We’re not the enemy!
I am surprised there are still some brokers with contempt for rate comparison websites. We work for the broker industry and help them attract business from the banks. So if anything, banks should be the one to dislike rate comparison websites, not brokers.
We understand that a right mortgage is more important than a low interest rate... so why are we selling low rates to the consumer? It’s because that’s what a consumer understands and, in most cases, is looking for. Consumers don’t always know about all the mortgage options available to them and hence don’t end up searching for advice. Rate comparison websites like ours act as a platform for brokers to get in touch with such consumers (rate shoppers) – an opportunity that could have been easily lost to a bank!
In today’s world of search engines, the costs of online advertising have increased drastically. Even after spending hundreds and thousands of advertising dollars, brokers with limited knowledge of online marketing lose money. The online mortgage space is currently dominated by rate comparison websites. Ours is already ranking on the first page of major search engines for most competitive keywords and is a perfect platform that brokers are taking advantage of to get maximum exposure in the market.
Currently, banks have a majority of the mortgage market share – at least three times that of the broker market – the difference is dramatic and if the broker market wants to get anywhere close to or even reduce the gap marginally, brokers should be willing to explore every avenue and every resource available. Be it selling rate, selling services, advertising on search engines or advertising on rate comparison websites.
Rate is just the beginning
We have worked very closely with mortgage brokers since we launched over four years ago. In that time, we’ve promoted and advocated the services of mortgage brokers and believe that we share the common goal of educating and connecting the Canadian consumer with the best offers and products for their needs.
The mortgage brokers we work with include us as another channel in their marketing plans, along with other online components (Pay per click, SEO and email marketing) and offline (TV, radio, direct mail, real estate agent referrals and print). We’re simply a part of their marketing mix, providing them with new customers. As we grow, we’ll continue to refer new business to them.
We understand that, to date, there has been a focus on rates, but we believe that this is simply the starting point. As Canadian consumer behaviour evolves, this sector will adapt and rates will become less and less of a focus. A high quality product, a better customer experience and excellent service levels will be what Canadians will gravitate to and what we will aim to provide.
We view ourselves as a mortgage broker advocate, providing additional direct access to Canadian consumers who have become savvy in using the web to find the best deal for many types of products. Increasingly, we’re seeing consumers search for their financial products in the same manner. Above all else, it will be this consumer demand that will drive the future direction of the mortgage industry.
Fighting bank fire with fire?
We think of RateHub as an online advertising channel for mortgage brokers that actually works. Our brokers choose to work with us each month because there are no contractual obligations or fees based on placements, impressions or brand awareness. Our brokers are charged only when a qualified mortgage shopper is sent to them.
RateHub leads are warm because the mortgage consumer specifically chooses the brokerage to arrange a call-back and sends their name, phone number and e-mail address. RateHub’s lead generation system makes it possible for our brokers to track their close ratios and determine their return on investment.
Historically, the online mortgage market has been dominated by the Big Five banks as they had a monopoly on marketing dollars and scale to acquire substantial traffic. We look at rate aggregation websites such as RateHub as a way to funnel some of this traffic to the many talented and competitive mortgage brokers across Canada. We feel we bring market share back to the mortgage broker.
Building a significant online presence takes dedicated resources and a strong understanding of online marketing techniques. Some Canadian brokers have invested capital, time and resources to build these competencies in-house while our clients have decided to focus on their core value proposition, selling mortgages, and have outsourced online lead generation to us.
When we look at the U.S. and European markets, we see multiple publicly traded companies in the financial services lead-generation space with significant business generated from mortgages. The mortgage lead gen space is young in Canada and its only direction is up.