Additional Survey Details

Thanks to the leadcritic for highlighting the results of our recent survey. It’s fun to see that our inaugural blog post could generate such a great response!

To help clarify some of our numbers I thought it would be helpful if we walked through the methodology behind the data.

Some quick background:

• Results were compiled from a phone survey conducted in June 2007 of 224 mortgage leads from across the country
• Follow up calls were placed between 90 – 100 days after a lead filled out a formThe survey only dealt with non-purchase leads (Refinance, Debt Consolidation, Home Equity and Home Improvement)
• Our leads are sold to a max of 4 lenders. The average lead surveyed was sold 2.6 times
• The goal of the survey was to find out what happened once we sent the data on to our lenders

The leadcritic’s most important question was, “What happened to the 56% [of leads that did not end up closing within 90 days]?” We’ve discussed this a bunch in our office and come up with a few explanations based on customer feedback.

The most common responses from consumers in the 56% were:

• I decided to put it off
• I was just shopping around
• My credit score was too low
• I decided to sell instead

The results tell us that a good portion of the leads are just shopping around to see what’s out there. Additionally, one factor to consider is that these leads were generated in March & April of this year. Like most online lead providers, the majority of our traffic tends to be fair / poor credit grades. If we look back over the past 3-4 months, there are a lot less programs available for sub-prime borrowers than there were in the past. So, it’s pretty easy to see how some people simply didn’t qualify for any programs.

One of the really interesting things about the survey was who ends up closing the 44%. Our historical data shows us that large banks and lenders typically close about 1-2% of the leads. Smaller brokers who are experienced in working online leads can close about 5% of the leads. If that’s the case the numbers don’t seem to add up based on how often we sell the leads. Where do the other leads close? What we found is that even though people fill out a form online, a majority of them will still discuss their loan with friends / family and other lenders when deciding what to do. During our survey we asked people who closed “What bank did you use for your loan?” The two most common answers were Bank of America and Wells Fargo – two lenders who we don’t sell leads to have never sold leads to! Quite simply, even if people fill out a form and receive calls from lenders, they still want to shop around.

It’s more important than ever for brokers to do their best to insure that a lead closes with them and not the competition – whether it’s one of the other brokers who purchased the lead, or the local bank down the street.

The good news is that if every lead you buy has a 44% chance of closing! If you’re only currently closing 4% that means there’s tremendous potential. Make sure you can do everything possible to build a great rapport with the consumer. The opportunity is in front of you with each lead you buy. Make the most of it.

Get out there and close more loans!