The lead to loan cycle of an Internet lead aka Distrust Mountain

by Morgan Brown

Mortgage Banker

Author website

My mortgage company works primarily with Internet leads — we’ve found it far more effective than direct mail, telemarketing or any other of the dying mass marketing techniques. We’ve developed and implemented systems and processes to effectively convert Internet leads in to customers and those customers in to repeat and (hopefully) long-time clients. As the marketing guy at our company I spend a lot of time looking at Internet leads and where and how we are converting them. I look at our successes and our failures and try to build marketing to support our chosen business channel.

I wanted to share with you all the lead to loan cycle that is typical with an Internet lead in terms of trust. Everyone talks about being a trusted advisor to your client, but what does that mean and really look like through the loan cycle? I’ve developed a (crude) graph that I show to all of our sales people to explain the challenges of working with a person who has solicited a refinance or purchase quote via the Internet. I call the graph Distrust Mountain.

While I’ve documented the Internet lead here, you can apply this with varying levels of correlation across all lead sources. It also does a nice job of documenting how much better referrals or repeat business are, because that initial hump is so much lower.

As an originator, when you first receive an Internet lead, you must understand that although that person has expressed a varying degree of interest in some part of the refinance or purchase transaction they haven’t expressed any interest in you or your company. When you conduct the first phone call you are faced with a very high barrier to earning the person’s business. You are calling them (one of four or five people) and soliciting your services. They may have talked to others before you and will definitely talk to people after your initial conversation. Their defenses are up and they are looking for any reason to not continue the conversation with you.

This is the most difficult part of the transaction for inexperienced loan officers. The ability to climb that first, nearly insurmountable, face of defense on Distrust Mountain is what separates the good loan officer from the average one who is struggling to earn a paycheck. I call it scaling the face. Scaling the face requires all sorts of special talents including building rapport, telling a compelling story, having a unique selling proposition, displaying excellence and professionalism, building on small commitments, and numerous others. The tactics for doing so is a topic for another post, but needless to say, that wall is there and needs to be scaled.

Once you’ve gained that initial level of commitment and the customer has agreed to work with you, either by completing a 1003 or turning in initial disclosures and income documentation — or whatever it is you consider early success — you still have a long way to go. If you do your job right you successfully meet commitment after commitment on the way towards the funding of the loan.

Each phone call returned, each action that occurs when it is supposed to, each reassuring communication and positive step towards the completion of the loan brings you down Distrust Mountain towards trusted advisor. The more obligations you meet on time and within the terms you first agreed to with your customer the more trust you earn and the further down the mountain you come. The faster and further down you come, the more trust you have and the less likely you are to lose the sale to someone jumping in to the mix after you’ve gained the initial commitment.

While I’ve stuck to the mountain metaphor here; another common way of looking at trust with a customer is with a bank account analogy. Every time you come through on your word you put money in to the account (and build trust), every time something goes wrong or strikes a dissonant chord with the customer you take money out (lose trust). The more money you put in, the more leeway you have for hiccups down the road. The less money you put in, the more likely you are to lose the customer. If the account hits zero, you’ve lost your customer.

Consider coming down the mountain in this graph as your deposits in to that account. You can take a few steps backward with any rough spot in the process, but it is up to you to descend the mountain as fast as possible to a trust-based relationship with your borrower.

The closer you are to the bottom — to the trusted advisor position so coveted — the less likely you are to lose your customer to outside competition. You have successfully won the customer and now you only need to continue meeting your word and deliver on your promise and you’ll have a satisfied customer with whom you can build an ongoing relationship.

One common place of distrust seems to occur at the signing. Perhaps the enormity of the transaction, the myriad papers to sign and the realization of the finality of the transaction tends to put the customer back on alert. Suddenly the fees that have already been agreed on become a point of contention; the terms of the loan look different when put under the angst-distorted lense of the signing process. Or perhaps, you didn’t do a great job up front gaining commitment — either way, the distrust creeps back in somewhere around here.

If you’ve delivered on what you said you would, overcoming this distrust bump is easy. A calm, educational phone call can stem the rising tide of anxiety. Being on-hand at signing, either via the telephone or in-person can help you navigate those final moments before the loan documents are executed. If on the other hand, you are still high up on the mountain of distrust and no where to be found at signing, you can assure yourself a non-signing and look forward to the potential of a lost customer.

It’s up to you as a loan officer to figure out how to scale that initial face of Distrust Mountain and then come down the back side as smoothly and quickly as possible by delivering on your promise. Navigate any moments of tension through education and clarity on the terms agreed to up front and you’ll be home free.

Internet leads are not the best source of business, but they aren’t bad; and while scaling that alpine face can be challenging and scary there is plenty of success to be had. How you scale the face and come down the other side is up to you — but it has to be based on delivering what you promised, when you promised it, and taking care of your customer the whole way through the process.