As medical and recreational cannabis markets continue to explode across the US, the importance of implementing an effective local dispensary SEO strategy is greater than ever.
Not only is the demand for cannabis greater than ever before but there are also more people living their lives staring at their mobile devices than ever before, using Google, which operates on more advanced AI than what has ever existed before.
In order to obtain the online visibility your dispensary deserves, you are going to need a solid strategy and some time on your side (or know somebody that has both to lend you).
Let’s start with the basics.
What is Local SEO for dispensaries?
Local SEO (or search engine optimization) is the practice of making your business more prevalent in search results. Some of the tasks involved in boosting your online visibility take place on your actual website (on-page SEO) and others are to be done on other websites (off-page SEO).
Dispensary search engine optimization can be a full time job in and of itself. For the sake of saving you time and helping you focus on the good stuff, I’ve prepared a list of some of the most important search optimization considerations below.
The list below includes 8 of the dankest SEO strategies for dispensaries to ever bless the cannabis industry.
Verify and Complete Your Google My Business Listing
I hate to beat this horse to death, but it is too important and also overlooked to not say it again. According to research from Chitika, 92% of searchers pick businesses on the first page of Google’s local search results. Additionally, Google drives 96% of local search traffic, according to research by Jody Nimetz Co.
Hopefully this drives home the importance of taking this Google My Business business seriously.
So, here is how it works.
Google displays the top 3 local search listings for all searches that imply a person may be looking for a local business. This includes cannabis dispensaries.
My local search for ‘dispensary near me’ returns the following Google search results.
The ideal situation is to get your Google My Business Listing consistently positioned in the top 3 listings as frequently as possible. With the stiff competition in the cannabis industry today, this is easier said than done, but it is possible if you cover all of your bases, or at least hire somebody that knows how to and who has done so consistently.
Make Regular Posts on Your Google My Business Profile
Having your Google My Business Profile set up and completed is not enough.
This is different than making posts on your social media pages because it has a real and direct impact on the visibility of your Google My Business listing in local search results.
Google wants to see that you are actively providing value and engaging with your customers and, when you show them you are doing that, they reward you in the form of additional visibility on Google’s local search results.
To access the ‘Posts’ feature, log into your Google My Business dashboard and find the menu on the left side of the page. There is a button that says ‘Posts’. Go there, and share content that will be visible to searchers that click on your GMB profile.
In some cases, you may also find content suggestions on the home page of your Google My Business dashboard. Look around for a section that shows what other similar businesses are sharing in your area. I recommend using this only for a reference point. Don’t steal content you find there.
Use Guerilla Marketing Tactics to Obtain Free Media Exposure
Guerilla marketing is the practice/strategy of using non-conventional means to obtain attention from the masses. Guerilla marketing is one of the most powerful marketing tactics known to all of humanity. It can also be one of the least intuitive and in my experience, the best ideas cannot be forced.
This little stunt gave him a spot on all of the local news stations. Keep in mind, he is also an attorney. As a dispensary owner, this particular stunt would likely not have been as well received. I am not suggesting that you go copy off of him, or for that matter, do anything illegal. Guerilla marketing is about being clever in a way that makes people pay attention, not about vandalizing or destroying any personal/government property.
Use these examples of Guerilla marketing tactics which have been used by business owners in other industries, to come up with your own ideas for your dispensary.
Set Up a Custom Website With Original Content, Images, and Video
Most people seem to be under the impression that a website is important for a business to have because it will drive new business if it is designed correctly.
The reality is, this is only partially true.
The fact of the matter is that all of your local dispensary SEO efforts will be amplified exponentially when you have a domain name and an effectively-designed dispensary website to point all of the various directory listings, social media pages, and everything else back to.
One of the primary contributing factors to search engine optimization is in this idea that some websites hold more power or ‘link juice’ than others, and ideally, this is because they have established, time-tested, trustworthy content.
When these trusted websites link back to yours, it tells the search engine that the likelihood of your website being credible and relevant is significantly higher than it would have been otherwise.
In other words, yes, having a custom website for your dispensary is absolutely essential, but if the situation is simply approached with the idea that having the website will be enough, then you are likely to be in for a disappointment, and mostly crickets, when it comes time to launch it.
Organic search engine optimization strategy for dispensaries comes down to providing original, valuable content in all shapes and sizes. Create quality, original content on a consistent basis and ensure your website meets the quality and ranking factors considered to be important to Google and there is a good chance you will be on the right track.
Create, Complete, and Update Social Media Pages on All of the Major Social Media Platforms
In order to maintain a consistent image, there is no way you can realistically cover all of the social media platforms that exist today. You are going to be much better off in terms of your time and return on your efforts if you just pick 2-3 and remain consistent with those.
My personal recommendation would be to remain consistent on Facebook, Snapchat, and Instagram.
If I was going to add 3 more to the list, it would be Pinterest, Google+ and Twitter, however, there is some fairly simple automation that can be used to update those pages with content you are already sharing on the other platforms.
IFTTT (If This Then That) is one of the easier, free automation tools which you can use to create content automations between most social media platforms. You can also use it to automate your home lighting, television, sound, thermostat, etc… if you are into that kind of thing.
Link All of Your Social Media Pages and Directory Listings Back to Your Website
This may seem elementary of me to mention, but you might be surprised to see how many dispensaries go through the trouble of setting up their social media pages, only to never complete them.
My advice is to keep a document or spreadsheet somewhere, listing all of your social media profiles and directory listings, and manually ensure that all of these pages are complete with links pointing to your website.
It isn’t fun but it is important.
Plus, if you can’t find the time to do it yourself, you can always hire somebody like us to handle your local SEO and social media management for you.
Maximize Your Organic SEO Results By Consistently Creating High-Value Multimedia Content
Step outside of your comfort zone (or hire somebody that will) to create videos, images, blog posts, reviews, silly stuff, crazy stuff, and anything else that might give value to, amuse, impress, or at least distract potential customers from their day to day lives.
Effective dispensary SEO used to be about knowing the sneaky SEO tricks that would get you ranked just by using the right words and tags throughout your content the right amount of times, then linking back those pages from every SPAM website under the sun. Today, many of those same strategies will just get you blacklisted by Google.
Today you have to get creative and the only way you are going to be able to do that is by having fun with it.
Spending on legal cannabis worldwide is expected to hit $57 billion by 2027 (Forbes)
The largest group of cannabis buyers will be in North America, going from $9.2 billion in 2017 to $47.3 billion a decade later (Forbes)
Sales of medical and recreational marijuana are going to reach $4.75 and $6 billion in 2019 respectively. By 2023, both forms of marijuana will be higher than $20 billion before hitting $24 billion in 2025. (Statistica)
Medical marijuana sales are expected to account for between $5.9 billion and $7.3 billion in sales in 2022. Meanwhile, recreational weed should tally between $12.1 billion and $14.8 billion in sales that year. (The Marijuana Business Factbook)
Since the passage of SQ 788, making Oklahoma medical marijuana legal for licensed medical patients, I have shifted my digital marketing focus primarily to serve cannabis industry business owners.
The objective of this article is simple. Navigating the world of dispensary marketing can be overwhelming. This article simplifies the entire situation for you, allowing you to focus on improving the areas of your business where you will see the greatest returns on your time and investment.
As a digital marketing professional, I get to help business owners do more of what they love doing by doing what I love doing. Creating this guide is just one of those ways. Let this dispensary marketing and growth guide pave the way for your dispensary’s success in 2019 and beyond.
