Converting Customers (instead of getting shopped)

Do you know how to effectively convert mortgage customer leads rather than get shopped?

The challenging side of high-volume mortgage markets is borrowers’ overwhelming focus on price in their decision-making process above all else. As a mortgage loan officer, it is your responsibility to shift your borrowers’ focus from price to value by focusing on what matters: benefits.

Enter the strategy on how to have deeper, more meaningful conversations with prospective borrowers to gain commitment to your service and relationship – and prevent rate shopping.

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Most borrowers are not looking for a relationship with their mortgage loan officer. So, from the very first interaction, you as their MLO must go above and beyond to help them see and appreciate the value of having a trusted advisor to guide them through their debt decisions – during one of the largest and most important decisions of their lives. A home purchase.

One of the most powerful forces in the mortgage industry is the inverse relationship between mortgage interest rates and lead volume—when rates are driven down, lead volume is driven up. However, the nature of those leads is tempered by the market conditions that bring them into the funnel. Low rates drive in borrowers who are committed to getting one thing – “the lowest rate”!

Rate is only one of several components of the price of a loan. As a mortgage loan originator, you will serve up a lot of business to your competitors if you do not condition your borrowers to focus less on rate—and more on benefits, value proposition and building strong relationships. People buy from professionals they like, and they can trust.

So what are lead conversion approaches to gain borrower commitment?

Do not talk about rates from the get-go, as it tailors immediately to a “shopper” mentality. Remember, the goal is to avoid shopper relationships. Avoid answering questions about costs, interest rates, APR, or price in your opening discussions (as many MLOs mistakenly do). Instead, initially strive to educate them on why they should choose you. Differentiate yourself from everybody else by creating a foundational mindset around trust, not price.

Rather than having the borrower control the conversation, ask you difficult questions, jump to early conclusions, and depart the opportunity—make efforts to control the flow of the conversation topics instead. After all, you will not know the final offer details to share with the borrower until you have an application in front of you that has been assessed.

Understand 3 Truths of Price Questions:

  • 1) When asked about rates, you cannot answer that on the spot until you have more detailed information assessed. Do not answer until you have their application in front of you and your analysis, calculations and conclusions are complete.
  • 2) No matter what happens, your quote is going to appear too high, and the borrower is going to object.
  • 3) Accept that sometimes you are going to get beat by competitors. There is always a lower lender. There is always a more enticing offer out there to hook a borrower. There is always somebody who is willing to try to beat you on price.

The key to not getting shopped on the front-end, is to avoid engaging in price conversations from the start. Take the time, up-front, to educate your borrowers on the value a mortgage can provide and build a strong relationship, regardless of the rate.

Get their early commitment and loyalty to work with you as their mortgage loan originator partner. Then afterwards, proactively address competitive pressures and assure them of the benefits you can and will deliver – through a personalized loan offer tailored to their unique financial situation!

By |2021-04-27T07:56:08-06:00April 26th, 2021|Financial Services, Mortgage|Comments Off on Converting Customers (instead of getting shopped)