LendingTree’s Secret to Industry Leading Conversion Rates

Mission 007, The Extraordinary Experience was LendingTree’s context for this year’s Partner Summit. However, neither the mortgage nor the lead generation business is synonymous with ecstatic consumer experiences. In fact, recent media coverage and tests from consumer reports tend to indicate an appalling blender of unfulfilled promises, missed expectations, and maybe even deception.

In contrast, at the recently concluded LendingTree Summit, consumer experience seems to be the strategic focus of LendingTree under new CEO C.D. Davies. Unfortunately, reversing the tarnished perception of a battered mortgage industry, where only 11% (according to one summit presenter) of customers will chose to return to the same mortgage company, will not be an easy task.

Emphasizing Consumer Experience

Certainly the since of urgency, priority, and a focused framework for execution has been set forth by LendingTree. Built on a pyramid of service, value, and trust, Jessica Ordeman (Senior Director of Consumer Experience), laid out the roadmap that LendingTree is confident will create a more positive consumer experience, higher quality inquiries, and ultimately repeat customers and promoters.

Focusing on Service to Create Loyalty

In the domain of service, a notable paradigm shift was presented. A transition from assessing consumer experience as satisfaction to one of loyalty. To do this LendingTree will begin using a concept, used by other major consumer brands, known as a net promoters score. This score relies on one fundamental question: Would you recommend us to a friend, family member, or colleague? The assessment on a scale of 1-10 is then compiled into the percentage of promoters (9,10) and the percentage of detractors (0-6). The net of that number is the net promoters score (NPS).

How is LendingTree doing today? Based on all consumers that closed a loan that score is 53%, which is considered very strong when benchmarked against other highly regarded brands like Southwest Airlines, at 60% and Enterprise Rental Car, at 53%. However, when assessed against all consumers that submitted an inquiry for a mortgage to LendingTree that score dramatically plummets to -20%. This number should strongly illustrate the logic underlying many of the changes and commentary coming from LendingTree’s leadership.

This current negative NPS certainly underlines comments from LendingTree Executives during the summit concerning the strategy for managing the lender network and recent announcements of price increases.

Closers create loyalty. Closers create repeat customers. The effects of a network full of Closers advantages the consumer, LendingTree, and the lender. Consequently, if a lender is not managing the LendingTree consumer inquiries and experience effectively; therefore, not closing–then the new price structure will not work for their mortgage business. And LendingTree is okay with their logical departure from the network.

Ensuring Value and Expectations

As the strategy presentation moved to value, the message was clearly a need for reliable expectations and then delivery. This seems a strong contrast to the current online proliferation of unrealistic payment teaser advertising. The mechanism for driving consistency and compliance? Offer standards. Standards that are monitored and enforced with advanced analytics. Keeping tabs on discrepancies in comparative offers and the initial versus final offer. The bottom line was obvious. LendingTree’s research shows that speedy delivery of an offer and consistent delivery on that promise converts and creates loyalty.

Trust is the Foundation to Loyalty

Trust seemed to be the most challenging of the three initiatives to articulate. I think this stems from the relative uncertainty of what builds trust online. A whole new channel for the concept of trust.

The most obvious first step was to allow consumer the ability to verify the lenders that are directly responding to their LendingTree inquiry. This was referenced as an improved lender verification process. This process was labeled as a direct response to the increasing impact of credit trigger leads to crush the consumer with unsolicited calls for mortgage services.

Now it’s about Execution

All in all, I was impressed with the new cast of leadership and strategic thinking that LendingTree is bringing to the market. It seems consistent with my philosophies for the new market, presented over the last year–put the consumer at the center, create expectations you can deliver on, effectively manage the lead experience, and create transparency. Now the proof is in the pudding. What will execution look like?

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6 responses to “LendingTree’s Secret to Industry Leading Conversion Rates

  1. Bill,
    This seems like a good step in the right direction. LendingTree has long been considered has one of the best lead source in the industry , but has faltered with their customer service to its buyers. That is another subject for another time, however I am pleased to see the focus on the end user being made a priority.

    I still have mixed feelings for the price increase. I understand the LT point of view, but I feel that the change and the focus on cleaning the network only benefits LT and no the buyer.

    I would like to see LT prepare its new buyers with a general white paper and possibly give them the right tools to succeed. Otherwise their network will never grow or grow very slowly because they are only allowing top buyers in the network that are already aware of the what it takes to succeed.

  2. Pingback: LEAD CRITIC : Blog Archive : More Thoughts About LendingTree

  3. Wow, I’m sad I didn’t get invited. Maybe next year! CD is right to focus on improving the consumer experience. LT has always been in the forefront of lead quality and customer experience – but that’s not saying too much considering its bedfellows.

    LT pioneered the Lender Scorecard, and this NPS takes it a step forward. What it does not do, however, is fundamentally change the consumer experience. My opinion is that the basic lead aggregation model delivers a fundamentally poor customer experience. Does this new LT execution allow the customer to really be in control? How? By validating the lender who will be contacting them? This is not enough.

  4. Paul,
    I agree.
    We have asked this question many times, but does the whole lead acquisition model need to change and wouldn’t the big boys like LT, LMB and Nextag be in the best position to do it?
    Will they?

  5. Bill,

    I think your blog about Lending Tree’s new focus is spot on.

    As a professional investor, I’ve been watching the mortgage market with great interest since 2002, and I’ve been surprised at the lack of focus on the customer’s end-to-end experience.

    Maybe it’s because most mortgages are just sold into the secondary market. Maybe it was just short sightedness on the part of the industry.

    It’s shocking to hear Countrywide complain they had to follow the market down in terms of industry practice, and a recent article in the New York Times highlights their attitude toward customers. Precisely when they had the chance to be leaders in the industry, they chose to be followers and are reaping the rewards.

    Perhaps Lending Tree can emerge as a leader with their new focus on the customer’s experience. But, like you say, the proof of the pudding is in the eating.

  6. Pingback: Quicken Loans Puts Consumer First « Better Closer Blog

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