4 Easy Ways to Combat Margin Compression

The Mortgage Banker’s Association (MBA) projects that 30-year fixed mortgage rates will rise to over 4% by the end of 2022. With over 300,000 active loan officers competing for business, how can you compete in a competitive market, drive incremental profit, and address fears of margin compression? 

If you’re wondering how to take control, these strategies will help beef up your toolkit.

4 WAYS TO PUSH BACK ON MARGIN COMPRESSION

1. Leverage your customer base 

In an industry where “net new” is the norm, it’s a common pitfall to disregard customers you’ve worked with in the past. However, it’s time that we stress that this is a big “no, no” when it comes to your margin compression strategy. 

Across all industries, one thing is for sure – when trying to make a purchase, customer loyalty plays an enormous role. How frequently do you peruse the grocery store seeking out the same brands you trust? Nine times out of 10, I bet you choose your tried and true. 

The same goes for loyalty in the mortgage industry. The last thing a borrower wants to do is engage with a new loan officer that they might not trust. They already have enough on their plate as they try to secure a loan. The borrowers in your database already trust you. So why are you wasting precious time by trying to wine and dine prospects that might leave you in the cold?

Download Now [Whitepaper] Overcoming the Mortgage Industry’s Borrower Retention Problem 

2. Create meaningful relationships

One thing is for sure in this industry: relationships matter – from your borrowers to your referral partners. So, how can you position yourself as the lender or partner of choice?

Start by being a source of knowledge for consumers and realtor partners alike. Let them soak up everything you have to offer like a giant sponge, all while offering them absorbable, relevant information. 

Educate community members on the value of taking on a mortgage or teach them the difference between a fixed-rate and an adjustable-rate mortgage. Just because you’re savvy to the industry doesn’t mean those around you are. Even some second-time home buyers are likely in the dark. Empower your borrowers to make informed decisions – a loan is a major decision, after all.

Realtor partners expect that their relationship with LOs is a one-way street. They give and give, and LOs take a take. Instead of taking all of the cookies out of their cookies jar, why not provide them with something freshly baked. A new qualified lead will surely help keep their bellies full – not to mention their ears open on your behalf. 

Supply agents with real-time and relevant information, details on borrower responsiveness, and the ability to aid them in sealing a completed deal. 

3. Orchestrate a seamless journey 

When’s the last time you got an email from an e-commerce clothing store that sent curated picks made especially for you? We’re guessing if you open your inbox, you can find one of those emails in a matter of seconds.

But, on the other hand, was there ever a time when you got an email where the content was irrelevant? 

You probably paused and wondered, “Why am I getting this email?”

On the rare occurrence, this happens, it’s cringe-worthy. Your eyes gravitate to the unsubscribe button. 

The same holds true for your leads. The last thing they want to see is an irrelevant email. If you are still sending out generic emails to your entire base or reaching out to customers with impersonal messaging, you may want to rethink your current process.

Segmentation is the key to getting the right message out to each individual. 

4. Invest in tech 

You depend on your smartphone – there’s no question about it – and at this point, no getting around it. 

It’s tough not to notice if you work in an industry where everyone seems like they’re living in the past. 

When was the last time you visited your doctor and noticed paper files overflowing behind the receptionist? Although unlikely, it happens. Some industries take their sweet time adapting to technology. So, the last thing you want to do is get left in the dust – regardless of your tech skillset. 

Luckily, the mortgage industry is starting to take note that it has some catching up to do. Loan officers are deploying the best tech as it’s proved crucial for staff retention and keeping up in a competitive market.    

We’d be turning a blind eye on you if we didn’t already emphasize the importance of keeping tabs on your current borrower base. For example, Sales Boomerang does the work for your team by alerting a lender when a past borrower is ready for a loan. Heavy lifting isn’t required as it doesn’t need one to log into a database. Notifications will automatically come to the lender’s inbox. It’s a perfect solution since you are probably glued to and reading this article on your phone.

Putting the pieces together

Designing the perfect strategy isn’t always easy. Thomas Edison made 1,000 unsuccessful attempts at creating the lightbulb before he found victory. Putting these four tactics into motion will help everyone on your team combat margin compression and may even inspire a few lightbulb moments.