This group is highly valuable to you, as a dispensary owner, because many of Oklahoma’s medical patients are on here giving feedback about local dispensaries.
Many of them complain or make recommendations for improvement. If you are not a member of this subreddit, you should join right now, and make a point to look through new posts on a daily basis (or hire somebody like me, to do that for you).
Not only does this subreddit give you a pulse on the Oklahoma cannabis market, but it also gives you the opportunity to engage with customers and to promote your business (which I recommend doing, but go easy on it). business.
If you have never used Reddit, I highly recommend sticking to the OKmarijuana group. Reddit can consume your life if you are not careful.
You will get the same value out of this that you will get from Reddit, however, there are a few reasons you may find Facebook to be slightly more or less valuable.
For one, on Facebook, you can see exactly who the person is that is making a post or replying to yours. On Reddit, there is a layer of anonymity as alias names are used.
There are pros and cons to this. Sometimes people will be more transparent when they know their personal name is not tied to what they are saying. You can sometimes get a better idea of how people REALLY feel on Reddit. Whereas on Facebook, there will always be a hint of censorship as people can clearly see who is talking.
Unlike the other resources, which are groups to join, with the OMMA, you simply want to make sure you follow their page.
For bonus points, you might consider changing their post visibility so that you see their posts first. Sometimes they post updates which are directly relevant to your business and there is no sense in not clicking this simple button to ensure you don’t miss out on any major industry changes that affect your medical marijuana business.
To do this, visit the OMMA’s Facebook page, and make sure the checkboxes indicated in the image below are checked.
‘See First’ and Notifications – ‘On’
Now, you will see posts from the OMMA prior to seeing anything else on your newsfeed.
#2 – The Fundamentals: Cover Your 3 P’s (Product, People, and Pricing)
Before we get into specifics of the digital marketing and business optimization strategies you can (and should) be using to optimize your cannabis market share, we need to cover the fundamentals.
“All compromise is based on giv and take, but there can be no give and take on fundamentals. Any compromise on mere fundamentals is a surrender.” – Mahatma Ghandi
Additionally, ask any of the most successful NBA and NFL coaches of any time over the past 100 years and they will tell you the same.
Fundamentals are everything when it comes to success. And your business is no exception. It all starts with your product…
Sourcing Cannabis Product
If your business is closer to one of the larger cities in your state (like Oklahoma City, for instance), sourcing quality product should not be much of an issue. Dispensaries located in the more rural areas of the state are starting out having greater challenges finding suppliers, as many of the growers are maximizing their efforts by targeting metro areas.
There are several ways to ensure you are carrying the best products and to ensure, with a relatively significant degree of assurance, that patients will purchase the products off of your shelves.
If you are looking for suppliers, post in the groups mentioned above, in section 1 of this article. Be sure to get on email lists for all of your favorite growers (if they have them). I recommend building a simple spreadsheet with supplier names, contact information, license numbers, cities, products, pricing, etc. I personally had some great feedback mailing a postcard to every registered grower on the OMMA list and directing them to a landing page to learn more about their business. If we end up working together, I am more than happy to help you source product.
Prioritize quality over getting the best deal. It doesn’t matter how cheap you can sell flower. If it’s not any good – you will never be able to sell it and your customers are going to complain on Weedmaps, Reddit, Facebook, Google, and everywhere else.
Survey your customers to learn more about their preferences, or at least encourage them to speak up if there is anything specific they would like to see you carrying. Facebook is one great way to poll your customers and keep them engaged in conversation with your brand. If you use a POS system (hopefully you do), that would be a great place to take notes about your customer’s preferences, look at their past orders, etc… so you can talk to them about how they liked their previous purchases. Not only will this increase customer satisfaction by keeping products in stock that your customers are specifically telling you that they want, but it also makes them feel all warm and fuzzy to know that their personal input was taken into consideration when you made your purchase. They will also likely be more inclined to purchase from you – since they had a say I making it happen.
Make sure every product you purchase includes laboratory testing from a legitimate lab in your state. Here in Oklahoma, patients seem to be coming to the industry with a heightened awareness of health considerations. Patients need to know what is (and what is not) in every product you offer.
Attracting and Screening the Right People (Employees)
Finding quality people is one of the most challenging considerations for any businesses – particularly for marijuana industry businesses.
Here are some important questions to ask, prior to digging into the market of eligible employees.
How do you (personally) differentiate between quality candidates and people who just want to get high? Does it make any difference to you?
Do you even want to hire non-patients?
Is it more important that the candidates know how many grams are in an eighth, ounce, or pound or would you rather teach a newbie?
Do you want somebody who is familiar selling pot on the black market or somebody who is not familiar, that you can show the ways?
These are all important questions to ask yourself prior to hiring, and the truth is, there is not a single, correct answer that will work for every business. Once you define your most ideal candidate, structure your application and interview questions specifically to help you efficiently identify your most likely quality candidates.
I recommend adding a ‘We’re Hiring’ page/form to your website, which allows applicants to answer some customized questions and upload their resumes. You never know when you might need additional help, and sometimes you have to screen through quite a few before finding quality candidates. It’s best to get this set up ASAP, if you have not done so already. (or we can do it for you).
Offer Competitive Cannabis Pricing Without Losing Your Shirt
With tools like Weedmaps, this one can be tricky, however, there is a solution. By providing your customers with a consistently high-quality buying experiences and cannabis strains, you can easily overcome the feeling that you need to have the lowest prices in order to maintain consistent business.
Below are a handful of ways you can approach this pricing situation – which is only going to become more important as the market continues to mature.
Include tax with your pricing. While this might make you appear to be more expensive to customers shopping you on Weedmaps, it will be a pleasant surprise when they do. The alternative to this is obviously to not include a tax on transactions, which instead, provides a slightly negative experience when your customers are checking out. It’s always better to plan to surprise your customers rather than tagging on extra cost at checkout.
Use a cashless ATM to process payments (generally a flat, $3-$4 charges which may be passed onto the customer). Include that transaction fee in your pricing, assuming that everybody will be using a debit card, then offer the transaction fee as a direct discount for customers that pay with cash.
Consider creative ways you can add value to every transaction. Maybe stock up on half gram prerolls or edible sample packs to give away as surprises with every transaction. This will leave your customers with a positive feeling when they leave your shop, they will be much more likely to tell others about their experience, and there is a much greater chance they will come back to buy whatever it is you just gave them a sample of.
Evaluate and optimize your customer’s buying experience and make improvements everywhere you are able. Keep Starbucks in mind when you do this. Starbucks has some of the most expensive coffee but they also have some of the most loyal customers. It’s not about the price their customers are paying – it’s about the experience they have when they buy it.
Here are some questions to help you get the experience optimization process started for your dispensary:
Are your employees wearing uniforms or lab coats?
Are your budtenders wearing gloves every time they handle product? (very important)
How can you cost-effectively improve the vibe of your shop?
Are you cleaning your shop consistently?
What kind of music are you playing? Is it at the right volume?
How does it smell in your dispensary?
Consider burning some Santo paolo to neutralize the marijuana smell naturally.
Is the temperature comfortable?
Are your products displayed in the most professional and interactive manner possible?
Are your customers being greeted in a way that makes them feel comfortable without adding pressure to their experience?
#3 – Optimize Your Digital Visibility
In today’s day and age, the key to obtaining new patients/customers is to attract their attention in the right way at the right time, online. Maximizing your visibility is essential because the more visible you are, the more patients you are going to attract.
