Mark Forsyth

What have been some of the keys to getting people to buy mortgages online? Is it getting people’s trust or confidence or making the process easier?

Like everything else, there’s no one silver bullet. My personal view is, and having worked for technology businesses before and owning some, I actually pick some things absolutely correctly and I actually didn’t pick some of these things. In terms of the demographic of who is using, I completely got wrong sided on a couple of things.

Obviously with any web-based business the availability to have broadband and penetration is a key driver. Two, I think the fact that people had done a lot of transactions online, trust transactions, so buying an airline ticket for $3,000 or $4,000, realising you weren’t going to get ripped off, people had accepted the fact that it was possible. Three, the fact that people then sort of worked out I actually get a better choice of product where I’m going through a portal and I’m actually saying this thing’s got 24 bank lenders times 10 products per bank, 2,400 products, algorithms working in the background that spit out the best four products for me. Whereas when I walk down to ANZ or I walk down NAB or I walk down to CBA, I’m just getting whatever they’re selling.

But I think the most important driver is not the price of eChoice but the fact that I can do it in my own time, in the privacy of my own home, I can stop it, I can start it, I can restart and I can talk to somebody on the phone and never have to go anywhere. And I think that has made a massive change in the thinking around our business in terms of how we do approach C? There’s a generational shift between my view of the world and say Aussie John’s. I think the precursors to this industry that I’m in were Wizard, Mark Bouris, John Symond, Aussie, RAMS and their view was retail, retail, retail. And actually we debated many, many, many times and I know there is a strong psychometric in Australia that I’ve got to have a franchise, I’ve got to have a shopfront, it’s got to be this, it’s got to be retail, people have got to see my brand.

But I actually believe in the virtual brand, I think that if you start now, we started maybe 15, 16, 17 months ahead of the curve. I think the market is going to move to the web. There’s still barriers in terms of you’ve got to get signatures, you’ve got to do a 100 point ID check, blah, blah. But they’re not insurmountable barriers and as an example, what’s the biggest cost driver for a franchise holder? That is the fact that I’ve got my premises, I’ve got some infrastructure, I’ve got rent, rates, somebody in the shopfront, branding. My view of the world is the moment you open a shop, it’s in the wrong location. Oh my goodness it should have been three blocks down and I’ve signed a three year lease. So on the web we don’t have that problem. I know exactly where my customers are coming from. I know the cost of acquisition, I know how long it’s taken to come through, I can actually work out to the end dollar of settlement, the whole financial transaction as to how much it cost for me to get them and how much I made out of the customer.

Obviously we’re a web publication and our people are very focused on selling through the web, generating traffic, grabbing a share of the voice in the market, advertising; what are some of the marketing techniques that have been good in pulling people towards eChoice?

I’m going to give away all my trade secrets.

Maybe not all your trade secrets but some of the more successful techniques.

Well, the nature of the business model has bloomed but also I think go back to the history of eChoice, they had created an online presence but they’d mixed their metaphors. So they had created an online presence but they were spending up to $3 million a year on traditional media. So print, radio, TV to drive to the web but the problem with that is that you don’t connect the dots in terms of knowing the market you spent the money on, did they actually connect directly from the advertising?

You’re creating brand awareness, which is good, but does it actually correlate to a direct sale, very hard to correlate. Whereas when you’re spending all your money on the web, there can be or should be almost a direct correlation to what you’ve spent and the activity you’ve generated. You still get brand awareness but not as vague as radio or TV.

In addition, we didn’t have 20 million bucks to spend, I can say they spent $150,000 a month on web strategies but they weren’t doing it in a smart way. We currently get twice the traffic and spend a third of the money.

So what I did was I went out and hired a guy that I’d worked with before in a previous life, I’d worked with him in Asia who came from the gambling space and as we know everything invented on the web was invented or created or managed by gambling or porn, because they’re the biggest monetisers of the internet. And he’s been onboard for about 10 months and it’s completely revolutionised the way that we traffic our websites, our Google spend, our ad search spend, where we spend it.

We don’t have one website, we have about 140 websites. We had owned a lot of URLs that were never getting used so we went out and used the URLs the way we should have done. I think at one point we owned 200 URLs because we had acquired a lot of business, we bought and owned a lot of URLs but never used them properly.

But one of the biggest changes in our strategy versus most of our competitors, including the banks, is everybody else was focused on one brand, Aussie, ANZ, CBA and I can understand the logic of that strategy – why you would want that brand consolidation and you don’t want people going off and creating something else? But we didn’t have the advertising dollars, so necessity was the mother of invention. So we were already the back end for Virgin Money Mortgages so they’re creating their own brand, they’re spending their brand dollars, they have their own customer base and they have their own customer niche. eChoice have their own customers and I said this is great but we should be marketing with other parties who have already got customers who want to brand expand, RPU Revenue Per Unit extend, create more value for their network.

My idea was creating a thing called the BLOOM network and based on the logic of Japanese keiretsu, where you have manufacturers around the main brand and the middle being Toyota and then you can link on the outside ring not just to Toyota but if I’m a windscreen manufacturer, I can talk to the tyre manufacturer and I can talk to the windscreen wiper manufacturer. So you can talk around the peripheral by being part of the Toyota network. And so we’d had Virgin at the core of our backend and then we’d bought this business eChoice. You had a fantastic technology platform so we said let’s take the eChoice platform away from eChoice because eChoice was actually the customer of the platform. Virgin’s customer of the platform, in fact Virgin competes sort of with eChoice. So let’s use the platform and rebrand it BLOOM so we can bring on other parties that can use the platform.

So we went out and did a deal with AV Jennings. AV Jennings sell property but the biggest barrier for their clients to buy property is the fact they don’t have a mortgage. So if you go to the AV Jennings website and you click on finance and look at the structure of the finance that it’s actually eChoice.

Then we did a deal with Medibank Private, which has three million customers. Medibank Private has gone through insurance, insurance, insurance. But it knows who its customer is, where they live, it’s done its financial evaluation of them but it’s not extended further. So we’re in a pilot phase of rolling out a mortgage health check for them. But again it’s their brand, their marketing dollars, our backend.

Further then through the internet and phone service represent brands like My Rate, My Loan My Way, New Loan and anybody else’s brand that wants to have a fulfilment service using web and phone technology but wants the financial services backend that’s already built.