Just 5% of mortgage brokers say that they’re bringing in enough leads for their business, according to new industry research.
Conducted by independent mortgage lead generator Wealthify.com.au, the Wealthify Broker Digital Pulse looked at how brokers were generating leads and growing sales in the digital era.
Wealthify CEO Darren Moffatt admitted he was shocked by the results.
“Lead generation is an ongoing challenge for any business of course, but I wasn’t prepared for the scale of this issue. Both franchise-group brokers and independents across the country overwhelmingly reported lead shortage as a problem,” he said.
“It’s an industry-wide epidemic.”
The survey found that 56% of brokers were “not receiving enough leads” while 39% could “do with more”. Only 5% were satisfied with the number of leads they were receiving.
The industry’s heavy reliance on referrals to generate leads was a cause for concern, Moffatt said, especially with the new wave of online brokers and lenders emerging.
Of those polled, 92% said they received leads from referrals. Facebook advertising came next at 34%, followed by offline partnerships (31%) and social media (30%).
“Referrals are great, and they’ll always be a big lead source. But in an environment where most brokers say leads are scarce, it’s worrying that more aren’t experimenting with alternative methods,” Moffatt said.
An aversion to technology and change in general was behind these latent trends running throughout the broker industry, he told Australian Broker
“Plus, a lot of people are technophobic – they don’t understand technology and it makes them feel a bit anxious,” he said. “The other key driver here is very basic: it’s money. Referrals don’t cost anything or at the most, brokers might have to do a revenue share with the referral source which they only have to pay after the loan is settled.”
With this in mind, it is understandable to see why brokers favour referrals, he said.
Even within this rapidly changing environment, brokers are reluctant to seek other methods of bringing in more leads because of the added costs, he added.
“This is becoming more and more of a problem for more and more brokers. It’s starting to bite a bit so people are looking at alternatives such as lead generation services and other things such as Facebook ads and social media.”
Even those who invest time and money into online campaigns such as Facebook ads are struggling to convert the spend into leads and then convert these leads into appointments and applications, Moffatt said.
“Understandably, a lot of brokers just don’t have the marketing skill for messaging, conversions, optimisation, landing pages and so on.”
“The anecdotal feedback we get from brokers is that it hasn’t worked for many of them. Some of them have had a bit of success but most brokers really struggle just to get a lead out of it.”
Aggregators and industry groups need to be doing more to educate brokers, he said, so traditional brokers don’t lose market share to emerging online players.
“In spite of ‘digital’ being a regular focus of performance development days for at least the last five years, the data tells us most brokers have been slow to adapt and diversify sources of lead generation.”
Most brokers had neither the time nor the inclination to get their hands dirty with online marketing and running online campaigns, Moffatt said.
“You’ve got to give industry groups and aggregators credit for really doing a good job at educating brokers over the last five years but I think it needs to be taken up to the next level.”
This means educating brokers on the physical steps needing to be taken, the urgency required and how to think about creating an online strategy, he said.
“We’ve got awareness – that’s a plus. There’s movement with some brokers starting to take active steps but most of them aren’t. We need to move the majority of the broker population into the action phase.”
“This stuff is now getting urgent. It’s not something you can really put off for much longer.”
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