The One Secret Business
Strategy That Never Fails:


Article by: Doug Perry

Is there such a thing? Yes, there definitely is, and savvy mortgage business owners who have finally discovered the elusive ingredients of this well-kept secret don't want you to know about it.

Ever wonder why some online mortgage companies seem to flourish, even when rates are high, yet others cant seem to pull together a few closed loans from their online leads in a month's time when rates are low? What could successful mortgage brokers and lenders be doing that you're not?

The answer is, plenty! And they're not about to tell you what it is. The truth is, they have developed a unique strategy for their online business that is separate from their brick-and-mortar business strategy. They treat their online business like a completely different business endeavor. Why, you ask? Because they have figured out that the brick-and-mortar business model is just not an effective business strategy for the internet.

Let's take a look at some of the major reasons why this is true. Most newbie online brokers seem to think along these lines: "After all, borrowers are borrowers, aren't they?", "They still want traditional loans with traditional lenders, don't they?", "I get my share of the local business now, so when I put up a web site, I'll get my share of the internet business too", "I'll just let my brother-in-law put up a web site for me and my business will be up-to-date with toady's technology."

Not exactly! To think this way is dangerous, and costly. Here's what you need to realize about why you need a different business strategy for your online mortgage business:

The Players Have Changed:

First, believe it or not, you are largely dealing with a totally different kind of clientele. Yes, they are borrowers, but borrowers of a different breed. They know that they can get almost anything on the internet, and get it now. Most online borrowers are pretty internet savvy as far as being able to research and compare loan offerings on the internet. Plus, since the refi-mania of '92 - '93 borrowers are much more educated about loans than ever before. They're more 'aware' about the loan process now, especially on the internet.

The Internet Has Changed:

The internet is now an accepted (and in most cases desired) way of doing business. The internet is more user-friendly to the average borrower. Online borrowers are looking for the hottest thing since sliced bread - the next new advancement in technology ("Better technology means a lower rate and a faster approval with less work"). Online borrowers in general are younger, smarter and willing to experiment on the internet, yet the average age of borrowers willing to apply on a secure online form is steadily going up. So, you have a continually widening age group of online borrowers who are willing to give the internet a try.

The Times Have Changed:

Two years ago there were surveys done that suggested that 67% of all borrowers who started to fill out online applications for loans never clicked on the submit button. Now I hear that over 90% actually submit. These are quickly changing times. If you are unwilling to change with them, you may not survive when times get hard or when rates go up. If you're not up to speed with today's technology, how far behind will you be when the next technology change takes place?

Today, borrowers research and apply online from the comfort of their own homes. The application information is downloaded into the brokers loan origination system. The broker electronically submits the loan to the wholesale lender through Fannie Mae or Freddie Mac and gets an approval with conditions. The borrower is immediately notified of their approval. And all of this is done in a matter of minutes. How ready will you be, and how expensive will it be for your company to make the next change when the online loan process gets even faster?

Your Mortgage Competition Has Changed:

Much of your mortgage competition has already changed with the times. They now have in-house computer and internet technical staff (IT people). They are set up on networks and some have their own server computers and full-time server administrator. They have online marketing budgets and ongoing online advertising campaigns. They are sending themselves, their staff and their loan consultants to company-paid computer/internet classes, marketing training seminars and time management courses.

Your competition has computer hardware, software and web sites that take applications, monitors their time, reminds them of closings, special occasions and appointments. They have online help and live chat applications on their web sites for the borrowers' convenience. Some of their software is even being developed by the broker or in-house IT crew. In fact, this is where most of this great new software the mortgage businesses are now using comes from!

Why do they do all of this?

Because online borrowers demand it! Because online borrowers expect it. In the long run, it is much more efficient and cost effective. It attracts an untapped borrower resource they wouldn't have had otherwise. This is the direction the mortgage business is taking (like it, or not). The internet is the medium that levels the playing field for all mortgage brokers.

Ask any of the self-help guru's or make a note of the one underlying successful ingredient found in "How To Get Rich" seminars, books and tapes. Many wealthy entrepreneurs have followed this one single rule to achieve true success and great wealth. What is this secret ingredient? "Find out what successful people did to achieve their success, and do what they did."

You can't get rich by taking a class on how to be wealthy from an instructor who only makes $60,000.00 a year. In the same respect, you can't have a thriving online mortgage business unless you emulate those who are already successful online.

So what's the one secret business strategy that never fails? It's simple: Find out what successful online mortgage people are doing and do what they do!

