6 KPIs Loan Officers Don’t Use Enough in Goal Setting
Review Conversion Rate
When it comes to creating valuable content, there’s very little that can have as much impact as a review. A review, especially in the context of a high-touch, high-stress transaction like mortgage, is worth its weight in gold for new customers.
Seeing that you not only do great work, but such good work that people are willing to leave a review about it? That’s a big deal.
And the conversion rate of loans closed to reviews garnered is a metric that few LOs think about, much less actively measure.
The calculation is simple. Divide whatever number of reviews you’ve captured in a timeframe by the number of loans you’ve closed in that same time. If you did 100 loans last year and got 10 reviews from those customers, you have a 10% review conversion rate.
We recommend doing a decent spread of time, at the very least 90 days, to make sure you have a viable data set. We also want to keep it top of mind that the full sales lifecycle of a loan can be weeks, so keeping this timeframe longer will make sure you capture all the variables that could add to that timeframe.
There’s a few ways to collect this data. The easiest is by hand. Browse your pages that collect reviews on your behalf and count how many new ones have popped up in the last X number of months. Compare that to the loans you closed within that same time period and bam! You’ve got your number.
Loan officers with stellar relationship skills and fabulous follow through on review generation get somewhere between 12-15% conversion rates. If you need guidance on asking for reviews, we have a full guide on review generation for loan officers.
Local Brand Search
A key metric used by the fine folks in the marketing department is branded search. This means anytime a search term that includes your brand name, team name, loan officer name, or variations on them is used in search, it counts towards a branded search number.
Marketing teams use this number to gauge how well the branding is going in your particular market.
For instance, if we launch a new branch of Sprinkle Bums Mortgages in a market we’ve never touched before, we would want to know just how well all the advertising is working.
We would pull reports on the search volume of search terms like “sprinkle bums” “sprinkle bum mortgage” “sprinkle mortgage” “sprinkle home loans” from before we launched our new branch and after. If we see growth in the search numbers, we know our marketing is doing something.
While my example is obviously silly, it’s a viable metric that too few loan officers are using.
If you are branding yourself as an expert, creating a team name to market, or rely on networking in any way to generate business, you should care how often you and your brand name are searched online.
For help finding these metrics, we suggest working with a search engine marketing expert to create reports on KPIs like this.
Marketing/Advertising Cost Per Loan
Putting money into advertising and marketing is a neccesary part of running a business, especially one that has such a long sales process for leads. But where and how you spend that money can make a huge difference in the value of your marketing budget.
Many loan officers buy ad space on different platforms, including Facebook, Instagram, Google’s ad network, YouTube ads, radio stations, television and streaming ads, among others. These platforms create a many different payment systems, sometimes for good, sometimes not.
The most common types of payments these platforms charge are: price-per budgets and time-limit budgets.
Price-per budgets are based on performance metrics, like clicks, views, or video plays. You pay the platform every time an event occurs. This can be good for you if you are paying for a truly valuable event. It can be an easy money maker for these platforms if they rope you into paying for unimportant events.
Time-limit budgets are set to spend a certain dollar amount within a predefined time period. For instance, maybe I want to spend $5 per day on my Linkedin ads, or I want to use a $1,000 budget over the next 60 days on an Instagram ad campaign. These campaigns help you control your overall budget, but need skilled attention to understand the full value you’re getting.
The issue with thinking about your marketing in the ways we outlined above is it doesn’t tell you the full story of your marketing.
Any time money is being used in marketing and adveritising, you should be calculating the cost per lead as well as the cost per loan. Here’s a quick example to show you how these numbers should work.
Let’s say I set aside $1,000 for a Facebook ad campaign. I want to get at least 25 leads from this and ideally convert 20% of those into a loan. That means my target loan number is 5. Now let’s pretend my ad ran for a month and review the numbers:
15,000 views
3,000 link clicks
1,500 page views
500 video views
50 form clicks
5 form submissions
2 loan applications
0 loans produced
If we wanted to judge this campaign by the number of views, 15,000 sounds pretty good! Same goes for pages views and form clicks. The scary numbers start to show at the bottom of the funnel. We paid $200 per lead and $500 per loan app. There is no cost per loan to even calculate!
We can be generous and consider that we have 5 new warm leads to work on, but without a full conversion, the numbers are hard to justify without a very robust follow up plan.
Always consider your cost per lead and loan when buying advertising.
Content Downloads
If you’re one of the fabulous loan officers that provides free downloads to potential clients on your website, you ought to be tracking those conversions as wins!
Throwing a freebie onto your site and measuring the success of the conversions is a great test to see just what resonates with your customer and give you insight to making more robust campaigns.
If your website has some analytics built in, you can even check on current or past clients to see what they’re looking at. This would give you an incredible “in” to start a conversation about future loans. Pay attention to what your existing customers are doing on your website and you’ll find a goldmine of data that will guide your strategy.
To add another layer of strategy value here, make a campaign that follows up with every downloader to ask them how they’re using it, if they need help, and offer to schedule a free consultation to ask any questions. Generally, people willing to trade their email info for content are warm enough leads that they will respond to further follow up.
Loan App Abandons
When is the last time you checked out just how many people fall through the cracks on a loan applicaiton? Especially those folks who were determined enough to do a loan app on their first visit to your website! These are the dream kind of clients, in that they take up almost no time from you at the top of their funnel.
If you have people hitting your site, converting to start a loan app, then falling out of the funnel never to be heard from again, we suggest doing an audit of your customer experience journey. There could be things that seem so simple and obvious to you, but are turning away potential customers.
You have to consider the journey from the viewpoint of a brand new home buyer-someone with no experience or knowledge of the industry and its lingo. This will help you understand the drop-off points in your funnel and create more empathy when guiding new customers through their loan process.
Email Opt Outs
This is the report we all avoid in the back of our CRMs. Who wants to know who left you? It’s almost like a virtual rejection, and it’s not fun to review. But it’s a neccessary evil if you want to start mining your database for sustainable leads.
Take a peak at your email opt out reports. What content makes them opt out? What campaigns are creating the most opt outs? What type of contacts are leaving the most often?
Taking an objective look at these metrics can help you build a better and more profitable email marketing plan.
