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Choosing a Consumer- Direct Approach

“Originators should picture themselves choosing that ‘horse’ that will carry them into a long lasting, extremely profitable, and fun career.”

Web survey:
Many originators argue that consumer-direct marketing is the most effective strategy when recruiting new borrowers. But when implementing the strategy, which avenues do originators take in order to build a client base? We asked the question on MyHeadHunter.com’s weekly website survey and respondents indicated that direct-mail campaigns (such as letters and postcards) are preferred. Phone contact came in second followed by advertising mediums and newsletter distribution.

Online avenues, seminars, and promotional give-a-ways ranked at the bottom.

Question: What percentage of your marketing focuses on consumer-direct?

Response:

  • 75 percent or more 36%
  • 50 percent to 75 percent 22%
  • 25 percent to 50 percent 2%
  • 10 percent to 25 percent 20%
  • Less than 10 percent 12%
  • None 8%

Question: What is your most effective consumer-direct strategy?

Response:

  • 26% Letters or Postcards
  • 24% Phone Calls
  • 21% Advertising
  • 17% Newsletter
  • 5% Seminars
  • 5% Website
  • 2% Promotional Give-a-Way Items

Steps for implementing measurable direct-mail campaigns.
Think about it. There are very few occupations where you are all things to all people. Take an insurance agent, for example. If they specialize in personal lines, they usually do not write many commercial-type insurance policies and refer the business to someone who does write that type of insurance. What about a doctor? Sure, there are many who do family practice. But when it comes to a heart problem, the patient is referred to another doctor.

Now take the mortgage business. Most of us start out in this business by trying to be all things to all people. We write FHA and VA loans, B/C mortgages, home equity lines, commercial mortgages—you name it, we can do it, right? However, you can never truly make the big bucks in this business if you don’t specialize in a niche.

“Pick a horse and ride it” is an old term that I heard at a seminar years ago. In my mind’s eye, I pictured a coral of horses of all different breeds, shapes, colors, and sizes. I am deciding to take one of them for a ride into the mountains. I stand there for a long time just trying to decide which one to pick. Should I pick a tame one? How about the pretty painted horse? Maybe I’ll pick the one that acts more spirited because I was up to more of a challenge that day. I could have stood there for hours, but I had to make a decision or I’d never get anywhere.

Originators should picture themselves choosing that “horse” that will carry them into a long lasting, extremely profitable, and fun career specifically with a focus on reaching consumers.

Since I specialize in consumer-direct marketing in my mortgage business, I want to share with you how to pick your horse, too.

Start with a Plan
The term freethinking is very important here. Write down everything you think you want to do. Do you want to become an Internet originator? Work with first-time homebuyers? Set up a one-stop-shop mortgage company that employs specialists in mortgages, financial planning, insurance, appraisers, and even real estate agents? How about a mortgage company in a supermarket that’s open 24-hours per day? Set up a kiosk in the mall? Counsel homebuyers during lunchtime at the largest manufacturing plants in your area? Come up with the wildest ideas you can think of and then start eliminating them—one by one. Reexamine where you want to go and how you are going to get there.

When my sister and I decided to open our mortgage company, we went out to lunch and wrote all of our ideas on a napkin. Your plan does not need to be fancy. In fact, it is better if your plan is simple rather than complicated. But, my advice is to just have a plan.

Find Your Niche
Reflect upon some of the people or companies who have created their own special niche. For example, Avis Rent A Car’s niche is reflected in the “we are number two but we try harder” campaign. Coca Cola’s known as “the real thing.” But once you have a plan on what type of business you want to do or with whom you want to do business, develop a niche for yourself. Thousands of successful people will tell you that once they decided to specialize, they made more money than they ever thought possible. Let’s say that you wanted to become an Internet originator. Don’t think for one moment that you have to be like the “Quicken.coms” of the world. You may only want loan amounts over $100,000, refinances, or A-paper mortgages in three surrounding states. You could also target baby boomers, new construction, ethnic marketing, jumbo loans, or woman-only niches. Once you have decided on your business’ focus, next begin to develop your marketing and advertising campaigns in order to obtain business from your self-declared niche.

Develop Your Marketing
This is where you can become really creative, and it does not take a whole lot of money, either. I have a couple of personal examples to share with you. Early on, as part of my consumer-direct marketing plan, I decided that I wanted to send out video and audiotapes to everyone who called me for a mortgage. You might think that this type of campaign is expensive. It isn’t really. I contacted the art department of a local college and asked them to do a video for me as part of their assignment for class. I would pay for all the materials. I was able to find a company to duplicate, package, and shrink-wrap the tape for $2.75 a piece. No mortgage company in my area was sending videotapes. And seven years later, I don’t think any of my competitors use videotapes as marketing tools.

The next step was to produce an audiotape. The president of my company does an a.m. talk radio program on a monthly basis. For $260 per month, we get radio spots one week before and during the radio show. They also provide us with an audiotape of our topic of the month. We can duplicate these tapes for about $1.75 and send them out to clients who have inquired about that particular topic (such as credit scoring or new construction).

Whatever you decide to do, do it differently and do it consistently. Part of Tiffany & Co.’s marketing hook is its “little blue boxes” and “blue paper bags.” If you offer to send a potential client information about a mortgage, why not send along a package of chicken noodle soup, a mug, a couple of cookies, and a note that says “take a break while you digest my information.” The key is that when you decide what you are going to do, do it differently and do it all of the time.

Become the Expert
All the planning, marketing, and advertising in the world is useless unless you become known as the expert within your chosen consumer-direct niche. Marketing and advertising will get people into your door, but knowing your stuff will keep them coming back to you. If you plan on working with first-time homebuyers, then you better know your first-time homebuyer mortgage programs. Your goal is to become so well known (let’s say as the first-time homebuyer expert) that when buyers, Realtors, or builders hear those words, they think of you.

Be a Mastermind
Henry Ford, W. Clement Stone, and Andrew Carnegie used the mastermind concept. You can only do so much and go so far on your own because all of us have limits on what we have learned. If you chose consumer-direct marketing, assemble a group of people who also market directly to the consumer—people such as grocery store owners, insurance agents, sales managers, nurses, or doctors. Try not to include people who are in the mortgage business (or at least not in your geographical area). You’d be surprised how much you can increase your business by learning how other people do things outside your industry. I belong to several mastermind groups and have developed a great respect for anyone who has been successful in working directly with consumers.

Create Clients-for-Life
As part of your overall plan, you should create a system that allows you to keep your name and expertise in front of your clients. David Jaffe, an originator with Chase Manhattan Mortgage (and a former M.O.M. SuperStar), told me a story recently about when he moved into his first home. He had hired someone to redo some wood floors in his home. When he purchased another home, the wood-floor problem came up again. But he just couldn’t remember the company’s name because it had not kept in touch with him.

Newsletters, postcards, and holiday cards are all great reminders. But also think creatively. What about a fortune cookie for the Chinese New Year; a St. Patrick’s Day newsletter printed on green paper; a Thanksgiving Day card; or an end-of-the-year report card that reviewed what happened with interest rates, housing prices, new mortgage programs, and something personal about you and your staff? Develop a database and keep in touch on a consistent basis with your past clients.

So find the horse that you want to ride. Once you have found the consumer-direct approach that is best suited to your specific situation, you can take proactive steps to further your success.

by Karen Deis

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