customer centric borrower segmentation

Using Borrower Segmentation to Drive More Leads to Your Funnel

Borrower segmentation is a powerful process for loan officers to go through as they think about attracting new leads into their pipeline. While you could have some success with finding new leads without segmenting them, your efforts will be far more effective with a strong segmentation strategy in place.

When it comes to homebuyer leads, nearly everyone is a potential lead. Anyone can be a lead unless you disqualify them at the entry point of your funnel or as they move through your funnel.

In this post, we’ll walk through the best way to segment your leads and two other segments you can make to ensure your communications are precise and effective.

Segment by Relation to You

Instead of thinking about age or demographic as most segmentation models usually start, we’re going to start with how these leads relate to your sphere. What we mean by this is how do these leads know you? Here are the four segments to consider with this first segmentation slice:

  • Unknown – People who don’t know you
  • Why Nots – People who know you but haven’t done business with you
  • Past Customers – People who know you and have done business with you
  • Referrals – From family, friends, and network connections

These segments are all important, but you’ll spend most of your time working on leads in the first two categories.

For the Unknown category, you’ll spend most of your time trying to make yourself known to as many of them as possible. If these leads don’t know you, they can’t do business with you.

For the Why Nots category, you’ll want to focus on driving home your value prop and what makes you stand out from other loan officers. They know you, but why haven’t they done business with you?

For Past Customers, adopt a consistent follow-up outreach to stay top of mind for those customers and increase the likelihood that they’ll use you again in their next transaction.

For Referrals, you do already have an in by the nature of the leads being referrals, but that doesn’t make the job easier. You should still deliver your value prop as if you were talking to an Unknown or Why Not lead.

Segment by Purchase

Beyond segmenting by how you know or don’t know your leads, you can add another layer into your borrower segmentation based on the purchase the lead is about to make. In this case, we’re talking about purchasing for the first time or making another purchase.

First-Time Homebuyers

First-time homebuyers make up a huge chunk of the market. In Q4 2018, they accounted for 56% of sales of single-family homes and 39% of sales for the overall housing mix (Q4 2018 First-Time Homebuyer Market Report).

Don’t make the mistake of thinking that first-time homebuyers are only Millennials. A significant chunk of the first-time homebuyer market is comprised of non-Millennial buyers.

First-time homebuyers are usually good candidates for mortgage insurance and other first-time homebuyer programs like Home Possible. Having up-to-date information and expertise on these products can help you capture more of these leads.

LEARN MORE ABOUT THE DEMOGRAPHIC DIFFERENCES WITHIN THE MILLENNIAL GENERATION IN OUR LO eBOOK!

Repeat Buyers

Repeat buyers might not be your repeat buyers but that doesn’t mean that you don’t have the chance to capture these buyers. You can think about these in another two categories: upgraders and downsizers.

Upgraders tend to have growing families who need more space while downsizers tend to be older and wanting to have a smaller house now that their kids have moved out. Downsizers or retirees could also be in the market for second homes so they can split their time between two locations.

Find a Borrower Segmentation Model That Works for You

By developing your lead segmentation model this way, you’ll find it’s easier to develop your communications strategies for borrower leads.

Do exercise care that you don’t add too many layers. This can make communicating with leads too cumbersome and confusing. Sticking to 2-3 layers will help you create a handful of clearly-defined segments that are easy to market to.

Want more tips on thinking through your segmentation strategy and how to market to those segments? Check out our new eBook – 5 Steps to Creating a Successful Borrower Pipeline.

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