Connecting with Today’s Consumer, The New Buyer Path

Dave Zitting, CEO, Primary Residential Mortgage co-authored this post and was originally published in California Mortgage Finance News, a California Mortgage Bankers Association publication. 

The complexity of the sales and marketing process is at an all-time high. This heightened level of complexity has evolved to where it is today – beginning with the internet going public back in 1995. Yet, the skill and knowledge level of many marketing departments, especially in the mortgage industry, have not kept pace.

Many marketing professionals continue to try and force-fit their marketing strategies to align with an outdated buyer path known as the “sales funnel.” The theory behind the funnel is that a consumer, who could be investigating a mortgage lender, begins with the many companies they are aware of, and as they move closer to making their final decision, companies are subtracted and narrowed down to the one that will win their business. Along the way, marketers communicate a variety of messages, customized to speak to wherever they might be in the funnel.

This funnel, developed in 1898 and still used today, articulates four stages: awareness, interest, desire and action.

Here’s how it works…

In the “awareness” stage, a potential borrower may be aware of many lenders that can provide home financing. This awareness was developed by companies leveraging “push” marketing tactics that include magazine ads, billboards, TV ads, direct mail and other items.

In the “interest” stage, a borrower realizes they have a need to investigate certain mortgage companies they feel could meet their needs. So, they naturally subtract those that may be too far away, don’t resonate with them, and those that family or friends may have never used or didn’t come recommended to them by a trusted source.

In the “desire” stage, the borrower narrows down the options to one or two.

Next, they take “action” and choose a company to work with.

This progression seems logical, so what’s the problem? The problem is this: the internet has ushered in a new dynamic that makes the funnel completely irrelevant – unless you live in the mountains or off the grid where you have refused access to any modern technology.

Let me explain…

The funnel does not take into account how people today interact with the internet before they decide to work with you and fill out an application. It is focused on a push marketing methodology.
Studies show that 87% of consumers now travel a less linear, more complex pathway to a decision to do business with you. This is due to the availability of so much information on the internet. Not adjusting your sails accordingly means you’re simply turning a blind eye to today’s reality.

So, if the funnel is outdated, what is the new buyer path to purchase?

It’s called the “purchase loop.” It’s defined as a “loop” because it is non-linear and allows for consumers to enter into the path at different points and even bounce around between various points depending on how they think and make decisions on an individual level. Where the funnel was designed for the masses, the loop is designed for individuals. This is a critical distinction to understand so you can make sure you create the content on the web that’s necessary to elevate your brand according to individual mindsets.

Within the purchase loop, there are several states of mind the buyer can experience. These include openness, realized want/need, learning, seeking of ideas/inspiration, research/vetting and finally the post-purchase mindset.

Let’s take a look at each of these states of mind and how to accommodate them.

Openness: When a consumer is in this state, they may not even know they need to take a look at home financing options. But, they are open if they come across information that strikes their curiosity.

For example, a consumer comes across an article that informs them that there’s a lot of house inventory on the market and now could be a great time to negotiate a great deal on a new home. That might inspire the consumer to look at what they could qualify for on a home loan.

How would they come to this conclusion? By coming across a piece of content that strikes their curiosity, like an infographic, video or a blog post.

Realized want/need: In this mindset, a consumer starts checking out the housing inventory online and then realizes that they will need to look at financing options. So, they run off to Google and type in “mortgage loan options for first time home buyers.” If your company is to appear in the first page of the results, make sure you have a competent SEO strategy in place.

Our consumer probably hasn’t come to the conclusion they need a low down payment loan yet. So, they will seek more information by entering other keywords or phrases and may then come across some piece of content entitled “5 Mortgages That Require No Down Payment or A Small One.” Maybe you even give the option of filling out a form to download information that might be helpful to your prospect.

Learning: Our consumer begins to understand that there are a number of options available to them depending on their specific circumstances, so they are receptive to learning more from you because they filled out that form earlier. So, you might follow up with them by emailing off information that further explains the different options available and how you could help them.

Seeking of ideas/inspiration: Now our consumer is in the mindset of looking for ideas and inspiration because they are seeking content that will motivate them to continue down the path. Helpful content at this stage may include case studies or testimonials from clients who, because they worked with you, had a positive outcome.

Research/vetting: In the Research and Vetting phase our consumer realizes they will be purchasing a home. So, it would be good if you could offer them information on rates, fees or a mortgage calculator to help them make the decision to work with you.

Post-purchase mindset: In the post-purchase mindset, the new borrower will decide whether or not to recommend your company to others or decide whether they will do business with you again. They may provide you with a rating on Facebook, Yelp, or any number of venues.

This model takes into consideration a person’s EMOTIONS (very important) and understands the process isn’t linear – that a person can bounce from one stage to another.
As I mentioned before, the purchase loop really came into being because of how we, as a society, use the internet today. If you think about each one of these purchase states, great brands provide some type of content, be it blogs, videos, infographics and more to help the process along. And this is the key to connecting with today’s consumer!