Author Chris Anderson has a new book, “The Long Tail: Why the Future of Business Is Selling Less of More.” The Long Tail has implications for your online mortgage site and your source for online mortgage leads. And it can also impact the amount of revenue you generate.
As you are aware, the abnormally variable interest rates of a few years ago are creating another boom in securing new loans. Many people may be seeking a new variable or new fixed loan for their property. This trend presents a real opportunity for mortgage companies, especially those with web sites.
In the real world a dog is man’s best friend, wagging their tail, every time they see you. On the web, a visitor is man’s best friend, using a mouse instead of a tail to greet you.
Not surprisingly, there are many distinctions between generating customers in the real world versus online client generation. In Anderson’s book he explains that in traditional retail, you have the 80/20 rule, with 20 percent of the products accounting for 80 percent of your revenue. He goes on to say that online it is different; completely different.
In example, the average Barnes & Noble store carries 130,000 titles, which is quite impressive for a real world store. But when you look at the online book retailer Amazon, over half of their book sales come from outside its top 130,000 titles.
At Barnes & Noble all it can earn is on the books in the store, but at Amazon, since they carry more titles, they can earn more, and they do.
We also see that more is better occasionally in the real world; that is why my daughter’s favorite ice cream store is not called “Baskin & Robbins 2 Flavors”
Essentially The Long Tail describes the ability of the Internet to service micromarkets. This is possible due to the delivery system of the Web provides. Take for example Ecast, a digital jukebox company providing service to bars. They find that 99% of their top 10,000 will play at least once per month.
This why the subtitle of his book is, “Why The Future of Business Is Selling Less of More.”
Kevin Laws, a venture capitalist, states this about the music industry, “The biggest money is in the smallest sales.” I am sure there are just enough sales of such classics as Tiny Tim’s “Tiptoe Through The Tulips” and “William Shatner’s “Spaced Out” CD to add a few extra dollars to the bottom line of online retailers. When you add those dollars to the thousands of other songs that have just a few sales each month, the overall effect can be staggering.
My mother is English, but has lived in America since she was 20 years old. She still loves English humor. I bought her a NetFlix annual subscription for Christmas. She rents the most obscure English DVDs imaginable. She also contributes to the bottom line of NetFlix.
Even Wal-Mart, the largest music seller in the world, is physically challenged. They place their music section in highly visible locations at low prices but they are limited to about 3,000 titles in 500 square feet. They concede the niche music or older titles to the online sellers.
If you have ever been to Tower Records, an 89-store music retailer, you might recall walking down the aisles seeing thousands of music titles, or searching through the bargain bin for that one favorite song you have forgotten about. While that may be fun, online searchable databases and price comparison web sites can help you find the hard-to-find version of “Respect” by Otis Redding, (although Aretha’s version is far more popular), in less time than it takes you to get in your car and turn the ignition.
As I write this article, I have just read that Tower Records can be almost $100M in debt and is on the verge of closing. The company went through a prepackaged Chapter 11 bankruptcy protection filing. Sources site the advent of the internet, from Napster to iTunes, as the downfall of Tower Records.
You can generate more business for your online mortgage web site by casting a wider net for mortgage leads. Take for example a relatively niched search like “San Diego Mortgage,” and you will find the number of searches last month at Yahoo are as follows:
Search Number Keyword
2386 San Diego mortgage
1393 San Diego mortgage broker
986 San Diego mortgage company
857 San Diego mortgage lender
391 San Diego reverse mortgage
254 San Diego mortgage refinance
217 San Diego mortgage rate
146 San Diego mortgage loan
143 San Diego home equity mortgage
115 San Diego real estate mortgage
111 mortgage company in San Diego
109 2nd mortgage San Diego
90 second mortgage San Diego
45 mortgage broker in San Diego
45 mortgage in San Diego
42 adjustable rate mortgage San Diego
31 mortgage lead San Diego
There are few interesting facts about the above list. First is that I left off over half the related searches to save on space. Second, note that even something like “mortgage in San Diego” is searched 45 times per month, or over 500 times per year. Now assume there are about 60 keyword searches with similar annual search counts. That works out to over 30,000 extra visitors.
And, that is just for “San Diego Mortgage.” A search for “San Diego Home Loan” found another 28,000 searches per year for related terms.
You already might know what the top keyword searches are for your mortgage leads. Use those as a basis to create a list of keywords you might purchase at the various pay-per-click engines. Don’t forget to add local communities in your keywords. For example, the town of Del Mar, with less than 5,000 in population, produces almost 1,000 searches a year for “Del Mar Mortgage.”
Even the cheapest condos in Del Mar are in excess of $500,000 so you can imagine the revenue this could generate for your mortgage company. In San Diego, there are approximately 60 communities (Encinitas, La Jolla, El Cajon, Oceanside, etc.) Each of these communities can produce mortgage leads for you. If you assume just 500 searches per community times 60 communities, that is another 30,000 potential customers per year.
You can see in the physical world; sales are limited by physical space; so retail acts in the realm of scarcity. In the online world, it is full of abundance and only limited by your ability to service the type of loan inquiries you receive. You can use the internet to minimize your costs of acquisition.
If you create and then purchase a broad base of pay-per-click keywords, which, in turn, will result in additional traffic and mortgage leads to your site. At this point, you will be the one wagging your tail…
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innetwetrust.com is a leading Internet marketing web site that provides hundreds of articles & information tips on web site promotion, search engine marketing and search engine optimization; to help loan officers & mortgage companies increase their online sales. Aries and Farris has been providing nationwide mortgage leads & Internet marketing services since 1998.
Web site: innetwetrust.com
Originally published December 2006.