For the sake getting the most bang for our buck, we can safely cover our bases so long as we have the following digital channels covered – listed in order of importance.
Set Up a Strategic, Responsive Website That Accurately Represents Your Business.
Dispensary websites don’t have to be an expensive undertaking, however, you don’t want to cut corners when it comes to this particular component of your dispensary marketing efforts.
For the sake of the local dispensary SEO domination you are about to embark upon with the help of this article, your dispensary website can be most effectively viewed as a central hub in which all of your other directory listings point/link back to.
Some of the features I recommend including on your dispensary website:
A page for potential employees to apply and upload their resumes
A page for potential processors to share information about their business, license information, products, pricing, and contact info
A page for potential growers to do the same
An ‘About Us’ page telling the story about how your marijuana dispensary came to be
A ‘Contact Us’ Page which includes your hours of operations, a contact form, your phone number, and an image of your business
Patients visit Weedmaps to shop and if you do not have a complete profile, patients are highly unlikely to find you.
You will have to call Weedmaps to get your business listing set up. As of the date of writing this, all Weedmaps dispensary listings are free for Oklahoma dispensaries. There is absolutely no reason why you should not be taking advantage of this situation.
Optimize Your Google My Business Visibility
Many of the patients/marijuana consumers in your market are going to simply use Google to find you.
Your Google My Business listing is free, and provides you the best opportunity to get discovered by new patients looking for medical cannabis dispensaries near you.
To set up your Google My Business profile, visit Google My Business and make sure you have created a profile for your business. Once you provide the basic details about your business, Google will need to verify the information is accurate. Most of the time they do this by mailing a postcard to your business. Once you receive it, you will need to follow the instructions on that card to make sure it is verified.
Once you have a verified listing, the next step will be to optimize your visibility/positioning to new and existing patients/customers looking for a dispensary on Google.
Although Google keeps their ranking algorithms proprietary, there is a method which I have used consistently to rank businesses in the top 3 local Google search results, which is where you ideally want to be. Studies have shown most searchers will visit one of the top 3 local businesses they see in their searches within 24 hours of searching.
How to Dominate the Google My Business Rankings
Step 1: Verify and complete your GMB profile.
Use original images. Choose ‘Cannabis’ as the business type.
Provide your hours of operation, a link to your website, a phone number, and everything else Google wants to know. The more you give them, the more likely they will be to show your business to potential customers.
Step 2: List your business’ Name, Address, Phone Number, and Website, Consistently, Across All High-Quality Local and Industry-Specific Online Directories.
These listings are called citations.
Another significant GMB ranking factor is the volume and consistency of your business citations across other relevant/high-quality online directories.
Hear me out here as I’m about to give you the secret sauce.
There are 2 categories of online directories: Local and Industry-Specific. You need to be in as many of each, as possible (only high-quality, though).
The local directories are going to be sites like YP.com, BBB.com, Yelp.com, etc… These are websites that are designed to provide information about businesses in a specific local area.
The industry-specific directories are going to be any and every credible cannabis dispensary directory you can find.
Here is how you go about finding all of your local and industry-specific directory listings.
Next, scroll down the first 5 pages or so, making a list of every site that appears to allow you to create a business listing (citation) on it.
After those 5 pages, do the search again, this time for ‘Marijuana near me’… Then keep adding to your list.
Next, you want to visit each one of those directories and create a complete listing for your business, using the exact same spelling, syntax, etc… as your Google My Business listing. This is extremely important. If your address is spelled with an St. on Google, spell it the same on every one of these other directories. Also, be sure to include a link back to your website on every single one.
This can be a slightly monotonous task. You can always this work out, also. (Hint, we can manage all of this for you.)
Step 3: Provide Well-Written, Valuable, and Relevant Content on Your Website.
Your ranking on GMB is significantly impacted by the quality of your website and the relevance of the content on your website to the search being conducted.
Be sure to include custom content on your website. Use custom images, make sure your website is mobile-friendly, that it loads quickly, and it’s easy to navigate using a mobile device. (This is also something we would be happy to help you with.)
Step 4: Gather Real Reviews from Real, Satisfied Customers.
Gather real reviews from real customers on your Google My Business profile. To leave a review, the customer simply needs to pull up your Google My Business listing (the way it shows up when you search for it), then click on reviews. The user will then be given the option to submit a review.
You can get a good feel for approximately how many reviews you need based upon the profiles of your top competitors in your local market.
Build a Loyal Following and Engage With Your Customers on Facebook
The trick to running a successful dispensary page on Facebook is to share engaging content that is relevant and interesting to your followers.
I personally create a calendar for the month and plan out the types of posts that I will be generating on each day of the month. Not only does this help me get more work done in a much more efficient way, but it also helps me to plan and strategize the voice/message that we are using as we speak through the brand.
For my clients, I generally break the posts up into these categories: advocacy, humor, polls, promotional, random/off-the-wall viral stuff, and images of medicine – maybe through sharing images our growers are posting on their pages or by taking some original shots of our own.
The content plan you implement should be in alignment with your overall business branding.
I recommend scheduling out your posts, at least for the week. That way you don’t have to keep messing with it unless you just want to. I’m all about finding ways to minimize and reduce redundancies in my work, and this is one of the ways of doing that.
You should always use an image with every Facebook post, whenever possible. The engagement stats show clearly that users engage with image posts much more frequently than they do with text-only posts.
Canva is an excellent, free social media/image editing website which allows you to use your custom images and customize them with text and anything else you desire. I highly recommend checking it out.
Build a Loyal Following and Engage With Your Customers on Instagram
This is fairly straightforward and is definitely worth doing. Since you already have custom images you are sharing on your facebook page, share them also on Instagram.
In recent years, many Facebook users have made a transition over to Instagram. You will be unable to capture the attention of these customers unless your Instagram game is on point.
There are 3 primary components to running a successful dispensary instagram page:
Complete your profile, including a custom description, your address, website, phone number, logo, etc…
Post engaging, informative, funny, and entertaining images (preferably original). Pro tip: Instagrammers like pretty bud pictures, especially ones you have in stock and available for purchase.
Identify the most beneficial hashtags for your particular market and use those consistently, with every post. Check out this list of the top 21 tools for instagram hashtags (many are free) to help you compile a list of the most beneficial hashtags for you to be using.
Follow and engage with your customers.
Establish a business profile on Leafly (optional).
Leafly is significantly more expensive than Weedmaps (which is actually free for Oklahoma dispensary owners right now) but it does have its place.
Here’s the deal.
Leafly has the top Google ranking for nearly every kind of marijuana strain out there. This generates a significant amount of traffic – no doubt – but, as a medical marijuana patient myself, I personally prefer the Weedmaps dispensary locator over the Leafly setup when I am interested in making a purchase.
As a patient, I personally find Weedmaps easier to use. I still use Leafly, I just use it for strain research – as do most others.
Additionally, most people are not shopping for specific cannabis strains. In my experience,most customers want to come in to the dispensary to check out the inventory at the shop and make a decision from there, not the other way around.
If you do decide to get in with Leafly, I am sure the investment (a few thousand $/year) will more than pay for itself if you use it to its full extent.
Just be sure to upload your entire menu and complete your profile to your best abilities.
#4: Simplify Your Transactions and Minimize Cash on Hand
Since SQ788 passed here in Oklahoma, I have been diligently researching all different kinds of merchant and ATM solutions to help my clients implement solutions that make life easier on customers making purchases.
