Wednesday, October 29, 2008

What is the most effective method for driving traffic to a mortgage website?

We conducted a research study to determine why borrowers visited a mortgage web site, 69% said it was through word of mouth referral. 54% said they visited the site as the result of television advertising. Newspaper and radio advertising attracted around 35%. Online banner advertising came in at a mere 29%. These numbers may not be reflective of the overall market but it does make the point that driving traffic to your web site through old-fashioned marketing may just be the best approach.

Start by establishing links from other local web sites that may direct qualified traffic to you. Focus on various sites that aggregate consumer traffic. Create a local referral business network and get listed in your local region within the major search engines.

Is it possible to build an online business inexpensively?

To answer this question you must define what “online business” means to you. What will you expect from your online efforts and how will your internal operations support these initiatives? Will the technology be developed in-house or will it be outsourced and what infrastructure will be required to support your online efforts? Remember, “Doing business online and running an online business are two very different things.”

Fortunately, technology companies in the marketplace have already made the investment of running an online business and specialize in providing technologies for you to build your business online and yes, you can have access to these technologies that allow you to “do business online” very inexpensively relative to the cost of developing these resources and “running an online business”.

Is a website the best tool for promoting my mortgage business?

The answer may depend upon how your company is structured from the beginning but for the most part, a website should be a supplement to the way you currently promote your mortgage business. It should not be relied upon as the primary source of your company’s promotional strategy. You should focus on extracting value from your website and carry that value over to your existing or new promotional strategy. Your web site should complement these efforts not work against them. For example, your web site may improve access to specialized company services, provide more convenience and increase your speed of loan approvals. Identify how your web site builds value and promote this!

Your mortgage website should be much more than a Place out in Space!

In fact, right now we are experiencing a paradigm shift in the way we view a web site in our industry. For most, a web site represents a graphically enhanced page constructed with information about our company and product offering. Typically we view a web site as a process that is first created then published to a server for the entire world to see. Functionality of a content rich website is typically limited and static. Once the site is published it must be re-modified then published again to reflect these changes. This simple process is called web publishing.

Recently, management studies have come to view organizations from a new perspective: a systems perspective. What is a systems perspective? Some systems may seem quite simple while others can become quite complex. An example of a complex system is the human mind, social systems etc. Complex systems such as the mind are comprised of numerous subsystems that are all organized in hierarchies, and integrated to accomplish the overall goal of the system. A pile of grain is not a system. If one removes a grain seed, you’ve still got a pile of grain. This analogy can be carried over to a web site. If you have a web site consisting of static web pages and remove a web page, you still have a static web site. Creating a web system requires a means to an end and a solid answer to the “why?” question.

So, what is the difference between a web site and a web system? Web systems are designed with an overall strategy or goal in mind and may interact with several of your existing business processes, strategies, and systems to accomplish this goal. Think of it like this. You may have a web site that merely presents the public with information about you or your company as part of your advertising, image building or marketing system. The reasons and the way you do things to accomplish your goal “is” your system, the web site is only a subsystem of that hierarchies. Now, take the next step in understanding the power of the web site and you will realize that the web site can be a system in itself that accomplishes several goals, all of which complement your overall business strategy.

This is starting to sound a bit overwhelming so let me simplify it. Publishing a web site is simple and there are many web site publishers out there. Publishing a web site is typically inexpensive because all it requires is that you create a design or take an existing one, insert content (text, graphics) then FTP (upload) the pages to a server. Once the web site is published the work is complete.

Designing and creating a web system is much more complex and expensive because developing a system takes into account all of the hierarchies required to meet the goals of the system and typically requires both technical and physical interaction with others. When considering a systems approach, it is important to consider the impact the Internet is having on the Mortgage Industry. The more the industry becomes entrenched in the Internet, the more important a systems approach to a web site becomes. When we take a look at the mortgage industry today we find that the Internet is now being used for many things including underwriting, automated appraisal, credit report delivery (almost all LOS software orders via the web), communications with investors, borrowers, real estate agents, title companies, delivery of documents, imaging, process flow management, investor rate sheets and automated program and pricing discovery. Not to mention lead generation, point of sale application taking, pre-qualification and email communications. It is obvious that the web site is rapidly becoming an essential part of the business process.

Another major difference between a web site and a web system is that web systems typically recognize larger patterns of interaction rather than focusing on just one aspect of the company and customer experience. Rather than just focusing on the web site as an online brochure, it takes into account the online application, the security of such, the individuals within the organization that will work with the new borrower, how they will pre-qualify the borrower, when and how the processor will interact and what the borrower experience will be with the company, what this means to the initial originator or person responsible for customer follow up, and prospective referral business. The web system may take into account many existing business processes and may answer many of the technical aspects of this systematic approach by providing access to credit reports for prequalification, automated underwriting and pricing etc. Simply put, this type of web system becomes more of a “tool” for the company rather than just a simple web site.

The benefits of using a web system can be realized across the board within today’s mortgage company. From the prospective of the loan originator to the closing department the work flow process of web systems can influence productivity and profitability. You will usually get much more value for your money when you invest in web systems that address or meet specific needs within your organization whether you develop these in-house or seek out a provider of these types of web technologies. Remember, systems tend to seek balance with their environments while systems that do not interact with their environment tend to reach limits.