If you find out other successful mortgage companies are using a supplier of quality mortgage leads, use that supplier for some of your leads. If you realize your competition is getting great results from their online software, use similar software. If you find out that a certain advertising campaign is working for other mortgage companies, launch a similar advertising campaign. In short, if you find out what other mortgage companies are doing to be successful, do what they do.

Suggestions to help you succeed:

1) Develop a unique online business strategy that is separate from your brick-and-mortar business strategy. Treat your online business like a completely different business endeavor. Keep separate books if necessary. Keep in mind that this new endeavor should not interfere with your ongoing mortgage business, it should enhance it.

2) Develop new relationships with trusted, internet-savvy contacts that are familiar with the mortgage business to explore what will be needed to get you up to speed in the mortgage/internet world. This should cost nothing but your time. If someone wants money to discuss possibilities with you, run away - find someone else.

3) Become an internet sleuth. Learn how to find what you need on the internet through search engine tools. Information about everything is everywhere on the internet. Take advantage of what the internet has to offer. Research is the key to online success. Become familiar with your own computer and what its capabilities are. If necessary, take a course. Research your competition and visit their web sites every week.

4) Update your web site to provide the following minimum features:

  • A brief introduction to who you are on the front page. Don't claim you have the best rates, or how long your company has been in business or how successful you are. This is ignored as advertising hype anyway. Your visitors don't want to know how great you are, they want to know what you can do for them, so tell them. Visitors also like colorful graphics and/or pictures. Your web site should look like you are in business for the long term. It shouldn't look like your brother-in-law made it in his spare time.
  • Easy access to your online loan application from every page on your web site. Don't make your visitors hunt for it and don't make them fill out qualifying screens or pick programs and rates to get to the application. These types of online application systems annoy borrowers. Under no circumstances should you charge for taking the application. There should be no up-front fees of any kind.
  • Mortgage information reports specific to the types of loan programs you offer. These should be easy to read and designed to educate your borrowers. The less technical, the better.
  • A few colorful online calculators designed to be easy to use and easy to understand. You don't need 10 calculators on your web site.
  • Contact information (including physical address, email address and phone numbers) should be included on every page. Your 800 number should also be listed because potential borrowers outside your area shouldn't be forced to pay for the call while inquiring about a loan.
  • There are many more enhancements available to make your online visitors' experience a memorable one, but these are the essentials.

5) When you are comfortable with your knowledge of what needs to be done, consider beginning to hire some in-house IT personnel (preferably with mortgage and programming knowledge) for your internal software and hardware systems. Also think about searching for a good customer service representative experienced in internet marketing and advertising campaigns. I don't suggest you outsource these positions for three reasons - One: You will need constant contact with these people and have them available to do your bidding as the need arises; Two: Their livelihood depends on your success and how well they do their jobs, so the result you experience will be well worth the investment; and Three: Ultimately, these are going to be your key people who will train your existing and future staff as your business expands.

6) Build from within. As the online part of your business grows, your need for additional personnel for both your online and off-line businesses will increase. If you don't have an in-house internet staff to begin with, you won't find it easy to grow your online presence when the next technological advancement presents itself. Use your internet staff to cross-train your existing lending staff. Computers and the internet are here to stay, so train everyone to use them.

7) Take the internet seriously. Believe it or not, the visitors to your web site have seen thousands of web sites. They have developed a perception of who is serious and who is not. They will be able to tell just by viewing your web site if you are serious or not. Most mortgage web sites are a disaster. Links don't work, calculators don't work, no graphics, misspelled words, lousy navigation, no contact information, no email address, etc.

8) Create your own identity. If your web site is a template that looks just like 600 other mortgage web sites on the internet, your visitors will know what's on your site because they probably visited another site just like it. Usually the only thing that changes on a template web site is the name of the company, the colors, contact information and button graphics. Is this a good representation of your company? If you get a template web site, make sure you can edit it yourself. Make sure you can upload your own graphics. Make sure you can have your own staff work on it. Make sure it is expandable so it can grow with your business. You will still have to pay the monthly fee for the template and hosting services, but you will have the versatility you need to really make it reflect your company image, and at a cost you can afford.

It's time to get down to the business of promoting your mortgage company on the internet the right way, the successful way: Find out what other successful mortgage companies are doing to promote new business that ensures their success and do what they do. This is the one secret business strategy that never fails.


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Doug Perry is the developer of a large number of mortgage lending web sites and is currently President of Click1003 where he develops Interactive Online Mortgage Application Software that integrates into all major loan origination systems for the mortgage industry. Doug is also President and Managing Editor of Mortgage Marketing Online, a web site devoted to helping the lending industry learn and apply marketing techniques to their online and offline lending businesses. As a loan consultant and California Mortgage Broker, Doug served eight years originating loans in California.

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