How many times have you seen the “three-legged stool” sketched on a whiteboard? The subject matter differs, but the point is always the same. No matter how sturdy you build the first two the thing doesn’t work without three legs. Applied to online lending, the three legs are:

1. product

2. online sign-up form (i.e. application)

3. proactive marketing

There are far too many two-legged stools on the Web today. The missing leg? Marketing. Without proactive marketing to drive a good cross-section of borrowers to your online loan center, you are destined to spend most of your precious resources processing loan applications for the credit-impaired, kooks, and con artists. (This isn’t unique to cyberspace. Lay a pile of loan applications on the sidewalk in front of your branch and you’ll get a similar response.)

Online loan marketing has picked up considerably since October when the term “refinance” went begging for a sponsor on four of the five major search engines. In our latest test, “refinance” was sponsored by mortgage companies at every search engine we checked (see below).

Source: Online Banking Report, 4/2398 to 4/30/98

*Served to our browser searching from a Seattle POP. Banner ads displayed can vary by geographic location and sometimes by what ads you’ve already seen. We tested for multiple sponsors by hitting reload 10 times per search term.

Banner ads on search engines are just one of the more obvious and expensive ways to drive new loan business. Below are ten techniques for increasing loan volume from existing customers. To increase volume from outside your current customer base, consult the table on the following page.

How to Increase Refi Cross Sales to Current Bank Customers*

1. Make sure your customers find you when searching online. Page descriptions and meta tags should include the words: mortgage, refi, refinance, banking and/or bank (even if you are not one), your state, your city, and interest rates. Also consider purchasing a refi ad banner whenever your company name is used as a search term.

2. Leverage the paper statement (front, back, inserts) with your Web address and a list of services offered online. Wells Fargo includes this clever tagline, “With Online Banking you would already know what’s inside,” on the top portion of its checking account envelopes.

3. Plaster that Web address everywhere (print, radio, branch, outdoor, events, biz cards, VRU).

4. Assist local media in writing stories about how easy it is to track rates and make refi decisions using online tools and email.

5. Offer unique online features to attract attention in the press and with prospects.

6. Offer simple and advanced versions of refi calculators preloaded with current rates.

7. Offer email rate update services (see p. 6 and
E-Loan.

8. Provide multiple paths from other parts of your Web site into the refi area.

9. Offer preapproved mortgage refinances to qualified customers.

10. Offer lifetime mortgages that can be refinanced or rolled into a new home with no new “paperwork” (users would just update a few fields at your Web site).

*without focusing on price

Attracting Refi Business from
Outside Your Existing Customer Base

1. Maximize your free exposure on search engines (see number 1 in previous table).

2. Offer an “email this deal to a friend” so users can easily alert others to the great deals at your Web.

3. Create a local physical presence through Realtors, mortgage brokers, attorneys, and escrow companies located in your target market(s).

4. Buy banner space at search engines and rate comparison sites such as BankRate.com.

5. Purchase leads from Web-based lead generators such as GetSmart.com and Quicken.com.

6. Create a presence at Web sites frequented by homeowners in your target market(s); look beyond the banner and consider exclusive sponsorships and joint ventures such as E-Loan’s new arrangement with Yahoo!.

7. Create an online sweepstakes geared towards homeowners (see Intuit p. 16).

8. Post value-added content of interest to consumers thinking about refinance such as BankAmerica’s HomeWorth Search www.bankamerica.com/p-finance/athome/hmworth_ov.html free refi credit analysis complete with copies of credit reports; Relocation Wizards such as FinanCenter www.financenter.com Realtor links; home listings, and so on.

9. Try different headlines to entice Web users into the mortgage area. For example, “Trade-In Your Current Mortgage” may sound less onerous and/or more interesting than simply “refinance now.”

Driving new eyeballs to your Web is the first step in building out the final leg of your three-legged mortgage stool. Once a prospect lands in your refi Web, you have four goals to accomplish in the first 120 seconds:

1. Download the refi page quickly (15-20 seconds).

2. Reassure users they’ve come to the right place. For example, “Your spot for the fastest mortgage refinances in the northwest.” (5-10 seconds)

3. Entice users to begin interacting with your Web site. For example, “Click here to see if you can start saving money on your mortgage payment NOW.” (30-45 seconds)

4. Offer something interesting for free that requires users to enter their names and email addresses. For example, “Sign-up for our free rate update service and automatically save $100 on your refinance.” (45-60 seconds)

After these four goals have been achieved, begin a more thorough selling effort such as outlined below.

Ten Steps to Improving the Closing Percentage on Web Visitors

1. Make the intangible tangible with content and features that address refi prospects’ ten biggest fears (see p 7).

2. Tightly integrate a refi and payment calculator into the content. Pre-load current interest rates as the default.

3. Offer a 5-question, 2-minute prequalification form.

4. Divide the application into five steps and make it simple to navigate, simple to understand, and filled with links to more help:

• Step One Name, address, phone number, etc.
• Step Two Purchase price, purchase date,
• current value
• Step Three Current mortgage rate, balance
• Step Four Income, assets, self-assessed credit
• quality, etc.
• Step Five Loan desired, amount, term, etc.
• Step Six Loan preapproval subject to
• verification of information provided

5. Have human help available every step of the way by phone, online chat, and in-person.

6. Offer real-time loan approval subject to credit evaluation, income verification, and appraisal if necessary. A token, $50 or less, non-refundable application fee would greatly reduce nuisance applications from pranksters or those just testing the waters.

7. Provide a “Lock Your Rate Now” button with a couple hundred dollar fee to capitalize on the “gotta have this rate now” customers.

8. Leverage your Web to generate leads for human mortgage reps.

9. Provide daily email loan status reports until the loan closes.

10. Provide clear and concise service guarantees written in language users can actually understand.