When seeking out a systems approach to your web site solution you should be looking at companies that typically focus on providing a well rounded web site and backend data integration/management solution. Take into consideration the ability for the web site to meet the needs of the organization or provide a strategy that will have a positive impact on the organization. The company should focus on providing these services to the mortgage industry and they should have both technical and industry experience and a large customer base of at least 1,000 customers nationwide. This is typically an indicator of how well their solution answers the needs of the mortgage professional.

The Internet may be the "most important" tool for mortgage professionals

The Internet may simply be the “MOST IMPORTANT” tool for the mortgage professional today.

Think about it. What other form of media anywhere is totally interactive? When you place an advertisement on the radio, your borrower can only “hear it”. When you place an advertisement in the newspaper, they can only “read it”. When you place an ad on the television, they can only “see it”. When you advertise through the Internet, the environment is completely interactive. Your client can actually transact business with you! What a powerful concept.

Why does the Internet work so well for the mortgage industry? You will find the answer in two parts. First, most mortgage related forms are standardized throughout the nation. This makes a huge difference when it comes to technology. Basically it is easier to automate an industry that uses standardized forms and data formats, and in the near future this will be enhanced with the complete acceptance of the MISMO standards. It is much easer to exchange data within an industry that adopts standards. The second reason is that consumers are using the Internet to find homes, purchase merchandise and yes, even apply for a home mortgage loan or refinance.

Recently the Census Bureau of the Department of Commerce announced that the estimate of U.S. retail e-commerce sales for the second quarter of 2004, not adjusted for seasonal, holiday, or trading-day differences, was $15.7 billion, an increase of 23.1 percent from the second quarter of 2003 and this is only for one quarter! After analyzing the trends since 1999 we are finding that consumer purchases online are on the increase and are at the highest point since the Internets inception. How many of these shoppers would qualify for a mortgage loan?

So how does the Internet measure up for you as a mortgage professional? When does it make good financial sense to take a serious second look at what the Internet can do for you?

Lets think of your Internet use in terms of Return on Investment (ROI) If I could promise you that you would earn a rate of return of 120% on the stock market would it make sense to invest? Does that sound too good to be true? But if it were, would you consider it? Of course you would. But before you made your decision you would probably want to do some research to confirm and validate your choice. Perhaps you might do some comparisons with other investments, or you may simply roll the dice and give it a try.

I am not saying that you will earn a 120% return by using the Internet within your business but consider the idea… What if you could?

Here is a definition for ROI. A term describing the calculation of the financial return on a business policy or initiative that incurs some cost. ROI may be measured in terms of a payback period for the investment, or as a percentage return on a cash outlay, it may also included staff moral, productivity and loyalty, and may take into consideration cost savings as a result of the investment- there are many different ways to calculate it. Ok, based on this definition you must incur some cost but you need to measure your return over a period of time and you need to consider several other variables in your calculation.

Here are 10 items that you must factor into your ROI calculation when comparing the Internet to other marketing opportunities.

1. A transactional website enables you to be “open” 24-7. How much business do you miss when you are “closed for business?”
2. You can establish links from other websites in your community. How many visitors will visit your site from these links? And, how many sites are they linked to, who in-turn may lead prospects to your site?
3. You can purchase keyword site visits from Google and literally guarantee a certain number of visitors to your website. How many of these visitors can you convert to borrowers?
4. A transactional website can streamline your communication and approval process enabling you to cut costly alternatives. How much time will you save as a result of this?
5. A properly executed website strategy may enhance employee moral, company image and overall enthusiasm within the organization. How will this impact your employee work ethic?
6. A website enables you to compete with larger lenders marketing online in your community. How many loans are captured by these competitors as a result of you not being there to provide alternatives?
7. You can link your website to real estate agents, insurance agents and other affinity groups creating a value added service and a team approach that wins you new business both online and offline. How many more loans will you do annually as a result of this cooperative approach?
8. Consider any increase in productivity as a result of integration of your web address into any existing advertising, signage, and direct mail marketing campaigns. How many more people will visit if they see a web address?
9. Consider the cost of starting over. If you work for a company that markets online and you do not have an independent origination presence, you lose access to the links, leads and other web oriented resources if you leave. How much will it cost to reestablish these relationships?
10. What is the overall financial benefit you will realize years from now by working smarter rather than harder? How important is leverage to your overall business strategy? Consider the overall benefits of automation over manual.

Even after 11 years of dealing in the high tech world of Internet based loan origination, working with software programmers, designers, database architects, and enthusiastic industry visionaries I have learned one thing. Keep it simple and stick to the basics.

Remember, there is a reason why they call the Internet the “Super Highway” and as with any highway, if you do not have a roadmap to where you are going, you may never get there and worst of all you may spend countless hours and dollars trying only to be disappointed by the results. Well talk more about that in a later article, but for now, think about what the Internet means to you and consider how it can make a positive impact on your business, then take some time, conduct some research and confirm and validate your decision. It may be the best investment you will ever make!

You may contact David with questions or comments at: