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Washington state industry appointments update - 1/25/2007

National Mortgage Professional
Jan 25, 2007

Direct mail basics: Consistency and measurementErin Beitelscheesdirect mail, marketing As a marketer, I read every piece of junk mail I receive. However, the majority of consumers sort their mail over the trash and your message is never viewed. While direct mail has a lower response rate than other forms of marketing, its cost makes it a great option for many mortgage brokers and loan officers. Direct mail responses can vary by industry and mailing type. The typical response rate for direct mail is one to three percent. In the financial services industry, however, this can be as high as eight to 10 percent. What to market? The first step for creating a direct mail piece is to determine in one sentence what you want to accomplish. Will you be selling a specific loan program? Targeting people who need to cash out of ARMs? Instead of a product, you may decide to use the schedule of a local, college or professional sports team. This is one way to ensure that your mailing will be saved and your name and company is top-of-mind for the client. As the market changes and mortgage professionals are leaving the industry, it is important to establish your solid reputation and let clients know you are still in business. The next step is determining whom your mailing will target. Look at your previously closed loans. Would this program apply to those clients' needs? Segment your past clients and anticipate their future needs with your loan products. Is there an organization that you belong to that you have access to mailing addresses of all members? You may also decide to purchase a list of people who would fit the demographic you are trying to reach. The target may be people in a certain ZIP code, credit score or income bracket. Letter or postcard? For a limited budget, the easiest options are a postcard or letter. If you decide to go with a letter, keep it concise. Use only several sentences and bullet points. Make sure your phone number is displayed in a place that is easy to reference. I once received a letter from a local pizzeria with four paragraphs explaining why they offered the best pizza in the area. I was puzzled by a letter of that length for something like pizza. At the bottom of the letter was an offer for free salad and garlic bread with every order. I held onto the letter and when I did order from the pizzeria, the person answering the phone had never heard of the letter. This example illustrates your need to be ready for the leads you are generating. Follow up immediately with your newly generated leads. Train anyone answering the phone to be ready to respond to what you are offering. A well designed postcard can stand out among the stack of mail. An oversized postcard typically will receive better results than the standard-sized postcard. When designing your postcard, keep it simple and have a solid message. Be consistent and always use your logo. While direct mail pieces will vary in design, they should always have a similar look or feel. Focus the message around the client's wants and needs, not your own. You also don't want to sell your entire loan program on a postcard; if you give all of the details, there is no reason to call you. If there is a marketing person in your office, run your idea by him. Many online and local printers offer design services for free or minimal fees. Postage Your biggest expense for direct mail will be postage. Mailing first class will ensure that the mailer is received faster and less damaged. Bulk options are also available for less time-sensitive messages. Depending on your list size, you can also have your printer meter and print the recipient's address directly on the postcard. This will save you time and money if you do not have someone who can handle your mailing for you. Consult the U.S. Postal Service's Web site or your printer to find options that might best fit your needs. Measurement The most important step in any marketing activity is measurement. Understanding what works and what does not will eventually help you refine your mailings and get the most return on your marketing dollar. Ask all new leads how they heard about you. In many instances, the client will not mention the postcard or letter where they first saw your name or number. The key to direct mail is that it can yield immediate responses by phone, but should be tracked over three to four campaigns to understand the return. Remember, marketing does not work instantly. To calculate your return on marketing, take the total dollars you spent on the mailer and subtract that from your total yield spread and/or fees received from that client. Divide the net profit by the cost of the mailer and then multiply the result by 100 to receive the percent return. In other words, a $350 mailer that brings you only one customer with $2,500 paid to you in yield spread has provided a 614 percent return [(2,500-350)/350 = 6.14 x 100 = 614 percent]. Direct mail is a simple and cost effective addition to your marketing mix. With a consistent message and design, brokers and loan officers can stay top-of-mind with prospective leads and past clients. Erin Beitelschees is marketing manager at Columbus, Ohio-based ReCasa Financial Group. She can be reached at (614) 221-6770 or e-mail [email protected]
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