Referral/Lead Generation Strategies

Hey guys,

I'm relatively new to the industry, and am trying to build my referral network and leads. What lead generations strategies or professional industries did you target when you first started?

I've started to reach out to a few real estate agents and property managers as I think this would be a good first step to target. However, I've spoken to a few people who think the real estate industry (agents/property managers) aren't great referrals for leads, but I don't have any leads to begin with.

Any other applicable advice for new entrance would be greatly appreciated!

 

Do you currently have a mentor or someone that can take you under their wings ?

 

Yeah i've got a mentor but i'd like to bring in my own leads rather than rely on my mentor. How did you first get started or is it just being more patient?

 

I think you missed the point of Tony's response mate.
How does your mentor get their leads?
I suggest that's what you need to discuss with them so they can assist you with same

 

ahh now I understand - yep will discuss with my mentor. Much appreciated on the clarification

 

No probs,, getting new clients is certainly one of the tougher challenges of being a new Broker

 

It will be a bit tricky given timings, mortgage lending businesses will move backwards 30-50% this year and there'll likely be more entrants associated with the boom of 21. I imagine it will be the worst year in a decade (2018 was bad too). Many wont realise this yet, but its the short term horizon when lending sizes fall ~20%, credit growth will more than half this year, etc. I.e. its the macro environment that brokers will operate in.

In times like this I'd be focussing on learning, reputation building and developing myself as a broker. I.e. think 2-3 year horizon rather than 12 months.

 

100% agreed.

 

Has anyone tried buying mortgage leads? Every now and then there are ads come up in facebook feed. Are they any useful? Any recommendations?

 

(I just joined PropertyChat to comment on this thread)

Don't waste time wining and dining realtors (most of whom get a kickback from the lenders which you can't compete with) or waiting for friends and family to throw you scraps and "grow" from word of mouth. This is exactly how so many new brokers get frustrated and give up.

There are basically two ways to acquire customers in this business: one is referrals and the other is paid acquisition - buying customers.

Referrals are good because they're pre-framed by the referrer - they've already got a positive impression of you before they meet you and they already trust you. As a result they're also cost effective (because the conversion rate is so high.)

But referrals are not really a path to sustainable growth because 1. they're unpredictable, 2. there's no control around them and 3. they're low growth.

Lots of brokers get customers from referrals and they wear it as a badge of honour that they don't need to advertise and they get all their customers via word of mouth. But these guys are always playing small.

Paid acquisition is basically paying for the attention you need to make sales. You can do this by running ads, building out a proper website so that clients can find you in search (SEO), buying leads, buying an existing book and so on...

If you don't know how to do this then invest in learning it or getting help (faster) Don't ignore it.

There are businesses that have gone out and have grown using referrals, but they've typically had some form of paid acquisition that is getting them the initial base (like buying an existing book) and then there's the referral mechanism that comes off that.

Brokers relying on referrals rarely have significant numbers because you can't really say, OK, I want to double my business, so I just need to get double or triple the amount of referrals this year. It's hard work and lame.

Paid customer acquisition is much faster, it's highly predictable and highly scalable.

Not everyone will love this answer and that's Ok. You can stay small and still enjoy a good lifestyle. I'm not judging that.

But if you're serious about growing a business that generates real money then put the work in to build a proper client acquisition system, and understanding your unit economics.

 

I have seen a lot of new brokers come and go. Some know agents and think they will get referals, one I know in this camp got none at all and he was expecting that as the way to get started. Like Ash said agents usually have referral arrangements in place already with kickbacks - often undisclosed.
As for family - not going to happen I think. Some family members might use you, but some won’t want to because they don’t want you to know their income and assets etc. One new broker i mentored had done a lot of work on one of his cousins loans, made some suggestions and then later followed up and she said thanks, we went straight to the bank who set it up for us like you described. Also myself I was at my uncles funeral and my cousin asked me if I needed a loan, I said what and she pointed out a bloke doing the rounds handing out cards saying he was a good broker. I said what the ****, I am a broker myself!

There are also so many new brokers. You have to ask yourself how do you differ from the masses and why would anyone use you instead of the many other brokers.
But if you keep at it you will slowly building up a business. I remember I made more than 1 months salary in my first loan so I quit my day job and become a full time broker and I ended up doing 2 more loans in the next 12 months and I had an income of just $12k before expenses.

 

I've used them all. The quality of the leads (and hence conversion rates) varies massively. Best are about 15%

They're usually generated by an ageny running paid ad campaigns that offer something of value to prospects (like a download or a call on how to reduce your repayments) in return for their contact details (which you're buying)

The ad is super important - if they're targeting rate shoppers you'll have a hard time dealing with them and get more clawbacks. If they're promising free strategy sessions you'll spend some time talking to people just looking for info.

Success depends on the system you have for cold calling and following up with prospects too. If you suck at selling then you are better off building a website that helps people with their research so that they're calling you. Attract clients like that and you don't have to do much selling.

I also feel like basing your business on bought leads is like building on rented land. You're much better off building out your website and then investing in SEO and getting multiple sources of traffic. Takes more work up-front but you're building a money machine basically.

 

These are some really good tips and insights.