I recently visited two direct lender shops for a warehouse FOCIS review study. These lenders generated leads from two different sources:  Radio and Internet

Overall the two companies shared similar lead conversion rates, paid the same amount for their leads, and L.O compensation plans were comparable.  There was one major difference between the two operations though, one shop originated 60% of their loan volume from their past client database while the "other company" did not.   Instead, their strategy was to convert new leads into new loans and move on after closing, they did not make an attempt to mine their existing pipeline. This is a trend we've noticed lately, most of the direct lenders we've visited are doing very little marketing to their existing database.

The company that followed up on their existing database originated more loans and was much more profitable than the "other shop".  How might these results be replicated?

  • Strategy:  Create a long term strategy to market to your data base.  Make sure everyone on the list receives attention
  • Technology: Use technology to manage a drip marketing campaign
  • Monthly email newsletter:  These are captured when the lead is generated. Make sure you have an email opt out
  • Outgoing calls:  Call previous leads and loans in your data base on a regular base.  Loan officer should be required to touch basis with folks often. 
  • Mailers:  Post cards and mailers on a regular basis

While there were a few variables that contributed to higher production volumes and greater profitability, the shop that dipped into their entire referral base had far less marketing costs and greater bottom line revenues and top line profitability. Each lead or loan they had already worked on created an opportunity to generate a new lead and potential new closed loans.