Mortgages have been around for centuries, but modern tools have revitalized the ways that mortgage brokers operate. From electronic signatures to automatic status updates. Loan officers are better equipped than ever before to perform their duties.
Modern CRM software has also given loan officers access to advanced analytics tools that can improve the entire mortgage experience. By leveraging analytics, you can reduce lead times, increase conversion rates, and boost total revenue.
What Are Analytics?
Analytics is a broad term that refers to a systematic means of computing statistics or data. Analytics are utilized to communicate and interpret meaningful patterns in data. However, interpreting data patterns is only half of the process.
The true benefit of analytics comes into play when the data patterns are applied to making meaningful changes within an organization. For loan officers, this means assessing the effectiveness of current strategies and making improvements to those practices. After all, when they are used correctly, analytics can dramatically improve the performance of your brokerage team.
Metrics vs. Analytics
During your journey to improve your business strategies, you have undoubtedly encountered the term “metrics.” While some business owners believe that analytics and metrics are the same, this is not precisely accurate.
As the name implies, analytics focuses on the analysis of data. On the other hand, metrics are the hard numbers that are being tracked. These numbers are used to gauge the progress or performance of your loan officers and your company as a whole.
In the mortgage industry, the most important metrics are referred to as KPIs (key performance indicators). While most analytical data is useful, you should focus the majority of your attention on KPIs.
Which Metrics Are Most Important for My Mortgage Brokerage?
Some metrics are more important than others. By paying particular attention to these KPIs, you can help your loan officers improve their performance while creating a better experience for consumers.
Some of the most important KPIs for loan officers include:
As a loan officer, the conversion rate is one of the most important metrics you can use to gauge your overall success. The conversion rate is calculated by dividing the number of loans funded by the amount of applications submitted within a specific time frame.
By analyzing conversion rates, you can identify potential pitfalls in your company’s processes. Low conversion rates are typically the result of inefficient communication with clients, a lack of competitive offerings, or poor time management.
Regardless of the cause of a low conversion rate, the first step in improving your practices is to identify that there is a problem. You can then make necessary adjustments and periodically reassess until your conversion rates hit acceptable thresholds.
Cost Per Loan
Your brokerage’s average cost per loan is another essential KPI. This metric measures the general efficiency of your company. It also accounts for a variety of factors like:
- Cycle times
- Conversion rates
- Overhead expenditures
You must ensure that your cost per loan remains high if you want to maintain profitability. This KPI is of particular importance when you are scaling up your mortgage office.
If your cost per loan is low, it is important to remedy this issue before scaling your business. Otherwise, you may be pushing your profitability past the tipping point. Generally, poor cost per loan metrics are the result of inappropriate allocation of staffing, low conversion rates, and inefficient loan processing.
While your brokerage’s approval rate is a relatively simple metric, it is also a telling one. Approval rate is calculated by dividing the number of approved applications by the amount of submitted applications.
A low approval rate is indicative of an issue with your loan processing practices. If your loan officers are taking too long to review loans, then unqualified applications will slip through. This results in wasted resources and will diminish the experience of qualified borrowers.
Revenue Per Loan
In addition to the cost per loan KPI, revenue per loan is essential in generating good profit margins. Your revenue per loan is calculated by subtracting the total business revenue from your expenses. This figure is then divided by the number of funded mortgages within the same time frame.
The revenue per loan KPI allows you to assess the overall health of your mortgage brokerage. It provides a more accurate representation of your business’ profitability than the number of loans that are being processed.
If your revenue per loan is low, then you should implement digital CRM tools, like the ones offered by BNTouch. These tools will streamline your mortgage services and improve your overall customer experience. In turn, you will improve per-loan revenue and make your business more profitable.
Benefits of Using Analytics
As you can see, analytics can impact every aspect of your mortgage company’s day-to-day operations.
When you begin assessing the performance of your team in terms of measurable KPIs, you will be able to optimize the quality of your mortgage services.
The primary benefits of implementing analytics into your business operations include:
Incorporating analytics can dramatically improve the efficiency of your daily operations. By having access to hard data, you will no longer have to rely on guesswork or hunches to make key business decisions.
Analytics will help you to more efficiently distribute leads amongst your team of loan officers. In fact, our CRM software can even automatically distribute these leads based on employee performance and other factors. This allows you to focus on serving your clients and growing your business.
Analytical data will also improve the way your team communicates. You can customize your CRM’s functionality to address specific challenges faced by your team. By facilitating seamless communication amongst loan officers, clients, and real estate agents, you can vastly improve your conversion rates.
A Personalized Approach to CRM
Analytics can help you to take a more personalized approach to customer relationship management. You can have access to incredibly accurate data, which can be used to create a tailor-made experience for your consumers.
For instance, if you find that your brokerage is having great success by advertising on a particular social media platform, you can shift your attention to this medium. You can also discover which types of content are sparking the greatest amount of client engagement. In turn, this can create the opportunity to pursue additional leads in an effective way, improving your return on investment for advertising.
Analytics can also reveal which types of loans that you are having the most success with. While you may not want to limit your company to a particular type of loan, it is important to make the most of the opportunities that are presented to you. Highlight your team’s experience with that specific loan type and make sure to mention it in your ads and social media posts.
Faster Decision-Making Processes
When you have access to advanced metrics, you can make decisions with confidence. You will no longer have to spend hours or days second-guessing a particular course of action.
Instead, you can trust the analytics and follow through on bold ideas that will help you grow your business. By continually reviewing this data, you will also have the ability to improve upon current practices as your business grows. You will be fully prepared to overcome any unforeseen hurdles that arise as you scale your brokerage.
Improved Consumer Experience
At the end of the day, the mortgage industry is all about the client. Leveraging analytics is an excellent way to improve the consumer experience throughout the loan buying process.
KPIs can help you to identify shortcomings in your current loan processing practices. Once you have corrected these issues, you can expedite loan processing, which will give your clients a more streamlined buying experience. This will boost your brokerage’s reputation and generate more leads.
Optimized Loan Officer Performance
When you effectively implement analytics into your business practices, you can optimize the performance of your loan officers. In addition, you will obtain a better understanding of which tools they need to carry out their daily responsibilities.
By monitoring loan officer performance, you will also have the opportunity to address issues directly through training programs and one-on-one coaching. This personalized approach will improve employee morale and performance, which can impact the long-term success of your business.
Implementing Analytics with BNTouch
Are you ready to optimize your mortgage services through the power of analytics? Ready to revolutionize your current business practices with cutting-edge CRM software? If so, then BNTouch is here to help.
Our innovative CRM software has helped hundreds of loan officers to grow their businesses. With our programs, you will have the ability to:
- Automate your marketing
- Convert more leads
- Stay connected with borrowers
- Recruit new partners
- Streamline communication
- Receive detailed analytics reports
All of these great features are included in a single, user-friendly CRM solution. No matter what the size of your mortgage brokerage may be, we have a solution for you. Currently, BNTouch offers CRM packages for individuals, teams, and multi-location enterprises.
If you would like to learn more, contact our team and schedule a free demo. Once you see our program in action, you will never want to process a mortgage without it.