Mortgage lenders have relied on CRM software for decades to maintain customer relationships and grow their business. But the software really comes into its own when the housing market stagnates and mortgage loans dry up. CRM software allows mortgage lenders to use the information they know about their borrowers to sell more products and win more business.
Want to learn more about why CRM software is important for lenders in today’s down market? mortgage orb We interviewed Jason Perkins, founder and president of Bonzo, a relationship management automation solution that reduces the time mortgage and real estate professionals spend communicating with prospects.
Q: Why is a CRM system essential for mortgage companies to remain competitive in today's mortgage environment?
Perkins: A mortgage company's most valuable asset is its data, and its second most valuable asset is its ability to use that data to drive sales opportunities. This latter quality is what sets a robust CRM system apart.
Because traditional mortgage CRM systems are used as data warehouses and not for marketing purposes, lenders cannot see the results from the CRM system, so there is a bias that all CRM systems are the same. However, modern technology is now available to digest the data that lenders already have and leverage it by directing sales opportunities to lenders' marketing and sales teams. This gives lenders a competitive advantage.
A robust CRM system also helps lenders build more meaningful relationships with borrowers. Marketing isn't rocket science, but if your financier just blankets all your contacts with the same message, it's just noise. But it's incredibly powerful when lenders have the tools to segment data and increase awareness by approaching customers in a contextual way based on their unique needs.
Q: How has digital marketing technology improved over the past decade?
Perkins: Five to 10 years ago, most CRM systems focused on email and didn't include text messaging, let alone video or social media. These days, if your CRM system doesn't have text messaging capabilities, lenders using it are missing out on a huge opportunity. However, it's not just the ability to send text messages that matters. Today's digital marketing technology allows lenders and loan officers to send texts from the recipient's area code, potentially skyrocketing open rates.
In fact, our own research shows that texts sent from local numbers have an average open rate of over 90%, while response rates are typically 60% to 70%. With e-mail, many people now consider e-mail to be junk mail, so it's lucky that the percentage reaches his single digits. This doesn't mean email has lost its value, but CRM systems can do more than just email.
Q: How can digital marketing innovation help mortgage companies meet the needs of today's borrowers and ultimately drive growth?
Perkins: Today's consumers are more digitally connected than ever, constantly checking social media, texts, and emails. Fortunately, new digital marketing tools allow lenders to create omnichannel marketing strategies so they can be available to their customers anytime and anywhere.
However, many consumers receive 10 or more text messages and dozens of emails a day, so there's a lot of noise to cut through. The same goes for social media. The average consumer spends about 4 hours a day on Facebook and Instagram, but these platforms also generate a lot of noise.
That’s why it’s important for lenders to contextualize their data. For example, a strong CRM system allows lenders to leverage existing data to create targeted ads and personalized text on social media, rather than sending the same message to all contacts. You're more likely to get a response. If lenders can strategically leverage different marketing channels and borrower segments with the right messages, they have a huge opportunity to turn customers into brand heroes and generate repeat business.
Q: How can lenders make their interactions with borrowers personal while leveraging digital marketing technology?
Perkins: The key is in the approach. At a basic level, all sales and marketing is about taking care of the customer. The problem is that most lenders don't know how to convey that sense of “care” at scale. With the right technology, you can use existing customer data to create customized messages that spark conversation and genuine interest.
Another important strategy is to be curious about your marketing efforts. Lenders shouldn't yell at customers about interest rates or what they can do for them. It never moves the needle. Lenders should ask questions and use the answers to those questions as an opportunity to further the conversation. With today’s digital marketing technology, this is very easy to do.
However, lenders also need to be aware of who owns the customer relationship: the loan officer. Lenders need digital marketing technology that amplifies loan officers' voices and allows them to capture more opportunities where trust is already built.
Q: Given changing consumer preferences, what specific features should mortgage lenders prioritize when selecting or upgrading a CRM system?
Perkins: The first thing lenders should do is ask their loan officers what marketing assets they really want and think about the capabilities they need as a lender. For example, if a lender wants to synchronize marketing efforts with her loan origination system, it's important to ask her CRM system provider what that integration will be like. CRM systems have all the features you need, but they're nothing if you don't leverage loan data and other existing data to drive the conversation.
Another important consideration is AI. AI is driving a massive cultural shift, allowing financial institutions to rapidly improve engagement with potential customers. Every financial provider should ask her CRM system provider for a roadmap for using AI, as AI is going to change everything in the industry. The bottom line is that if lenders don't constantly evaluate the value of their marketing technology, they'll likely be locked into a contract with a system that no one wants to use.
Q: With compliance challenges and data security concerns on the rise, how can lenders protect sensitive information and build trust with both customers and regulators in their marketing strategies?
Perkins: At the very least, lenders should constantly evaluate and re-evaluate their technology stack, especially the tools they use for marketing. Unfortunately, there is a widespread misconception in the industry that if marketing technology can do something for lenders, then it should be fine. But that's not necessarily true. For example, all major mobile carriers are now introducing filters that prevent the sending of messages containing certain conditions, and also require lenders to pre-register for marketing campaigns. If marketing technology providers don't keep up with these changes, and some providers don't, lenders could be wasting a lot of time and money sending texts that no one receives. There is a possibility that
Lenders should also ask their CRM system provider whether their system can help them manage compliance with the Telephone Consumer Protection Act and other state and federal laws related to digital communications. If a CRM system has text messaging capabilities but lacks permissions and brakes, including clear and simple opt-out options, lenders may find themselves in a bind.
As a digital marketing provider, our firm is constantly educating lenders on these issues. Lenders and loan officers place a lot of trust in digital marketing providers, so our job is to make sure they get it right.
