultimately kind of once you have this child and you know what your numbers are you can really dive into um you know so if I'm making 162 000 in this scenario on 200 leads uh 162 000 on 200 leads each lead to me is worth eight hundred and ten dollars so if I'm a loan officer and I have an understanding of okay every lead that I that I get is worth eight hundred dollars I'm gonna treat it that way I'm gonna treat it like it's 800 like somebody's handing me eight hundred dollars would you only call a borrower back you know if somebody was giving you 800 bucks if you only call them once you know probably not you call them more times you know I'd call somebody a lot of times for 800 bucks um you know so understanding what those you know what a lead is worth given in in in that number is going to be different depending on how you perform uh in those metric style funnels so um paying attention to them knowing them uh knowing what you can tweak to improve those numbers um are all things that will materially impact your business significantly more than just saying I need to find find New Leads um these are the levers that uh that a seasoned loan officer can pull and make make incremental Improvement to in order to material impact um you know how much business they're doing and ultimately how much money they're making and you can start to make decisions uh based on you know what the those impacts will make to the uh the income scenario whether you're you know a company owner whether you're a sales manager whether you're a loan officer uh so uh apparently we shared this out with you um I hope that you play around with it I hope you find it useful I find it pretty useful um and in closing um you know if if you wanted to see what our Solutions look like scan the QR code send us an email you know we can talk through kind of what we see from our clients uh in terms of what they're seeing uh in terms of those conversion percentages and what people are doing to improve them it's a tough Market out there right like the idea that we're just going to be drinking from this Firehouse of of leads um certainly isn't the case any longer um so uh you know doing a better job with the leads that we have is is uh a worthwhile Endeavor so appreciate your time uh you know connect with me on LinkedIn send me an email scan the QR code um love to connect with you to talk about things more anything else you'd hope I'd cover on me nope you hit it all right we appreciate your time guys uh four minutes over so apologize for the going a little long-winded but uh you know there's anything we can help you with please uh you know where to find us thanks guys see you later