Second mortgage prospecting: Where to go and what to do nextBrian Ricedirect mail, telemarketing, radio/television ads
Over the years, there have been three major marketing verticals
for mortgage prospecting that have been used by everyone, from
large banks to mom-and-pop brokerage houses.
1. Radio/Television: These media outlets are
typically used by companies that don't have a pressing need to
reach a targeted audience in order to pull in as many prospects as
possible. The problem we have seen with radio and television
marketing is that most of the applicants are either looking for a
purchase loan, or lack the credit and loan-to-value necessary for a
refinance, second mortgage or debt consolidation loan.
2. Telemarketing: A greatly missed vertical,
telemarketing once created the lowest cost-per-loan marketing and
was the fastest way to increase pipelines, mostly due to the
ability to contact prospects quickly and use targeted lists to
ensure the prospects were likely candidates. However, this was
before Do Not Call legislation. The DNC laws have greatly decreased
the amount of callable prospects, creating consumer negativity
towards calling and leaving us with a small amount of phone
numbers. These remaining prospects are inundated by telemarketers,
which decreases the number of applicants and increases the cost per
loan by three times.
3. Direct Mail: Stronger and smarter than ever
due to technology and better list segmentation, direct mail has
proven to be the winner of all verticals. Recent statistics
released by the U.S. Postal
Service have shown that majority of consumers not only read
advertising mail, they look for it. But more importantly, direct
mail has proven each and every time to always create a positive
return on investment (ROI). The newest addition to mortgage
prospecting has been lead generation via the Internet - purchasing
prospects that have filled out or expressed an interest via a mini
1003 on the Web. This form of advertising has proven successful for
some companies, while others have seen major losses or unworkable
increases in their cost per loan.
If a mortgage company is marketing for any type of mortgage
without targeting a particular audience, than any one of the
aforementioned verticals can be used to create pipelines. The cost
per loan at the end of each campaign will allow you to pick what
works better for ongoing efforts.
However, when isolating a particular program such as second
mortgages, selecting prospects by underwriting guidelines and
tracking ROI are key elements. Putting together the most targeted
marketing list will create the most successful vertical. It locates
applicants that already fit the necessary underwriting guidelines
as well as the criteria that creates the need for the program being
marketed. When purchasing mailing lists, make sure to select
specific data on prospects including credit scores, revolving debt,
mortgage amounts, open mortgages and loan-to-value to compile a
list of highly likely and approvable candidates for a second
mortgage or debt consolidation loan.
The next step is designing a variable mail piece that quickly
addresses why, how and when. By using variable financial formulas
in your mail designs, you are able to give the prospect the exact
financial benefit without over-informing.
Your main concern in creating campaigns of this intelligence is
the validity of the data being used, so that your message and
variables make sense to the prospect receiving the mail. To do
this, first make sure that the public mortgage data being utilized
is updated weekly by your list provider and that the credit bureau
data being used for the campaign is updated monthly. Most
importantly, only purchase lists that have been modeled on comps in
a zip code to ensure real loan-to-value, not assessed.
I recommend always using first class postage to guarantee
delivery, tracking each response by time and location, and call
duration via dynamic toll-free numbers. This will give you the
information you need at the end of a campaign to calculate ROI and,
more importantly, marketing costs per closed loan. Keep your
marketing material simple, clear, intelligent and consistent and
don't forget to have the same level of professionalism in the way
you conduct your business.
Brian Rice is co-founder and CEO of Red Clay Media, a direct
mail and mailing list company. He may be reached at [email protected]