The key to conversions

Mario: [00:00:17] Yeah. Look, conversion is important for the whole ecosystem, really. Let's start off with the customer. So the customer sits down with a particular broker who is in their eyes is is a professional in their, in their field. And the broker would spend a couple of hours with that customer getting to know them, carrying out preliminary assessments and assessing which lender to recommend that particular customer or best suits that particular customer's needs. After that, then the customer is, you know, they go home after that recommendation. And, you know, there's a bit of excitement, there's a bit of an emotional play that they're they're applying for a for a loan, which is one of the largest investments that they'll ever make, only to find out depending on which lender it is, whether it's a couple of days or a couple of weeks later to find out that that they actually are not successful. So it's actually we see it as a very poor experience for the customer. We see it as maybe the customer starting to doubt the broker's capabilities of recommendation, recommending a suitable product. So it really puts a lot of pressure on the customer, but also puts a lot of pressure on the actual broker themselves. And then when you look at it from a from a business standpoint and and you think of it from just a broker's lens, that's a couple of hours that they have put into an investment and got no return out of it. So it actually makes bad business sense to to continually not convert loans. So what is the ability of of a broker not converting means they're not getting paid. So it's a very tough environment to operate in. And the the environment that we are in today is lenders are constantly changing or moving the goalposts of where their credit appetites or what tends to happen is many customers fall victim to a shiny rate, really nice marketing, but only to find out after they've applied that their credit policy doesn't actually apply to that particular customer's profile. So there's a lot of false hope built. And unfortunately, you know, 50% in most cases of customers are getting a no instead of a yes. So that's a pretty poor experience. Day one in in in the whole journey of applying for a home loan or buying their first home or, or their investment property. So that's why we believe that conversion is key. Many people say, you know, cash is king. But in our game, really conversion is key because you're assisting that customer. When it converts, they get the home that they want. The broker is taking a huge, you know, area in their business to say, I've converted the loan, which means they're going to get paid for the loan. So it makes business sense to try to align their understandings with lenders that are going to convert or have a higher probability to yes on every application. And that's where we are. We have spent a lot of time focusing on better understanding those constraints, better understanding the pain points of the customer and the broker, and trying to find better ways to service those customers and brokers to get a higher probability. Yes.

Mario: [00:03:59] Yeah. Look, it all starts from education, so better understanding the parameters of the lender panel that they have looking at. There is the mainstream banks, which is a very appealing because of either a Shoprite or the customer may be an existing customer to that particular mainstream bank, but also they need to really look into what's the possibility or probability of that customer actually getting a loan with their bank or other lenders. So it comes down to understanding credit policies of particular lenders, but also if you think about what they need to better understand is the type of customers that they are attracting. Are they attracting a certain segment of borrower or customer type or persona? And if they are then better aligning themselves with lenders that appreciate and understand that type of persona or that type of customer. So it's really coming down to knowing your credit policies, knowing your customer base and marrying the two together. The other thing that we've done very well with pepper and brokers have been really, really excited and thankful and grateful is we're giving them tools, i.e. our Pepper Products Select or PPS that allows them to sit down and spend 2 minutes or as fast as they can type. And we were able to give them an actual right product and fees associated to that customer's specific need and we actually honor that rate. So we are able to give them a quick answer in under 2 minutes that we actually honor the rights and the fees that we share out in that 2 minutes. So what that does is it gives a huge confidence boost for the actual broker when they're sitting in front of the customer that when they do recommend a pepper product on the back of using the tool that they know that they will never be left red faced in front of that customer quoting a higher rate or saying no. And the reasons behind that is because it's a sophistication that we have in the tool. Does an EVM or electronic valuation. It does a post code search to better understand what the maximum LVR that will lend in that post code. We actually do a SSC credit report on that customer. We know the full credit file of that customer. We are part of the CCR. So we understand exactly the repayment history of the of that customer's profile, the credit score of that customer. And then we're able to give them an answer in less than 2 minutes or as fast as that broker can type. So that confidence level for for them interacting with their customer is at an all time high when they are recommending post using the tool in other ways. If you think about the importance behind it and what what they need to do is if they review how many hours they have spent on loans that have not gone anywhere, it's actually a pretty daunting number. I've spent nearly three months now circling round nationally in and talking to brokers, and one of the largest pain points and most frustrating thing that has popped up in the last 12 months is conversion. They are finding it that many lenders out there are moving goalposts. Many lenders out there are promising a very sharp rate, but are not communicating a clearly or more transparently that that particular right has a very limited customer spend or the type of customer it will take on. So they sit in front of the customer and unfortunately they promise them or tell them this is what we're recommending. And then only to be left red faced in front of that customer saying Sorry, that did not go through. One thing that we have done with PPS is you can use that the for meeting with the customer, but you can also use PPS to have that discussion with the customer when you've received a negative response from the original lender. So rather than picking up the phone, calling that customer and saying, sorry, I so-and-so lender couldn't help you, the actual conversation with that customer has changed. It's picking up the phone, calling that customer saying, Sorry, so-and-so lender couldn't help you, but I do have an indicative approval in my hand with pepper money. The rates is X, the fees are Y, and the maximum loan amount we can do is that. So? It changes that dialogue or that conversation from being just a negative phone call to slightly negative with an alternative solution which again it just bolsters and strengthens the positioning of the broker that they are experts in their field and they haven't given up on the customer and they're giving them an alternative solution. A couple of areas that we support. So first and foremost, we've always been advocates of broker education. That is our number one priority is to continually invest in broker education. We've done that for nearly 20 years now where we've just constantly invested, whether it's tools on our websites, courses that we've put brokers on, that we've we've invested in those brokers. It's just that constant reinvestment into the broker channel. Outside of Pepper Products, select the tools that we're giving them and giving them the confidence to be able to recommend. We've also got Pepper Resolve, which is integrated into aggregator software, which again supports or offering an alternative lending lender products with no surprises. And that's the biggest key here. There's no surprises because when we say that we are going to do this deal at that rate and that fee, there is no surprises post assessment when the rest of the submissions come through. The other thing that we do is as well is we invite brokers into our credit workshops, we get them to understand. So I think where pepper differentiates is its it's transparency in here are the goalposts. This is what we have. You can either use the tool and we'll give you the goalpost upfront in under 2 minutes or you can come in to our credit workshops and mingle with our credit team and really get an understanding behind how our credit team think and what they look for when when a submission is being put through. Brokers have really embraced the credit workshop sessions. They love the fact that they can pick the brains of the people that they that are actually assessing their deals. And and we're not shy of being very transparent in showing them where we play, how we price, and what not to send to us.