Disrupting the Disruptors: Embrace Your In-Market Advantages

If you're already in-market, you are at an advantage. To prove this advantage, New American Funding conducted a test to see how call centers performed in comparison to in-market officers. Call centers converted leads at 5.5% while in-market officers converted leads at 12%. While call centers work, they do not have the same momentum as in-market officers and to stay in the lead, we must deploy the right tools, conduct research, and stay disciplined and focused during the disruption.

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So let's think for an example about some of these disruptors. You can't argue that most people start looking at properties using a tool like Zillow or Trulia or some of these other online shopping apps, Zillow is clearly the most popular. So they recently bought a mortgage company. They have an opportunity now to see if they can be as good as, or better, than we are at staying in front of these borrowers and they want to monetize that. There's a lot of models that are doing exactly that. They're capturing the buyers and they feel that they can gestate the borrowers better. We did a test a year ago. Zillow actually came to us and they said we'd like to provide you with leads so long as you'll distribute them evenly with your in-market guys and your call center guys, and then give us the reporting to determine how these leads progress over time. So we took them up on it, we wanted to learn too, and we started bringing in all these leads and distributing them out. Now, the call center guys converted the leads at about 5.5%, that's the normal conversion for a Zillow quality lead. The in-market guys converted at 12%. There's a great advantage to being in-market. This is where I talk about disrupting the disruptors. You've got the disruptors out there, think about it, Zillow didn't buy a company that had a bunch of branches everywhere. They bought a call center. Quicken is a call center. They don't want branches everywhere. There's other companies that really embrace that model because they know they can control it. And they're right, they have a more effective yield because of that control, but they don't have the advantage. I think that the in-market practitioner, both the real estate agent and the loan agent needs to start to appreciate the fact that they do have an advantage. You have an advantage if you're in-market. The problem is you have to change. You're going to have to rely on a layer of your business that involves finding these borrowers early in the funnel and be able to effectively work them. You have to embrace the fact that in order to do battle with the disruptors and win, you've got to play on their turf, and that is you've got to deploy the tools and the resources and the discipline to stay in front of these borrowers effectively because they will. And if you do, you'll win. You'll win more often than the call center. But you have to do it and in terms of the loan officer and the real estate agent, this is where it really gets powerful because now you've got 2 people that can tag team the borrower through this gestation process. But those tools need to include things that allow you to collaborate together. That's why we came out with our GoGo LO product for our loan officers so they can effectively deploy these communication strategies and deliver these marketing strategies to gestate these borrowers for 3, 6, 9 months or longer. Then we have GoGo Partner that allows the real estate agent to basically do the same thing and within the tools they can communicate to let each other know what they've done, when they've done it, who they've done it for. Another thing that we've done at New American Funding is all of our collateral we send out to these borrowers is co-branded. We understand the value and strength you possess when you're in-market and you're working with a referral partner who's also in-market to provide this level of service and continuity to these borrowers that you're then able to engage really early in the gestation funnel. All of our deliverables are co-branded with both the loan agent and real estate agent because we want to make sure that both are kept top of mind while the buyers are going through this home shopping self serving journey. That's how the in-market agents disrupt the disrupters I think very effectively going forward.