As a result of these efforts, I have identified the 3 different ways that dispensaries are going about helping customers/patients experience seamless transactions.
Provide Easy Access to Cash With an ATM Machine
The first of those methods is to purchase or lease an ATM machine that dispenses cash to your customers who don’t have cash on hand. If you set up an ATM with transaction fees, you are charging your customer to do business with you. Sure, it is a convenience over not having one, but it still takes away from your customers’ buying experience.
Additionally, having the additional ATM cash on hand poses additional security risks to your business.
ATM’s can (and do) work, but I couldn’t help myself but ask, “is there a better way?”
There are a couple, actually.
Pre-Paid Rewards Cards… At the Potential Cost of Customer Loyalty
One of these systems works on a pre-paid rewards card system, where customers upload cash onto cards that can be used to make purchases in your dispensary.
Since Visa and Mastercard refuse to knowingly process medical (or recreational) marijuana transactions, these pre-paid cards provide a means of circumnavigating that entire system.
Instead, customers upload money onto their card, then the money on that card is deposited into your bank account. While there are aspects of this system which appear at first glance to be advantageous over the ATM, there are also some downsides.
Many of the companies that offer these services have programs that incentivize your patients to buy throughout their network of dispensaries. Essentially, your patients are, in some cases, driven to your competitors because they are also using the card system.
The question with all of that becomes, “How are you supposed to go about establishing customer loyalty when customers are being offered incentivized discounts and promotions to use their cards at competing dispensaries?” It’s a question worth asking/investigating prior to jumping into anything.
The ideal system would make it easier for customers/patients to use their debit card, allowing for a simple, hassle-free transaction, that does not incentivize them to take their business elsewhere in the future.
And I just so happened to find one.
Make Life Easier on You and Your Customers With a Cashless ATM
Cashless ATM transactions work similar to normal ATM’s, however, rather than withdrawling physical cash, the money is digitally withdrawn from the customer’s account, and deposited directly into your bank account.
Here are some of the advantages I found for using cashless ATM’s for your cannabis dispensary business:
Accept PIN-based transactions.
Give your customers the convenience to withdraw money in your store when they make their purchase.
No operating costs. No credit or debit card fees.
Earn money on each approved transaction.
Does not require merchant to change from current bank.
Eliminate cash from sales transaction: savings cash handling and management, reduce risk of employee theft when you have cash on hands
Quick, easy approval setup. No integration with POS system necessary
That’s about all for now! Check back for updates, as this is an evolving work in progress. As always, please feel free to reach out if you have any questions or if there is anything I might be able to help you out with.
Updated September 2018 – Let me preface this article by clarifying that reverse mortgage leads are the exception to this situation, as reverse mortgage prospects are not using the loan as a means of closing on a home. This makes the window of opportunity much wider to capture reverse mortgage prospects. If you are seeking reverse mortgage business, skip this gigantic article and get right to the September 2018 good stuff.
You’ve searched high and low to find a consistent supply of high-quality/exclusive mortgage leads but your mission continues to fall short.
With every new attempt returning more of the same, your optimism leads you to hope that you are one more attempt closer to finding the holy grail of mortgage lead generation.
Maybe this sounds familiar. “I’ve tried generating leads with IDX websites and the leads were crap. I’ve paid Facebook lead generation companies to generate leads and it didn’t work out. I’m starting to wonder if high-quality mortgage leads are even a real thing or if this whole situation is some kind of mythical Sasquatch.”
If you have never run a single Facebook advertising campaign, simply replace the ‘Facebook ads’ with whatever means of advertising you have tried in the past. The reason they all fall short is essentially the same – across the board.
Whether you have actually run any advertising or not, there is a wealth of mortgage business wisdom to be obtained with the information I have to share with you today.
I’ve generated many thousands of mortgage leads using both Facebook Ads and Google PPC ads, and if you have hired me for Facebook lead generation, there is an apology in order.
While I do feel that I made a valiant effort to emphasize the right way of handling the leads generated with Facebook ads, which is to use them as a resource for building referral relationships, I don’t feel that the message was clear enough.
In taking a step back to re-evaluate the entire situation. clarity has emerged.
With that in mind, let’s take a look at the 5 ways mortgage leads generated with Google ads eat Facebook leads as part of a balanced breakfast.
1. Google ads enable you to deliver a specific solution to a specific intention/question/problem.
Facebook advertising is designed to target a specific audience based on their demographics/interests/behaviors.
Google search network advertising is designed to target people making specific searches at the exact moment they are ready to receive information. Having that information handy, it’s best practice (and expected) that you will utilize the searcher’s intent to craft your landing page content specifically for that.
If somebody searches for ‘lowest mortgage rates in Idaho’, this is not where you want to show them ads or landing pages talking about ‘fast and easy online prequalification’. You could definitely mention that, but it should not be the focus of the page. It would be an even greater mistake to run the ads to any pre-existing page on your website that has not been optimized for AdWords conversions specifically.
Google’s objective is to show relevant information to searchers. They even rank the ads based on the ad copy/landing pages/overall situation being directly relevant to the search.
If your ads and landing pages are not directly relevant to the specific keywords being searched for, you will be (and may have already been) witness to the fastest way to waste an ad budget ever created. It’s not the right way to approach this situation.
Leads generated with Google Adwords have shown a specific buying intent immediately prior to seeing your ad. They are looking for a solution to their mortgage financing right at that moment, but they are looking for it based on the type of search they are making.
2. High-quality borrowers are not spending more time than necessary shopping for home financing. Your window of opportunity is equally narrow.
Let’s talk briefly about a hypothetical family with a sizable bank account, consistent revolving credit lines, and zero credit issues at all. Your dream borrower.
If they do not have a pre-established relationship with a mortgage loan originator they trust in a meaningful way, how do you suppose they will go about finding one?
Or better yet, here is a hint/question. When was the last time you helped a family obtain a mortgage in a situation where nobody used search engines?
This Pew Internet survey from 7 years ago (most recent I could find) showed that 92% of internet users used search engines to obtain information. It’s fairly safe to assume that this number has increased since 2011. There is no way to use a mobile phone these days and get around using a search engine. That’s the world we live in.
Combine that wisdom with this research from the Consumer Finance Protectiontal Bureau, “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal.”
Now let’s throw in the CFPB’s 2,000 pages of regulations, a shorter attention span than ever known to the human race, concerns about personal data leaks, concerns about getting SPAMMED to death for the next five years, and concerns about the impacts of multiple credit inquiries on credit, and you have a perfect storm.
People have changed the way they do everything. Shopping for mortgages is not fun. High-quality borrowers are not interested in spending any more time on it than they have to. And they are not.
The reason your lead generation efforts continue to fall short is because you are not reaching borrower prospects who are searching.
If high-quality borrower prospects obtained information about businesses using the old school Yellow Pages book, we would be having a different conversation.
The mortgage process is, after all, the least fun aspect of the entire homebuying process (other than possibly moving).
High-quality borrowers who know they can get the best rates are looking for financing they can live with. Something that allows them to get their family into their new home and move on with their life. That’s it.
This makes the window of opportunity to catch a prospect at the right time extremely narrow. As narrow as a single moment.
Since Facebook ads are not displayed based on specific behavioral timing (such as conducting a search), you might as well be playing the high-quality mortgage lead lottery. And even if you do find them, how is offering information about downpayment assistance or hot deals on the market going to help you find borrowers that have selected homes already and who have money for a downpayment?
If you want to get leads using a Facebook campaign, you cannot assume that anybody has found a home, because the vast majority have not – and will never. Its a basic choice between zero leads, crappy leads, and righteous leads – and the choice is yours alone.
If you have a $20 sunglasses business, we are going to have a completely different conversation. Almost anybody can be in the market for a $20 pair of cool sunglasses at any moment in their life. The timing is not so important.
Facebook leads for Realtors can even be effective because Realtors generally have a wider window of opportunity. In fact, our entire Facebook mortgage lead generation strategy was based on the idea of generating leads for Realtors in an effort to establish a referral relationship. And if the leads are used in that way, they CAN work. It’s just not a short-term strategy.
After all, people can be house hunting for two years without having even talked to a Realtor. Unless they have significant problems, they are not spending two years finding a mortgage.
Google search network ads ensure the timing of your information is always delivered at an appropriate time.
3. Since the relevancy and timing situations are corrected with Google ads, you can get paid back faster.
For example’s sake, let’s say you’re a mortgage broker and you are looking for mortgage prospects which are planning on & capable of closing on a home loan in the next 60 days.
Since Facebook users have not shown any specific buying intent, the ad must be delivered with a very low perceived threat level. Considering a very small percentage of any audience is going to be in a position to close on a home in the next 60 days, we are disadvantaged from the very start if we run Facebook advertising to get mortgage leads.
If you want to connect with people, you have to give them something to help them in their situation. If you start telling people about your fast and easy online mortgage pre-qualification you are going to scare them – nobody wants to get a mortgage and when they are on Facebook they are not looking for one. You’re scaring them!
Two often-effective Facebook mortgage advertising strategies include offering exclusive access to the best deals on the market (delivered through a Realtor) and offering information about government assistance programs.
Since both of these approaches assume that the prospect has not already found a home or has not researched enough to know about these programs, you can safely scale realistic loan closing timelines to match.
These leads can be used effectively but in order to do that, you must be prepared to focus on generating referrals for insurance companies, Realtors, contractors, and anybody else.
Even if you decide to prioritize building referral relationships – it takes time. And you are not in a position to make referral demands in return. This is, after all, an indirect growth strategy.
The problem is that your window of opportunity is much smaller than every other service provider I just listed.
On the other hand, if you are running Google Adwords campaigns to generate mortgage leads, and your landing pages/ads/and keyword targeting are all optimized in the right way, your landing pages are linked to your privacy policies, you have a chatbot designed to engage potential customers, and you are good at what you do – prepare for an avalanche of high-quality mortgage leads, because that is how this works when it is done properly.
You will still get the occasional lead who has not found a Realtor, providing you the opportunity to refer them to one – but properly generated Google AdWords leads are going to be of a much higher quality in general. You won’t have to spend as much time strategizing a year of follow-up emails to each person, and figuring out how to do that in a way that doesn’t piss them off (good luck).
Google Adwords campaigns allow you to track your investment much more closely, scale it accordingly, and pay yourself back for your investment in a much shorter time frame.
4. Consider the quality and consistency of the market/audience data you are working with.
According to the Genworth Mortgage Insurance First Time Homebuyers Report, “Between 1994 and 2016, first-time homebuyers purchased on average 1.8 million single-family homes each year, accounting for over one in three of all single-family homes sold, and 45 percent of the purchase mortgages originated. “
That’s fine and dandy until we build a first-time homebuyer audience in Facebook ad manager consisting of people who live in the USA, excluding people who work in the real estate industry and those who own homes already. In doing that, our potential reach is 68,000. That’s a long way from 1,134,000 (63% of 1.8 million).
This implies that either the Facebook data is massively inaccurate and/or that somehow people who have been labeled as likely to be a first-time homebuyer, are also getting labeled as homeowners (also… inaccurate).
Google search network ads, in contrast, are shown when people are interested in your product/service, in their search results, before the actual search results.
5. Is the context/means of communication you are using appropriate?
Many people (including myself) are not prepared to make a large financial decision based on an ad that popped up on their Facebook newsfeed. Not everybody is me, obviously, but I would personally go out of my way to avoid the ad in order to keep somebody from soliciting me over a personal communication app, like Facebook Messenger.
Even if a prospect likes you, it would be wise to assume there will be at least one Google search conducted at some point along the way – and it’s likely to be right when they are ready to have a real conversation.
If you have not prepared a strategy for remaining in front of these prospects every few days, for at least a year or so, without bothering them (fine line to walk), how are you going to stay relevant in their minds when the right time arrives?
If anything, generating Facebook leads that are earlier in the process than they would ideally be, is more likely to take you out of the running than it is to keep you in it.
If you fail to seal the deal, they are likely to move on.
You could try snail mailing a refrigerator magnet to each one. It’s worth a shot. If you do, please let me know how that goes.
If leads generated through Google search are so much better, why does it seem like fewer mortgage companies use them?
Three primary reasons.
1. Google Adwords campaigns require more work to implement.
In order to run a Facebook ad campaign, you have to create a Facebook page, be able to navigate the Facebook business manager/ad manager backend, and understand the audience targeting.
After that, you are well on your way to generating lead form leads. You don’t even need an external website in place at all. Up and running in about 10 minutes, if you have an ad template that works.
On the other hand, generating leads using Google Adwords requires more work. Outside of simply running the ads to the right audience, Google uses a quality score rating to rank your ad among other keyword competitors.
In order to obtain a high AdWords quality score, your ad must match the intent of the search term. The landing page the ad directs visitors to must match the ad copy. You have to have a consistent, and highly relevant message.
Your privacy policies must be linked to your landing page. Your various calendar scheduling, email follow up, and chatbot creation/integration must be created and implemented accordingly.
This can create a large number of needed landing pages, relevant content, and corresponding tracking/conversion codes to follow the conversions and ad remarketing throughout Google’s display network avenues and even to follow people back onto Facebook with retargeted advertising.
One possible solution to minimize some of this is to use landing page personalization with dynamic page content, which adjusts the content of the page to match the ad link clicked on. It can also use a number of other knowable details about a prospect and change the page content based on that information.
The content still must be created and the dynamic pages still must be tested and set up.
In order to get an Adwords campaign up and running, all items mentioned above must be addressed, in addition to landing page design considerations, keyword metrics to decipher, domain name/website hosting situations to set up, a variety of thank you page/tracking code implementations, call tracking systems to integrate, and A/B tests to run on all of it.
I said the mortgage leads generated are higher quality, I didn’t say they were easier to generate.
2. Adwords campaigns can require a greater upfront (and even ongoing) investment.
Since the work required to implement the Adwords lead generation campaigns, the cost to implement has a tendency to scale accordingly.
In addition to requiring more work, people who are capable of and willing to do everything needed to run an Adwords mortgage lead generation campaign are much fewer and far between than those who can watch a quick Youtube video to learn how to run Facebook ads.
Google Adwords campaigns should start slowly, then budgets should steadily increase as results begin to come through. This is not a place to cut corners in regard to data collection, testing, etc… It’s also not a place to try and rush the results.
3. Like everything that is worth doing in life, this takes time. Most companies want to see something immediately. If you want something immediate, buy more leads from Experian and see how it goes. Maybe the 5th time will be a charm.
This is a quality of life issue for me. If you can’t afford to start running Google AdWords campaigns, do not start. Putting pressure on anybody responsible for your campaigns would be the wrong way to approach this. You want this person to be in the right state of mind at all times. Any additional pressure would be a mistake.
That said, you are going to be excited when results begin rolling in. That’s normal.
It’s not OK or normal to check in every hour for status updates. There is no amount of money that will make it OK, either (don’t believe so anyway).
‘Patience, young grasshoppa.’
– Mr. Miyagi
How are the top mortgage lenders generating mortgage leads?
The others are further down the list and are all included in this single report. This was the first one I ran, actually.
In fact, the lowest estimated Adwords ad budget, of all top 10 lenders specified, is Flagstar with an estimated $67,400 monthly Adwords budget. They also closed only $26 Billion in loans in 2016. Poor guys.
These companies are not blowing money on AdWords just for the fun of it. It’s also no coincidence they all appear in this SEMrush PPC competitor list.
They just have the resources to take a sip from the fountain of high-quality mortgage leads.
A couple detail disclaimers/clarifications.
All statements made here are, of course, assuming that a strategic keyword/ad/landing page analysis has been conducted and that ads/keywords/landing pages you put into place have been created with success in mind, based upon those findings.
You have to know what you are doing, or hire somebody who does. Otherwise, you will be witness to the fastest waste of an ad budget you have ever laid eyes upon.
If you go out and run Google PPC ads to your homepage or some other random page, do not expect better results. This is the most common AdWords mistake I see, and I see it more often than not.
Sure, both Facebook leads and Google leads are capable of coming fully equipped with prospect phone numbers, email addresses, and much more. Ultimately, the lead quality varies substantially between the two advertising channels. Particularly if you are in the mortgage business.
Also, for comparison’s sake, I am simply comparing Google Adwords search network ads to Facebook ads, and am assuming for the sake of personal sanity, that there is no prior Facebook Pixel / Google remarketing data which has been previously been collected to use.
If you are looking for somebody who has experience with every aspect of generating high-quality mortgage leads using AdWords and other PPC advertising, who has also been licensed as a mortgage loan originator and real estate agent, you found me. Feel free to reach out.
September 2018 - Reverse Mortgage Lead Generation Update
If you are looking for reverse mortgage leads, I have a system which is generating them for under $5 each (ad spend). The setup for the campaign is $1,000. I recommend a $500 ad budget for the first month.
This particular method allows for prospects to be called even if they don't answer any qualifying questions.
The ongoing maintenance, testing, and optimization of campaigns is $750/month.
This is only available in open states - Florida, Arizona, Illinois, and New York are spoken for as of the time I am writing this. I will be announcing slowly and strategically moving forward. There will not be an email blast, as protecting from an overlap between clients is essential to ensure ongoing success.
If you are interested in further exploring this please do these 2 things.
#1 - Email me and tell me you are interested in talking about this. Also, tell me where you are located and licensed.
If you do not originate reverse mortgages, your best bet right now is to run Google PPC campaigns. They require a variety of components and start at $10,000 including adspend. $5,000 minimum adspend per month ongoing. If you are not prepared to spend $20k/month on ads to maximize returns, I wouldn't even mess with it - honestly.
If you are a lender and you do not originate reverse mortgage loans but you are prepared for this type of investment into a high-quality lead generation system - feel free to reach out. I am fairly selective on new clients for these services right now, but it's worth a shot. Follow the same 2 steps described above, if this is you.
Before we get into (Facebook ad) campaign results, answer the following questions for yourself, truthfully. At the bottom of this page, you will find screenshots from a variety of our mortgage and real estate lead generation/sales funnel campaigns. If you are looking for the best mortgage and real estate leads, we have a solution for you
Don’t skip ahead. Answer these questions, first.
How many deals could you close if you had a consistent supply of real estate/mortgage leads to work with?
What difference would that make in your life?
How much time are you wasting by not having a steady supply of exclusive leads to work with?
How much more time would you have to spend with your family, go on vacation, or just relax – if you no longer had to worry about generating leads?
How much is it costing you by NOT having this type of a system in place?
Rather than spinning your wheels researching the topmortgage lead generation agencies and sales funnel strategies, you would be able to dedicate your work time to do what makes you money. Closing deals.
Take Your Business to the Next Level With a Revolutionary Mortgage & Real Estate Lead Generation System
You’ve heard legends of a system that produces consistent, exclusive, quality, affordable mortgage/real estate leads. But after all of the money you have spent on crappy lead generation systems, you reluctantly search for something that works, hoping it’s not an elusive lead generation unicorn that only exists in Narnia. You’ve tried Trulia, Zillow, buying lead lists, and maybe even live transfer leads. Nothing but frustration and an occassional good lead – but lots of money and time spent getting there.
In order to prevent prospective leads from getting distracted, there has to be a very specific message and call-to-action in place. The message needs to get straight to the point, encouraging the prospect to provide their information with a threat level to match the natue of the ad placement and the situation the potential prospect will be in, when they see it.
A New Perspective on Generating Real Estate Leads With Sales Funnels and Targeted Advertising
Rather than spending all of your time looking for a system that works, see the results for yourself below and consider yourself lucky to have discovered this. Once you understand how it works, we are here to help you take action to correct the course of your business.
Our highly specialized sales funnel and advertising specialists manage everything for you. They also manage campaigns for other mortgage and real estate professionals across the country, offering additional security knowing that everything is being tested and retested, in every way imaginable – giving you the most leads for your money.
You are also provided with a platform in which automated follow-ups can be used to implement an automated, yet personalized followup sequence for every lead that comes in. The system uses text messaging, email, and can even incorporate video into your customized followup.
From first time homebuyer leads to refinance leads, our real estate sales funnel solution is designed to provide you with all of the opportunities you need to close as many deals as you can handle. This is, in fact, the most effective mortgage and real estate lead generation/follow-up system on the market.
Below are screenshots of a variety of mortgage and real estate lead generation campaigns/sales funnels we have/are running for our clients.
Please keep in mind that the dollar amounts specified here are for the advertising expenses only, and do not include any setup or management fees. But, as you will see, this is still one of the most affordable mortgage and real estate lead generation systems out there. It’s also the most effective and produces the most quality, exclusive leads, for the money.
“Your assumptions are your windows on the world. Scrub them off every once in awhile, or the light won’t come in.”
― Isaac Asimov
Have you had the feeling that the mortgage business has become increasingly complicated over the past 5-10 years?
You put all of your energy into this business and ensuring you have the right team put together, but sometimes it feels like an uphill battle in every direction.
You have tremendous value and experience to offer borrowers but recruiting mortgage loan originators, generating exclusive leads, and closed deals feel more complicated today than it was five or ten years ago
Could it be that your perspective on recruiting mortgage loan originators and the state of the mortgage business needs a little scrubbing?
After all, hiring the right people and implementing the right systems doesn’t happen overnight. How are you supposed to create a mortgage closing machine when it feels like your loan officers keep falling short?
Something is off. You’re overwhelmed.
Your fingers are crossed that the next loan originator will break through. Hitting the quota would be great but if recruiting mortgage loan originators resulted in closing an additional 500 deals per year, your business problems would be solved. Unfortunately, the fear that this will be another turnover is far more likely.
What if that star loan officer is only in your imagination without having the resources in place to facilitate the success you are looking for? What if the loan originators you already had were actually more than plenty but they are simply spread too thin?
A Lesson About Asking the Right Questions, Borrowed From the Wealth Management Industry.
Life is all about asking the right questions. Tony Robbins has said that the quality of your life is determined by the quality of the questions you ask. Tony gets it.
I recently had dinner with a friend (we’ll call him Joe). He’s the operations manager for a branch of a fortune 500 financial services giant. This company recently began closing and consolidating offices from coast to coast. Joe’s future isn’t looking too bright.
Interestingly, the primary metric for branch performance has always been the # of advisers hired. Everything is actually based on hiring. Including all-inclusive company vacations to Cancun, bonuses, job stability, etc…
Under the heat of corporate collapse, Joe started to ask some tough questions. These questions enabled him to understand the nature of the issue. This understanding has slipped by the corporate executives for the past decade. It’s here to wreak havoc.
As it turns out, Joe’s company was measuring performance with the wrong metrics.
Joe’s branch has hired and trained 100 new financial advisers over the past 10 years. They pay new hires a non-recoverable $2,000 per month. 6 months guaranteed draw against commission. It’s the same arrangements I had as a loan officer except my employer took out taxes so they called me an employee. Joe’s office is full (empty) of independent contractors. I broke out of the draw setup the 2nd month licensed but that’s neither here nor there.
Joe knew most of the advisers they had hired over the past 10 years were gone within a year. But how many generated a profit for the company and how many were only an expense?
The picture isn’t pretty.
Joe found the company only turned a profit on 1 out of the past 100 advisers they had hired over the past 10 years. This individual hired several years ago, generated more revenue than the sum of the other 99. Additionally, had they hired 0 advisers, they would have been more profitable. It’s safe to call that a slight oversight.
Keep in mind, this is a Fortune 100 company. Their client acquisition model broke a long time ago. They train their advisers on selling to their family and friends. That hasn’t been working for the past 10 years. The company isn’t going under because they manage a whale of an investment portfolio. Mortgage brokers do not have the same luxury.
So much for 80/20. Try 99/1.
Sure it sucks to have the walls crumbling around you, but it’s even worse realizing that you have dedicated the past ten years of your life making the wheels of a broken business model turn.
Since financial advisers serve the same purpose for the wealth management industry that loan officers have in the mortgage industry, I couldn’t help but think that maybe this wasn’t an isolated situation.
The questions started rolling.
Could the same problem be running rampant in the mortgage industry? Are people still buying for the same reasons they were 10 years ago? Has Google made an impact on the conditions that lead consumers to make financial decisions? Is it time to reconsider the circumstances in which salespeople are necessary to hire?
Additionally, why would anybody invest or finance their home with their nephew just because they have a job now, anyway? It looks like they wouldn’t. Apparently, they would have a long, long time ago. Loan officer fairytales.
Doubling Loan Volume Requires Double the Qualified Leads. Not Double the LO’s.
Read it again.
If Joe would have known what he knows today back in 2007, he would have likely hired about 90 fewer people and focused the remaining time optimizing the resources those individuals had to optimize their ability to connect with other humans in meaningful ways. He gets it now. Hindsight is always 20/20.
If you are a loan officer, this information can be useful to you as well. It might be the calling you needed to figure out how to differentiate yourself from every other loan officer trying to beg Realtors for leads. It might be your calling to figure out where else your gifts can be of service to fellow Earth humans. It’s not all doom and gloom but it would be wise to prepare yourself.
In 2016 the US mortgage industry processed $2.065 trillion in closed mortgage loans. If every loan originator somehow made an equal split of that business, $4,130,000 would be there for each. This wouldn’t be near enough to support Indeed.com’s data.
Its safe to say as many as half (or more) are no longer necessary.
Or rather, advances in technology have reduced the time it takes to close a loan. It’s reduced the time quality borrowers spend looking for a loan.
More importantly, it has created means of connecting with people much more efficiently and relevantly than ever before.
With the right perspective and technology in place, companies can position themselves to dominate this industry in ways that Blockbuster Video could tell you all about.
And the beauty is, for the time being, the corporate giant lenders are missing the boat. You have the ability to create a human connection with borrowers in ways that they can’t. You don’t have the corporate red tape preventing you from making the changes you need to correct your course. They do.
Regardless of the accuracy of Indeed’s salary figures, there are far more LO’s than the industry can support. Combine that with digital loan processing, a short attention span, and ad technology and you have a very small portion of the brokers producing a very large portion of the business. And a whole lot of thumb twiddling.
A loan officer purge is imminent. You don’t need more LO’s. You need to figure out how to help the LO’s you already have become more. After all, how many LO giants have you ever stumbled into while they were looking for a new job? It’s unlikely you will find the best via their resume. And even if you do, what do you offer to their situation that is going to make them eager to jump on board?
You might be thinking ‘But this is the way everybody does it.’ And for the most part, as of December 14th, 2017 you are mostly right. But I work with several exceptions personally and If I was a betting man I’d take a step back, realize what is actually taking place with humans right now, and go all-in against the grain – while I still had the opportunity to optimize the situation.
“One of the biggest productivity killers is lumping together a mix of different responsibilities (such as raw web lead qualification, cold prospecting, closing, and account management) into one general “sales” role. This creates significant inefficiencies:
Lack of Motivation: Experienced salespeople hate to prospect, and are usually terrible at it.
Lack of Focus: Even if a salesperson does do some prospecting successfully, as soon as they generate some pipeline, they become too busy to prospect. It’s not sustainable. Any individual that tries to juggle too many responsibilities, will have a much lower ability to get things done.
Salespeople have a reputation for having ADD: How does adding more responsibilities help that? For example, qualifying web leads is a much lower value distraction for salespeople than managing current clients. And managing a large current client base is a distraction from closing new clients!
Lack of proper training and support: Their company doesn’t train them on how to prospect effectively, give them helpful tools or reasonable goals. Usually, the guidance is along the lines of “make more calls!” Wow, that’s helpful.
Unclear or Wrong Metrics: It’s harder to break out and keep track of key metrics (inbound leads, qualification and conversion rates, customer success rates…) if all the functions are lumped into single areas. Different roles make it much easier to break out different steps in your processes, which means better metrics.
Less Visibility Into Problems: When things aren’t working, lumped responsibilities obscure what’s happening and make it more difficult to isolate and fix issues with accountable follow through.”
Failing to plan is planning to fail. If you’re setting yourself up with a disadvantage, do yourself a favor and reconsider.
Recruiting Mortgage Loan Originators as a Lead Generation Strategy. Does it Work?
A report by C.M. “Corky Watts, CMB, paints an all-too-familiar picture of the mortgage industry. Below is a quote from a recent evaluation he conducted for a small mortgage shop in the Southwest.
“It was a “garden variety” mortgage bank with a net worth of around $1M, retail originations, small warehouse line with one bank and selling loans best efforts to three investors. Unlike many small mortgage banks, the CEO/part owner was not an originator; he managed the company.”
“One of the key findings I uncovered from my interview was the number of loans each loan officer funds on average each month. The company has 50 loan officer and funds an average of $5M or 25 loans per month (average loan amount is around $200,000K). Doing the math, each loan officer funds 1 loan every 2 months. Best case scenario each loan officer might generate $3,000 in gross commissions per loan, splitting it $1,000 for the shop and $2,000 for the agent. Each month a loan officer generates $1,000 and the company generates $500 from each loan transaction (this does not include fees and gain-on-sale).”
Does that sound familiar? If so, this information is for you. Mr. Watts goes on…
“I hope these loan officers have another job or a wife that has a high paying position. I also hope the mortgage banker generates 300 basis points in gain-on-sale and fees from each loan to help pay expenses and generate some profits.
