Change is required to stay competitive in a market dominated by millennials
By Rick Arvielo, CEO, New American Funding | bio
Technology is changing the world we live in. The mortgage process has rapidly evolved, becoming more modernized with the times, and with every change comes a new way of doing business for both mortgage originators and real estate agents.
As we step into the future, many want to know: Will this evolution in technology make the role of the originator and agent a concept of the past? Although technology won’t likely replace them, it will require changes to remain relevant and competitive in dealing with the modern-day borrower.
Reach millennial buyers
There is a new wave of homebuyers already starting to emerge. They are the millennial generation. This massive age group is not only the largest generation today, making up about one-fourth of the nation’s population, they are fast becoming the most significant consumer demographic in the U.S. They are the future of the housing industry.
As this younger generation enters their homebuying years, first-time purchases will become the norm. Because millennials are just beginning their financial journey, most won’t want to go through the homebuying process without expert input. They will need a trusted adviser.
Buying a home is one of the biggest financial commitments people make, and most buyers still want a professional alongside. Millennials are no different. In fact, 83 percent of millennials seek financial guidance when it comes to major life events.
Even though they may be tech-savvy, millennials aren’t necessarily ready for a completely digital homebuying experience. And, in general, technology does not provide the same confidence a buyer gains from establishing trust with a professional and having that adviser’s perspective to guide them through major milestones.
One key to gaining this new type of buyer’s business, however, is understanding how to serve them. Most millennials want a different consumer experience than other generations. They look for a fast, efficient and customer-centric purchase process. Therefore, originators and agents who want to succeed with millennials must embrace a different approach to business.
Diversify your team
Like any other generation, millennials want to engage with professionals they can relate to and who connect with them. Therefore, part of future success depends on mentoring the incoming generation. The mortgage workforce is aging while borrowers are getting younger.
One of the best ways to attract millennial consumers is by employing other millennials. You need mirrors in any market — people who reflect the demographic you’re seeking to serve — because customers like working with service providers who are like them.
Millennials on your team become a resource to your business. Not only do they have a mindset similar to prospective millennial borrowers, which can help your team better understand how to reach millennials, but they can help build trust with that market segment. Many millennials won’t respond to traditional marketing tactics, but they will do business with a professional they trust who can provide valuable information relevant to their needs throughout the homebuying process.
Go mobile
Although most millennials aren’t looking for a totally automated homebuying experience, many are looking for the convenience provided by modern technology. Millennials grew up in the digital age and are used to on-demand information; therefore, anyone looking to serve them should be armed with instant access to information.
More than any other generation, millennials use the internet and mobile devices when connecting with businesses. That means having a user-friendly, mobile website and easy-to-use apps is a necessity for mortgage professionals doing business in the 21st century.
“ Approach social media strategy as a teacher, rather than as a sales person. ”
Originators who can provide fast updates, create transparency throughout the lending process and efficiently close loans will have a competitive advantage when serving millennials. Today’s mortgage originators should be able to check a loan’s status, send a prequalification letter and pull credit — all from their mobile devices.
Mobile technology provides the ability to get everyday tasks done anytime, anywhere, making originators just as effective in the field as they are in the office. If you don’t have this capability, you won’t be able to competitively market your services to on-the-go buyers.
Build an online reputation
This incoming era of homebuyers also tends to do their research first, then do business next. According to Adweek, 93 percent of millennials turn to consumer reviews before making a purchase decision and more than 97 percent of them trust anonymous reviews on e-commerce sites.
It’s clear that millennials care about online reviews, and so should you. To be the originator of choice in this coming age, you will need a solid online reputation. Not having online reviews is like closing the door on business from a vast section of the buying population.
Reviews are the marketing direction of the future, so you need the right technology in place now to help you build your online reputation. It’s difficult to reach out to each borrower personally after every transaction. Instead, you should have a system that does this for you, so you’re free to focus on serving your clients.
The technology you use should not only facilitate feedback once the homebuying experience is done, however. It should allow for contact with borrowers while the process is still underway. This is key because if there is a customer concern that needs to be addressed, you can correct it before it potentially turns into a negative review.
Generating positive reviews and building a good online reputation begins with how you close your borrowers’ transactions. When you provide excellent service, clients are more inclined to write a favorable review when you ask for feedback. As satisfied borrowers complete reviews, your system should automatically post them to constantly build your online reputation.
Reviews should be posted in all the prime places where consumers look — your company website, your personal website and social media channels. The key is to build a reputable brand over a period of time to help convert potential millennial borrowers into loyal clients.
Activate social media
As we move into the future, social media will be essential to success. It is important today, but will be even more so tomorrow. Nearly 90 percent of millennials use social media. It’s practically a universally used platform; and nearly 40 percent say businesses that use social media are more accessible and trustworthy.
The key is knowing how to use it effectively. Millennials don’t go on Facebook 50 minutes a day to review the latest sales ads. It is more beneficial to approach social media strategy as a teacher, rather than as a sales person. Most millennials like to be well-informed so you have to position yourself as a credible industry expert.
There is an enormous amount of information already inundating social media channels, so you have to find a way to separate yourself from the fray. Whether your skill is working with first-time homebuyers or you’re a knowledgeable veteran with years of experience in the industry, determine what makes you stand out from the competition so you can showcase it effectively.
Not only must you know your brand, you also have to know the type of content potential borrowers want. Videos have become the dominant content across the major platforms. Millennials also tend to look for easy-to-digest information that adds value, like tips on building credit or saving for downpayments. Any professional looking to find success with millennials would do well to tailor their approach to accommodate this demand.
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Despite changes brought about by technology, the future still belongs to loan originators and real estate agents. It’s a matter of knowing how to use technology to your advantage and being adaptable as times continue to evolve. Build your future now.