I have been following the Zillow Mortgage discussion with great interest. By reserving follow-up to my early commentary in BusinessWeek I have an opportunity to survey the discussion and distill a few important observations:
- Zillow did something radical
- The harshest criticisms are from non-participants
- Smart folks are observing and participating with the intent to learn
- This is an important test in “customer independence and engagement”
Zillow Did Something Radical
Zillow launched a uniquely open and transparent bazaar for a challenged mortgage marketplace. Morgan Brown (BlownMortgage.com) has given the best and most detailed overview of Zillow Mortgage Marketplace.
Zillow listened to borrowers, who were frustrated with their current mortgage “shopping” experience:
Borrowers have told us via focus groups and surveys that they spend woefully little time shopping for the mortgage they have – 5 hours. About the same amount of time they spent buying their last computer and nearly half the time they spent shopping for their last car. They also tell us that they want their personal contact information to remain private and that they want to see real rates that are accessible to them, not “teaser” rates that don’t reflect reality. They would also like to shop across their options and be able to do an apples-to-apples comparison of loan quotes from multiple lenders in a standard format. Finally, they’d like to be able to understand the reputation of the broker or lender as seen from the perspective of other borrowers, much like they can judge a seller’s reputation on eBay or a hotel’s reputation on TripAdvisor.
…and gave them privacy, actionable mortgage information, and increased insight into lender and broker reputations.
Then, they listened to mortgage brokers and lenders:
Brokers and lenders have told us that they spend too much money and time buying “leads” on the Web. They’ve told us they don’t like calling people at dinnertime any more than borrowers like to be called. They love the idea of free access to an anonymous marketplace of quote requests from borrowers who fit their desired criteria for providing a loan.
…and gave them an opportunity to develop an online reputation, provide information to interested borrowers, and do so with little investment in a tough market.
But, possibly the most interesting and radical of all is that Zillow is openly embracing the reactions of the community in an honest way:
Will it work? We’ll see, but we sure hope so – and will be listening to your suggestions and feedback to make it better.
They have provided and are openly facilitating a discussion group on the Zillow Mortgage Marketplace forum and Drew Meyers, their Community Relations Specialist is actively chronicling the good and the bad.
The Harshest Critics are Non-Participants
Despite the evidence that the Internet is, or will soon become, the primary place borrowers come to select their mortgage broker or lender; some will never embrace it as a part of their business. Interestingly enough these non-participants seem to be the shrillest skeptics.
Naysayers top concerns include: bait-and-switch, price competition, lack of knowledgeable providers, and gaming the reputation system.
Participating Lenders are More Positive
Meanwhile, it seems that experienced mortgage professionals are reporting very different observations as they participate in this new marketplace.
Brian Brady (MortgageRatesReport.com), is re-evaluating his pre-launch hesitations as he zeros in on how to most effectively find and help his ideal borrower.
Likewise, Owen Raun (RMC Vanguard Mortgage & MortgageOnlineBlog.com) reports, on his blog and during our phone interview, optimism and success. Owen told me that RMC Vanguard had submitted over 70 quotes thus far and is getting expected early responses and application rates from customers. He also reported that it seemed as though most of the brokers and lenders were respecting the marketplace’s code of conduct and placing accurate and reasonable quotes.
Mixed Reactions from Traditional Lead Generation
As you might imagine, traditional lead generation companies provided equally mixed reactions.
In an email interview with Marc Diana (CEO of LeadPoint), the reaction was one of interest, but unsure of the viability. Marc thought that the model was worth watching, but raised concerns of customers getting inaccurate or bait-and-switch quotes. He indicated that the inefficiencies, contrary to existing lead generation models, may make it less viable and could frustrate both borrowers and lenders with the marketplace.
Somewhat to a counterpoint, David Schneider (CEO of ZipSearch! ) issued a very positive reaction in our interview. David quickly applauded Zillow’s efforts in attempting something innovative. He stated his number one goal has always been to make his mortgage broker and lender clients as successful as possible, at the lowest cost. So, Zillow’s opportunity and creativity to create a free lead generation model is a great possiblity for helping a struggling market.
“Customer Independence and Engagement with Vendors”
The Zillow Mortgage Marketplace may be an early example of emerging adoptance of Doc Searls’ (one of the key authors of the Cluetrain Manifesto) concept of Vendor Relationship Management (VRM). This paradigm envisions customers having tools and opportunities to reverse the traditional engagement flow with vendors and service providers. Much like the Zillow Mortgage Marketplace, VRM puts the customer in control of their information and their engagement with a product or services vendor.
I am certain this will be a case study watched by both industry participants and academics to determine the viability of this unique customer controlled approach.
Do you think companies will become comfortable with customers driving the sales opportunities and processes?
