2019 promises to be a pivotal year in the digital transformation of mortgage lending. Leaders in this space recently examined trends that have the biggest implications for lenders and ways to address the evolving challenges of today’s home buyers. Matt Dowd, VP, Product Management of Ellie Mae moderated a discussion between Jeremy Bowling, National Sales Manager CDO, Union Home Mortgage, and Eli Schwarz, VP, Data Strategy, Jornaya, during LeadsCon Las Vegas.
- Digital Mortgage Experiences
- Generational Differences (Millennials, Gen X and Boomers)
- Communication Preferences
- Hi-Tech Hi-Touch Approaches
Highlights from the Panel Discussion
Matt: Considering recent research (outlined below) on generational preferences about the online mortgage process, do you think millennials are looking for a 100% digital buying experience?
Eli: We often assume millennials want a 100% digital experience, but we’re seeing the opposite is true. So, why is that? It’s because they’re making a major-life purchase decision, which is very different then buying a pair of shoes, groceries, or a one-click decision with Amazon. A mortgage involves a lot of consideration, thought, and research. It’s a big financial decision and, for a millennial, it’s often the first time they are making that decision—its uncharted territory. They’re looking for personal interaction or a trusted advisor to guide them through that process.
Jeremy: With millennials, they didn’t necessarily experience the industry meltdown, but they are aware of it and that’s where the trusted advisor role comes into play. I can promise you anecdotally, without running the numbers, that this age group asks more questions than any—and actually the average age of the consumer in the retail group is 38; in consumer direct its 46; and 49 on refinancing.
I’ve also called the baby boomers the baby bitters, because they’ve made the mistake of going online too many times, having to change their number, doing all these things—they are “been there done that,” I don’t need you to call me 17 times and explain how a mortgage works, or I just don’t want the marketing aspect of it, so I want a more digital experience throughout this process.
It’s turning on its head what other verticals are thinking about this generation. I love that the younger generation wants to stay connected and have that personal touch, is more cognizant of their debt, and is challenging us to think differently and not just think its push button and if we can figure that out we’ll all be fine.
Matt: We see that lenders as a whole are reaching out to millennials more than any other group (as outlined in the graph below), but millennials are saying it’s not enough. How else can lenders interact?
Jeremy: Personal touch! And the biggest reason why they need more touchpoints is that the cycle of shopping is much longer for a considered purchase. They aren’t going on Amazon, reading 5 reviews, and picking which Roomba they want. This is a big deal; they are very aware of taking on a burden of debt that will last 15-30 years. Within that cycle, you can automate—whether its digital or text—but you have to have that personal interaction, face-to-face, or video. There’s a critical aspect of nurturing the customer along their journey to solidify that they’re making the right purchase with the right partner.
Matt: What are loan officers doing to adapt?
Eli: Ellie Mae’s research has shown that 92% of borrowers conduct research online before they ever interact with a lender. This isn’t surprising—consumers like to research and educate themselves early in their consideration process before they engage with a person.
At Jornaya, we put this together with our customers to do a study of consumers who funded a loan. We looked back in time to determine what behavior we saw online in the months leading up to when they actually funded their loan. On average, we’re seeing the consumer start their shopping process and engage online 6-months before they fund (as seen in the graphic below).
In light of that time cycle, the loan officer has to be strategic in determining how they interact with and engage with a consumer throughout that process; and how to apply marketing automation to nurture the customer through that process.
Jeremy: No real estate agent or LO wants to hear, “Hey, I am 6 months out. I’m going to need a lot of your time, and eventually you might get my business.” But we’re no longer in a position to think that we can drive every aspect of a consumers behavior and we have to adjust to meet the consumer where they are in their process. Drip campaigns and very intelligent marketing automation is great, but you also need your LO’s to bring a personal aspect and align with the buyer’s situation.
Even in a strong retail, you’ll nurture a purchase for a month or two, especially in a seller’s marketplace. We used to think we did a great job, that we educated a customer in 60 days of nurturing and 90 days later they close a loan, and now its double. What we’re finding is that we may initiate some up front engagement, maybe 180 days out, but no one is doing a good job of having that personal interaction or full time engagement for that entire cycle.
Matt: With all the different communication methods (see graphic below), how can you ensure your LOs are communicating with the right borrower, in the right channel, in the right way?
Jeremy: It’s not a one-size-fits-all; the strategies have to change not only based on the customers shopping journey but also the process journey. Texts have been wildly successful and we also have a very passive call cadence.
You have to be strategic. It’s not about just about doing all these different things, it’s about doing them differently for each customer. So you need data to tell you what the customer profile looks like so you can vary the text, email, and drip message. That’s why our partnership is very important, feedback is very important, and from application all the way back to closing there are 18-25 touchpoints of communication for us and knowing what you’re doing and having success with each one of those consumers in their journey is wildly important.
Matt: Sounds like you need to take a very thoughtful approach for each of the potential borrowers you are speaking to. Do you see a shift from a lead centric approach to a person level approach?
Eli: There’s a shift in thinking within our industry. It used to be enough to design your approach around a lead: to focus on a single point in time when the consumer is requesting to be contacted. The lead is still critical, but more and more marketers are realizing that there are many different inflection points in the consumer’s shopping journey, and there are tremendous gains to be had if you can build a marketing strategy that meets the consumer’s needs across all of these critical points in time, not just when they submit a lead form. It’s important to figure out how to engage with the person holistically, instead of looking at that singular, more transactional view of a single point in time. The most successful, innovative customers we have are the ones who are focused on creating right-timed, person based marketing journeys that align with the consumers evolving behavior over the 6-12-month consideration process.
Jeremy: While consumer direct is still relatively new for my organization, it’s been successful for us. Whether that’s a text conversation, email, or phone, we know what to do with it from that point on. So the big challenge for us is establishing the engagement more strategically.
Matt: What are the differences between contact vs. engagement?
Jeremy: Speed to contact attempt doesn’t matter as much as we used to think, speed to engagement is what matters. What’s more important is the type of engagement, the time of day–aspects of that consumer behavior that give us data quality. The saying: “You’re either first or your last” is not true anymore. People have come to appreciate different contact methods.
Matt: Are you making that active engagement first over text, phone, email, or a combination of everything? Have you seen any significant improvement using one vs. the other and by the demographic group?
Jeremy: There’s no doubt, especially on purchased leads. We work with Softvu from the CRM perspective and more than 40% of our initial contacts on purchased nurture leads are some form of digital whether text or email. We want to get them on the phone from there. But, first the consumer wants to establish, what’s your schtick, what are you trying to sell me. We approach it from an advisory role, helping the consumer through the content of our messaging.
Matt: Do you tailor that depending on what you know about that person?
Jeremy: We definitely do, but I don’t imagine we’ll get to a point where I imagine we’ll want it. Because you can get so granular to the point where your message and the specificity behind it should connect with a person, not just for marketing purposes, you should be able to legitimately connect and pair them with the right loan officer and partner with that person based on all of the data you gather and get from our providers and other partners. We know a lot about our folks, you should be able to apply a lot of specificity and empathy to your leads whether you’re text messaging, or its your phone strategy or your email.
Sometimes the intricate way we’ve engineered Velocify from a status and action perspective gives me a headache. But I also understand we’ve done that because we’re trying to have a people first mentality, which is part of our company and culture, so we want to transact, we want to do business, and we want to market the way you want to be marketed to. That’s what we’re going after and we can never emphasize that too much.