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Social Media and the MLO: Competing for Business on New Platforms By Sue Woodard

JULY 2011 



The way people receive and communi- view Facebook as their community more cate needs and information has taken a than they do people sitting right in front dramatic shift in the past few years. The of them?” number of people on Facebook is more than double the population of the United Quite simply, each MLO needs to put States. LinkedIn has grown 100 percent to him or herself in front of the opportu100 million professionals in the past year. nities. There needs to be a presence in There are 1.3 million “tweets” sent out the very media where prospective cusfrom Twitter each hour. tomers are spending the majority of This not only affects social connections, their media time, and the MLO or comsocial media influences the way people pany needs to be comfortable with and communicate everyday needs, from shop- have the technology that facilitates this ping to childcare, and even more dramat- interaction or the borrower will not ic decisions including when and how to know the lender is out there. purchase a home. Web sites, including This aspect of origination cannot be, and REAL- overlooked. A recent independent study, have capitalized on the online performed by FirstUSA Data and comhousing information knowledge acquisi- missioned by Mortgage Success Source tion need, but the chalfound that originators lenge remains for many that spent at least 33 mortgage loan originators percent of their time on (MLOs), from top-performing customer acquisition industry veterans to green had higher loan voloriginators just stepping into umes than their peers. the business, on how to comSpecifically, the study pete for business in the new found that more than 50 social media world. percent of originators who Social media platforms spent at least 33 percent of have gone from a trend their time on customer among high school and acquisition were top-third college students to a way performers. Only 10 perof life for all demographcent of them were bottom“Relevant content is ics. Almost 25 percent of third performers. the currency that Facebook users are 25-34 builds business relayears old and 30 percent tionships, but MLOs New-age lead are 35-54 years old. Those generation cannot continually age groups are prime can- keep fresh, pertinent Local real estate offices didates for becoming firstare just not the same content flow on a time homebuyers, current anymore. While visiting daily basis along homeowners looking to an office with donuts with their other refinance and those looking knowledge and client and rate sheets was to purchase another home always considered a bit acquisition duties.” because of life events, such “old school,” at least the as a new job, divorce or the MLO might have had the arrival of children. But these potential cus- chance to say hello to a few hungry tomers are not visiting banks or credit agents. But things have changed and unions in person. They have direct deposit, real estate agents are no longer in their online bill pay and get pre-qualifications offices waiting for the phone to ring. for auto loans online. Instead, they network online, and look for To capitalize on the communication market and financial knowledge to develshift, each MLO must devise his or her op an edge. MLOs must make changes as own strategy for embracing and using well, having real-time market data, analythe technology tools that are avail- sis and advice on their mobile device and able—to anyone—and compete for the must be able connect with agents and same viewers by adding his or her own other referral partners. tactics. The question becomes: In this new media age, the epitome of visibility is Google. If an LO in Denver “How does a single MLO or one company enters “Mortgage in Denver” and does stand out to the 500 million people who not come up as one of the top three or

four responses, that LO is at an extreme disadvantage. Ideally, the MLO’s blog, Facebook page, personal Web site and ghost-written article will pop up, creating a presence and a new prospect. Ad words can be bought on Google, creating an instant presence if those words are typed into the browser, but a much less expensive way to have input in search engine optimization is to frequently contribute to sites and crosspromote with referral partners.

Establishing the connection One of the most difficult things for any business to do is try to find customers and predict when they are going to need products or services. On average, 15 percent of an MLO or organization’s clients are going to need to buy a new home or refinance their current home each year. It is the same ratio for the rest of the population. The problem is there is just no connection between the MLO and the prospect. Where those prospects are located is getting much easier to figure out. If an MLO wants to know who and where the potential clients are, it is not nearly as difficult as it might seem and will get increasingly easier. The average Facebook user is connected to 80 community pages, groups and events. The key is finding the prospects before there is a need. People’s needs for mortgages and almost any banking product are driven by major life events. Whether it is the birth of a child, loss of a spouse, a wedding, a move, a child’s graduation, a job transfer or pending retirement, many are predictable events. When a known potential consumer decides the time is right to commit to a purchase, the MLO who reached out through social media has already created a connection between the prospect and him or herself. The MLO used social media to build brand awareness—the key is to engage the consumer by providing a bounty of useful and relevant information. Within the context of the banking and financial services world, and all business to client businesses, branding through social media creates trust and builds a foundation. Unlike traditional bus stop ads, creatively placed business cards or a billboard, social media creates a dialogue instead of the traditional one-way conversation that used to occur with advertising. A name and phone number do little to create brand loyalty or trust. Prospects can reach out with questions and concerns, see interaction with current clients and receive information and advice through social media platforms. Data analytics reveal customer

interest in viewing content and even gives clues to their financial needs through page-by-page reporting.

Obstacles and solutions Social media is an adaption that MLOs and their companies must make to remain viable. Once the transition to social media has occurred, the opportunities for increased business present themselves through those new channels, but along with the new business potential, issues can also arise from attempting to remain relevant in these new ventures. Compliance, syndication and content creation all pose problems for MLOs entering the world of social media. Any communication an MLO has about finance from his or her personal social media account, the bank or parent institution is responsible for. The wellintentioned MLO who tries to reach new heights can end up penalizing themselves or their employers because the message was non-compliant. Syndicated messages, particularly direct marketing, are extremely viable solutions. Institutions can approve messaging sent to social media and e-mail and still get a personal touch by attaching an individual MLO’s picture, name and contact information. Another challenge of meeting social media needs is finding interesting, timely content to give to consumers. The individual MLO must have real-time information to replace daily rate sheets and be able to easily explain the market along with giving reliable insight and advice. Newsletters, ezines and market-related e-mails are all popular ways to communicate market information, but where does the information come from? Relevant content is the currency that builds business relationships, but MLOs cannot continually keep fresh, pertinent content flow on a daily basis along with their other knowledge and client acquisition duties. The investment should be made to procure an organized, established network of industry subject matter experts, talented writers and easy deliverability. This allows MLOs to stay current, build key relationships and not fall behind. Having this information automated along with other syndicated social messaging is a great way to keep abreast with the social media trend and gain business without losing productivity in other areas. It’s clear that social media is not just a trend as it increasingly influences the way people communicate and do business. The only way an MLO and lending institutions can remain competitive is by making a push into social media through a well thought-out plan that supports the MLO’s sales and prospecting efforts. Such endeavors include search engine optimization (SEO); utiliz-