I realize that many loan officers today are struggling to originate at the levels they did several years ago. The market, products, and regulations have changed dramatically, making it more difficult to compete and generate commissions. Many mortgage professionals have left the industry and more will in the future. I expect this shop has the 80/20 rule whereby a small number of loan officers originate 80% of the loans. Most of the 50 loan officers probably need to exit the business, either voluntarily or involuntarily.”
Mr. Watts is onto something. Introducing specialization at each point of the borrower’s journey could rock your world.
Enable LO’s to focus on what makes you money, what makes them money, and what enables them to be productive.
Let’s say the broker in the example has a monthly goal of 100 closed loans per month (4x their current situation). If they are still processing loans on paper, they are particularly ripe for change. If they were to immediately identify the 20 loan officers who will produce 5 loans per month – then invest in generating high-quality mortgage leads – they could contribute to their team’s success, save money, and improve morale. All in one swoop. Not to mention the creation of an environment in which LO’s are proud of their work.
With the right technology and back-end help, these numbers could multiply. And everybody would work 40 hours per week.
If you are an LO, keep in mind there are there are 502 active job listings on Indeed for ‘loan officer leads provided.’ Consider me to be the messenger that helped you make the leap. There are industries and companies out there who are willing to support your success. Don’t settle for less.
Change is never easy. Sooner is always better than later when it comes to making the necessary change.
Would You Rather Have 5 Loan Originators Closing 5 Deals Per Month or 50 LO’s Closing 1 Every 2 Months?
‘What’s the difference?’
About 45 desperate loan officers wondering around trying to figure out lead generation. They have to keep their lights on, after all. By narrowing to 5, the remaining LO’s would be happier & more enthusiastic. Desperate salespeople are not effective, regardless of what they do.
I’ll take a leap here. The ‘lead generation strategy’ used by the struggling brokerage mentioned above is likely pretty close to Joe’s. The failing financial advisory strategy relying on salespeople to generate their own prospects. If it wasn’t they wouldn’t be in that situation.
If it’s not already clear, now is the ideal time to stop hiring more LO’s to bring in leads.
How much is this costing you anyway? Get into the books and look it up for yourself if you have to. That’s what Joe did.
In my experience, most brokers are recruiting loan officers to boost sales. It’s easy to see why somebody would assume that some of the LO’s will generate enough loans to make it worthwhile.
Are the loan officers on staff closing at least 5 loans per month? If not, hiring should be the last thing on your mind.
You need more high-quality/exclusive mortgage leads, not more loan officers.
And hiring more loan officers to bring in leads is costing you money, peace of mind, and office morale. Not to mention, it’s a very ineffective round-about way of approaching lead generation.
90% of the time there is a shortage of quality leads – there are already plenty of people.
Relying on loan originators for mortgage lead generation actually silly. It makes as much sense as it does for any company to rely on people who don’t understand lead generation to be in charge of it. In the past, hiring LO’s was a reasonable way to reel in high-quality, exclusive mortgage leads. People used to have real relationships. Times have changed. Social media has changed everything.
If the LO’s do not have the experience they need to generate leads, it’s not happening. And very few have this experience or understanding. Lack of education, understanding, or training plus responsibility = frustration and desperation.
Even many of the lead generation companies out there, don’t actually know how to generate high-quality mortgage leads that close within 90 days. It’s not an easy thing to figure out.
At some point, the smart LO’s figure out that if they don’t have the financial resources to hire it out, they have to do it themselves. And if they are not already tech-savvy, we wish them well. It’s not one specific skill set. It’s a bundle. I recommend general advertising strategy, web design & development, and Google Analytics. Plus Facebook Pixel Integration, PPC advertising strategy, and social media marketing – for starters.
Let’s say you’re hiring loan officers with a Master of Business Administration degree from Notre Dame. They still won’t have the skills they need to generate leads to support their business. Sure they might know a couple things about finance, business management, and ‘marketing’. What does that do for you?
Marketing and lead generation are two different animals. They happen to have some overlapping features, like capturing and managing attention.
So, under what circumstances would it make sense to rely on LO’s, without the MBA, to generate their own leads?
Mortgage Marketing Has Changed But It’s Still About Connecting With People.
In the past, a half-page yellow pages ad could fill your pipeline all year. The problem is, people don’t pay attention the yellow pages anymore.
Personal relationships used to drive sales. Now, information (aka, Google) is much more available to borrowers. Establishing trustworthiness and expertise is still applicable. The difference is in the perception. Now there are many more ways to try to capture audience attention. , And just as many to try to capture/keep it.
Let’s look at some stats around how humans are interfacing with the world around them. Things should begin to fall into perspective if they have not already.
Facebook has 2.072 billion users. (Some context. Going into 2018, the population of humans on Earth is approximately 7.6 Billion – and nearly half of those don’t even have access to clean water. They probably don’t have access to the internet, either.)
People are so connected to their mobile devices, they are experiencing a sensation/phenomenon called phantom vibration syndrome. One study involving 290 U.S. college students found nearly 90 percent of them said they sometimes felt the phantom phone sensations, and 40 percent said it happened at least once a week.
Effective advertising campaigns, mortgage sales funnels, and mortgage chat bots serve many purposes. Not only do they generate leads but they also allow for more the collection of more info from the start. This enables LO’s to get more work done in less time as they can rank their leads by priority.
Where are your current loan officers spending their time? Are they spending their time doing the same thing you’re doing right now? Wouldn’t it make more sense to work as a team, save some time, and get on the same page? Let the salespeople close deals instead of wasting their time weaseling them. If you have to, let the participating LO’s split the investment. Make arrangements for round-robin style lead distribution.
Make them pay for it if you have to – that’s not the point. The point is having a plan for them to succeed. And that is where most are lacking at the moment.
If the financial industry provides any kind of a viable hint, consider a new approach. What is the worst that can happen? You help your loan officers by organizing a system for them to have exclusive mortgage leads and they don’t close deals, I suppose. They are
The ‘recruiting mortgage loan officers’ hoping that they figure it out is a system that might allow you to scrape by for just a little while longer. Enjoy it while it lasts.
Don’t Take My Word For It.
Here are a few questions to get you started. Answering these will help you determine the extent of the course correction needed. Question everything you don’t know certainly.
These questions may lead you to the conclusion that your course needs minimal correction, and that would be fantastic. But if you don’t answer them for yourself, you are assuming that’s the case. Ask the tough questions.
How much have you invested in the form of guaranteed draws against commission/salary payments over the past five years? Money, Time, Human Resources, Mental Health, etc..
How much company profit have those individuals generated?
Has recruiting mortgage loan originators proven itself to be profitable for you in the recent past?
If it has been profitable, how could that potentially change in the next 5-10 years? Technology is rapidly evolving all around us. If not, how much of a loss has it generated? And how else could that investment generate business through your existing team? Is the problem with the loan originators we are hiring or is it something else?
What could be done to improve the lives and job satisfaction for my existing team?
How can you help your team connect with people in real, meaningful, and valuable ways?
Is your training establishing realistic expectations? Do your LO’s have skill sets they need to meet the expectations of their position? Is there a more effective way to structure their role that might make sense to consider?
How could training be better?
Why are loan originators expected to generate their own leads? Is there a better way? Are there other industries that can be looked at for answers?
In reviewing the past 25 closed loans, why did the clients make the decision they did? Is there a way to optimize this kind of exposure?
Analytics and tracking technology, combined with ad targeting technology has changed the game. Today it’s possible to generate higher-quality mortgage leads and real estate buyer leads more consistently than ever before. Don’t be Joe’s crumbling wealth management company.