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Everything we know about the lead business from everyone at the Leads360 family. From online lead providers like LowerMyBills.com to Mortgage Lead Management best practices. We'll tell you what we know and what we've learned.  

The Conversion Conundrum

Wednesday, February 27th, 2008 | Link | Spread The Word!

When dealing with internet generated mortgage leads, the typical agreed upon conversion rate is between 1.5% - 2%. At this rate you can and should be profitable. Of course we’ve seen many clients that are converting much lower and we’ve seen some that convert quite a bit higher. One of the unique aspects of internet leads, in particular mortgage, is that they are often generated once and sold 3-4 times. This is pretty typical and widely accepted by the market. This practice however is the root of what I call the conversion conundrum. That is, even though the industry average for a mortgage lender to convert an internet lead is 1.5% - 2%, the actual average conversion rate of an internet consumer is actually 4.5% - 4.75%. That’s a 2-3% spread in the conversion rate. The reason for that is if a consumer goes online and submits their information as a lead to LowerMyBills.com for example. That lead is then sold to 4 mortgage lenders. Only one of those four companies can actually close that lead and if you calculate the conversion rate across all four lenders, it comes out to about 1.5% - 2%. But, when you calculate the actual conversion rate of that consumer, not taking into account which lender they chose, the internet consumer actually converts at about 4.5% - 4.75%. Interesting right?

Let me put it another way. If there is a 3% gap between conversion rates as I described above, what does a lender have to do to access that increase in conversion? That 3% is won purely by the behavior of the lender. In other words, the difference between the 1.5% and the 4.5% is the activity that a lender does when they get a lead. It’s about how fast they call that lead and how many times they follow-up.  It’s about what offers they give, what the loan officer says on the phone and so on. It’s all about the behavior of the lender after the lead has been given to them. That’s 100% controlled by the lender, not by the quality of the lead. So if a lender wants to reap the spread, they need to improve the behavior. That’s where we come in. We give our clients the tools and the training to get that extra 3% conversion and squeeze out the competition.

So, when we talk to mortgage lenders about conversion, and that’s really all they care about, we typically say shoot for 1.5% - 2%. But now, we tell them there is a 3% conversion spread just waiting to be grabbed. It’s all about what they do with the lead and we’re here to help them do it.

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  1. Very well put mr. Soloman. Say a lead is generated and then sold to 4 lenders vying for the deal. Odd’s are, one of the 4 lenders is going to get that deal making the conversion numbers look better as a whole for the internet prospect.

    The advantage that the big lenders have is that they spent millions of dollars on high priced systems ( Empower, Leads2Loans, etc. I have worked on some of them) designed to give them a significant advantage over the smaller lenders. Lead360 is here and we have leveled the playing field. We have made it easy and affordable for companies of any size to have the tools they need to compete in today’s changing market.

  2. […] LisanHWhen direction with internet generated mortgage leads, the typical allied upon change appraise is between 1.5% - 2%. At this appraise you crapper and should be profitable. Of code we’ve seen whatever clients that are converting much add and we’ve … […]

  3. Fha Reverse Mortgage…

    Lol, this is what it’s come down to these days, “I wonder what language…

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