A common statement I frequently hear from clients goes something like this: “I hear direct mail works, but I have tried it and have received a very poor response.” Instead of trying to break down the process and discover why it isn’t working, most just give up and say, “Direct mail just doesn’t work.” Most of them then usually move on to the next shiny magical lead generation tool that hits their inbox.
I want to share with you the five biggest reasons most originators have not yielded optimal results from their direct mail campaigns. For each of these “misses,” there are quick and easy ways for you to fix these marketing campaigns so you can start generating some big commissions on a consistent basis.
Mistake #1: Mailing only once
Those of you who know me have probably heard me ask, “Who ever gets married on their first date?” No one, right? Well it’s the same with your direct mail campaigns. The big mistake here is mailing to a group one time and then deciding whether or not it works.
If I gave you a budget of $5,000 and told you that you had two choices: First, you could mail your piece to 5,000 people once, or you could mail that same piece to 1,000 people five times, which option would you choose?
Most would mail to the whole group of 5,000 and that’s a big mistake. People require a little direct mail “dating” in order for them to respond. You will get a much better return on your investment by doing five mailings instead of just one.
Don’t listen to people who tell you that you should be getting a two percent response on your direct mail efforts. Here’s a better way to judge it. How much did you invest? How much did you earn in commissions? All you really need to care about is your return-on-investment. If you got 20 people to respond, but didn’t close any loans, your return-on-investment is zero!
Mistake # 2: Not fishing in the right ponds
This is a very common mistake. I’ll keep it short here for space reasons. It’s just as easy to do a $500,000 loan as it is to do a $200,000 loan. So, mail to the people in the higher-income zip codes who are closest to your office. Even if you are in a rural area, there is typically a high-end area within a 30- to 40-mile radius so no excuses here!
Mistake # 3: Not having a message to market match
You must have a message that fits the market you are mailing to. No one wakes up each day and says, “Gee, I really need a mortgage.” No one wants a mortgage … what they want is a nice home so they can spend time with their family. Or, they want to refinance so they have more income each month to spend on the things they like or need.
You must try to reach your prospects on an emotional level. Your message should show them how they can get the benefits of your mortgage not the terms of the loan or rate.
Stop making your landlord rich!
Enjoy the American dream now while rates and home prices allow you to finally live in that dream home you’ve been thinking about!
Would an extra $300 per month help you during these tough economic times? (A refi headline …)
Are you making your local banker rich as you struggle to get by? (Another good refi headline …)
Lastly, you want to make sure that you are targeting people with a list who are actually the ideal prospects for what you offering. Sending college students a marketing piece for reverse mortgages won’t work and offering seniors a first-time homebuyer program won’t work either.
Mistake # 4: Not tracking your results
We tend to use the “throw it up against the wall and see what sticks” theory when it comes to our marketing and mailings. As I mentioned earlier, you need to make sure that every penny you invest in your marketing can be tracked and accountable to you. Money is tight right now for most so you must make sure that every dollar you invest can be tracked and is accounted for. That means you need to know what results you got from each campaign. Here are the tools I use.
I use this tool to let people call in for a free report. Users can call in 24 hours a day, seven days a week, 365 days a year. I use a different extension for each marketing piece or ad.
I use this tool as an online system to let people visit my site, 24 hours a day, seven days a week, 365 days a year, and receive a free report. The beautiful thing about this tool is that it will automatically follow up with these clients with follow-up messages encouraging them to call for an appointment or fill out an online application. I use a different sub-domain or URL (Web address) for each ad or marketing piece.
Free report? Million dollar idea?
You’re probably saying, “Huh?” What’s a free report? Let me explain. Think about what you do every day. A client calls and you give them your sales speech. You tell them why they should use you instead of the competition and convince them to apply after you answer their questions. What if instead you put it all in a report they could read.
► It would have the answers to all their questions.
► It would have testimonials of all your past satisfied clients.
► It would explain why they should use you instead of the competition (your expertise, not price).
► It would tell them what to do next.
► It would allay their fears.
So here’s the process …
Someone you have targeted who fits the profile for the program you offer responds to your ad or marketing piece. They go online or call a toll-free number to get a free report. The free report is really your sales message, so they now call you already sold on using you!
That’s important for a couple reasons. First, it allows you to get your message out to the right people without spending all the time you now take trying to convince them. Next, each ad or marketing piece has a different toll-free extension number and Web address. That way, you can track every penny you are investing and make sure that you are getting the proper return on your investment. That’s the beauty of Emotional Direct Response Marketing.
Mistake # 5: Not having a deadline and call to action
The people who read your marketing pieces need you to tell them what to do next. Your ad or marketing piece must have a reason for them to take your desired action now! If you give them the chance to put your piece down so they can “think about it,” they will never respond. You must get them to do something immediately!
One way to do this is to offer a bonus for meeting with you, like a gas card or other incentive. Give them a deadline … it could be a time-sensitive deadline:
You must respond by______to get________!
Or, it could be a quantity discount or call to action:
I have set aside ____________ of gas cards for the first who are ready to achieve the dream of homeownership or lower their payments.
Now that you have these mistakes under control, go ahead and start mailing and tracking those results. You’ll see a major improvement in your results quickly.
By the way … the first thing most companies and originators stop doing when things get a little tougher is their marketing. Look in your own inbox and mailbox and you’ll notice very few solicitations from mortgage companies. Now is the best time for you to start mailing since there will be less competition for your prospects attention. So, go ahead and review these tips and get your campaign going. This topic is so important that I have dedicated an entire module of samples and almost two hours of training on just this topic of direct mail online at www.loanofficerformula.com/join.
If you have a question you would like Brian to answer in this column, please send an e-mail with “Ask Brian Question” in the subject line to [email protected]
Brian Sacks is CEO of www.loanofficerformula.com. He has been an industry expert for more than 25 years, closing 6,000-plus loans totaling $1 billion. You can read Brian’s 32-page special report entitled “The Death of Mortgage Origination as We Know It” and “The 10 Things You Must Do Now to Survive and Thrive” at www.loanofficerformula.com/mp. This report sells for $97 and has been downloaded by more than 9,200 originators and company owners, but is free for a limited time for readers of National Mortgage Professional Magazine.