This Week in Broker Magazine

This week's featured story from Broker magazine, our sister publication:

The Power of Web 2.0 in Your Hands

Brokers can use all the elements of Web 2.0, including blogs, wikis and social networks to build market share in a down market.

By Anthony Garritano

More and more experts are calling on businesses to use various online tools to market themselves. But how does one take advantage of technology to get more volume in a declining market? Most tech executives say Web 2.0 is the wave of the future. Are you wondering what Web 2.0 is exactly?

Well, Web 2.0 is all about using the Internet and other Web technology with the goal of enhancing creativity, information sharing and, most notably, collaboration among users. These concepts have led to the development and evolution of Web-based communities and hosted services such as social networking sites, blogs and wikis.

A wiki is a collection of webpages designed to enable anyone who accesses it to contribute or modify content. Wikis are often used to create collaborative sites and to power community websites. Wikis are all about empowering people to customize a Web environment.

On the other hand, a blog is a website usually maintained by an individual, with regular entries of commentary, descriptions of events, or other material such as graphics or video. This is a vehicle whereby mortgage brokers can send out customized information to peers and borrowers about their local area, mortgage rates, new loan products and tips to getting a mortgage.

Lastly, a social network service focuses on building online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others. Most social network services are Web-based and provide a variety of ways for users to interact. The most common examples are Facebook and MySpace. "Social networking and blogging represents the next phase of this industry," said Bill Adamowski, group president, general partner and co-founder of enterprisewide automation provider ISGN. "Social networking allows brokers to find out what others are doing. They need to see which wholesalers are going to give them a good deal on FHA, for example? You can't get answers there without social networking. Blogs are less interactive, but you have mavens in the industry that shine here. These mavens sit around and look to see what value they can provide others. For a broker that's important because they need ideas. Reading a blog is like having a mentoring relationship. We are an industry that likes to network with each other and the timing is right for collaboration. This takes the friction out of the industry."

Realizing this trend, broker technology vendors like Ellie Mae are gearing up to offer brokers customized social networks. It has partnered with the Mortgage Power Network, founded by industry trainer Chip Cummings. "We released Mortgage Power Network to show people how to use social networking to improve their business. We'll provide tools, videos, etc.," explained Mr. Cummings. "We have forms for users so Encompass users can get together to solve problems. Brokers across the country will be able to talk. When you add video it'll be unique because it pulls it all together.

"You'll find that 65% to 75% of brokers have gone on blog sites or know about them. In terms of usage, the number is lower. We find 27% to 35% are using this to actually generate business. So, most people use it, but they don't know how to use it to benefit their business. Business has been easy and people haven't had to think as much about how to drive new business to them. It's also an educational thing. Until you show them, they're scared of using new technology. Once they see how to use it and how to apply it, they get excited."

What do brokers need to know about Web 2.0 to actually improve their business? "The basic is a blog site and a news site," answered Mr. Cummings. "From a broker perspective and a marketing perspective, you can create URLs to drive back people to your site who are reading something that they're interested in. If I'm blogging on new rules for FHA, for example, you may want to have a link that draws me back to you and your FHA business.

"You can then go into social communities like MySpace and Facebook. I have a client that is 50 to 60 years old and never did any of this." Mr. Cummings told him that he needed to get on MySpace and Facebook because he catered to younger borrowers. "We got him on these sites and it generates one to two deals a week for him.

"In addition to this you can add audio and video. We know the power of YouTube. Most of it is entertainment, but I can record a video about the perils of being a first time homebuyer and direct viewers to my website, for example. Before you know it, you have thousands of people viewing the video."

Similarly, Mortgage Coach is launching a similar service called Mortgage Coach Community. With the launch of the new website, members now have access to a new resource to tap the brains of the best in the industry. Users of this social network get feedback on ideas and common problems from leading industry peers, sales and marketing tools, easy access to a 10-year multimedia collection of insights and best practices, and dozens of videos showing industry leaders presenting specific loans to homeowners and referral partners. "Subscribing to some of the best blogs geared toward a particular broker is valuable," said Dave Savage, chief executive at Mortgage Coach. "The other layer of value is that vendors like Mortgage Coach will be rolling out an online community for brokers to share their challenges to get encouragement and best practices. Third, brokers should start their own blogs and write content about what borrowers want. They should be viewed by Realtors and borrowers as experts.

"The rule in life is that the way you become successful is by delivering value and being a life-longer leaner. The most successful people are also teachers. You have to pass on the knowledge. Nobody thinks they're an innovator. People don't realize how easy it is, though. It's an automated way to take advantage of success principles."

Mr. Savage believes the only thing limiting brokers from tapping this technology to both network and get more business is their mindset. "You have to be inspired. There are loans going on. Some of the most common tactics to using a blog is getting people to subscribe. When people want a loan they need to think of you. That's what a blog does for you," he said.

Web 2.0 can also be used as a way to network. "The idea that a user group comes together with a common need to help each other out has been happening for a while," added Jonathan Corr, chief strategy officer at Ellie Mae. "A lot of user groups are run by not-for-profit groups. There's a need to rally together.

"The set of capabilities may be richer depending on where you go, but it's about utilizing technology so people can interact and ask questions. To me social networking isn't about selling people, it's about connecting. I think a good broker and loan officer can use social networking to align with people with common interests to get referrals, for example. Brokers can also use it to connect to Realtors and other business partners. That being said, advertising on a social networking site is a good thing. You have to be where the people are."