If you walked up to most anyone in our industry or any industry for that matter and asked them, “What is the difference between ‘sales’ and ‘marketing?’” you would be surprised at how many different answers you would receive. For many, the words “sales” and “marketing” are mistakenly used interchangeably. These terms are not interchangeable, and it is important that we establish a solid definition for these two words and have a thorough understanding as to their differences.
“Sales” is an act or effort of persuading or influencing someone to enter into a relationship with you and/or your company for the purpose of exchanging (transacting) something of value for products and services being offered by you and/or your company. At its core, selling or sales is transactional in nature.
“Marketing” on the other hand, is your effort to communicate information about yourself, your company and/or your products and services to those with whom you would like to transact business. At its core, marketing is all about communicating a message.
While sales and marketing are uniquely different, they share one common goal and objective … and that is to make money! If your marketing efforts are only costing you money and not making you money, you are not alone. By in large, the mortgage industry is not known for its marketing prowess. To many in the mortgage industry, marketing is a mystery. But in reality, the subject of marketing comes to all of us naturally and at a young age. Think back to our single days when that “special someone” caught our attention. One way or another we found a way to “market” ourselves to those that caught our attention. Clearly, some excel at marketing more than others, which is why I hope to make a difference with this article.
Bigger companies have a chief marketing officer (CMO) occupying the “C-Suite” along with all the other C-Level executives (see last month’s article for an explanation of the “C-Suite” and C-Level executives). But, the vast majority of companies in our industry don’t, and it is painfully obvious. That is why I advise you to have the attitude that you are personally responsible for your own marketing. Even if your company has a marketing department with a good marketing strategy, you should never rely on anyone else’s marketing efforts to achieve your goals and objectives. If you do, you are putting your fate in the hands of another and that compromises your potential for success. Those who want to achieve extraordinary success have to take ownership and personal accountability for their own marketing.
I was recently talking to a very successful originator and asked him, “What has been the key to his success?” And I should point out that he worked for a company that had an excellent marketing plan. His answer was refreshing and highlighted what I am talking about. He said, “While I am grateful for all that my company does in the area of marketing to generate leads for me, I have learned that if I am be successful at all times and in all market conditions, I cannot fall prey to becoming dependent upon someone else’s efforts to do something as important as marketing.”
He went on to say, "All it takes is one cut in the market budget and I could be in trouble. I believe it is my responsibility to do all that I can in conjunction with what my company does to market myself, my company and our products and services.”
Obviously the best of all scenarios is if your company has an effective marketing plan. Whether you work for a Wells Fargo, Bank of America or a one-person shop, to be successful, you must have your own marketing plan/strategy and you must work the plan consistently. The best part is that a good marketing plan doesn’t have to cost a fortune and you don’t have to be a creative genius.
The key is developing a marketing strategy that fits your business plan. It will serve as a solid foundation for your target market. You can develop a strong marketing plan by taking the following steps:
1. Determine that you are your primary product
I would suggest that when it comes to the mortgage business, you are your primary product that needs to be marketed. The color of money is the same at any mortgage company. The 30-year fixed-rate mortgage loan is the same across the industry, but who is offering that 30-year fixed-rate loan product varies by the same number as those offering the product. People make the difference in this industry. It is truly a relationship-driven business. So, you would do well to identify what makes you unique. The greatest differentiator is you! Identify those strengths that are unique to you and publish them loud and clear.
2. Determine your target market
You might think that everyone and anyone might be potential prospect. That approach lacks focus and will eventually fail. Once you determine who you are, I would suggest you identify with whom you enjoy working with. By doing so, you are well on your way to identifying your target market upon which you would do well to focus all of your efforts. When I was a loan officer 30-plus years ago, I chose the purchase market. It became my target market, and I did very well at it. What amazes me today is the number of loan originators that don't like or respect Realtors, yet they have chosen to focus all their efforts on the purchase market. Folks, if you do not enjoy working with Realtors, you should forget focusing on the purchase market. You'd do better to consider a consumer-direct marketing strategy. There is another old saying that goes something like this, “Find a career doing something you love to do and you'll never work a day in your life.”
3. Your competition
There are two primary ways to view your competition. They are either “friend” or “foe.” One perspective is by nature negative and usually based on insecurity. The other is positive and based upon a confidence/secure outlook. There is nothing better than a healthy relationship between two competitors to make each other stronger which will, in turn, typically help them to do a better job serving their common markets. We have several clients that are competitors in the same community where one company referred us to the other … again, one of their competitors. I have respect for these types of companies and individuals. I have come to recognize a common denominator amongst the most successful companies and individuals … they commonly have good relations with their toughest competitors. Given the fact that we have so many external threats aimed at our industry, doesn't it make sense to get to know and collaborate with others in our industry and within our own markets? If you haven’t already, get to know your competition. It will be good for both of you.
4. Identifying your niche
As I mentioned above, my target market for years was the purchase market. But within that market, I developed a real niche with the first-time homebuyer market. A number of my competitors, most of whom were friends, focused their efforts on the refinance market. When rates dropped, they went crazy and made a lot of money. I did well during those times, but certainly not as well as my half-crazed refinance buddies. When rates rose, however, I was the one to be envied. You would do well to identify your niche.
5. Creating awareness
It is essential that your target market knows you exist. In today's world, especially with so many social media tools, there are numerous ways you can create awareness without having to go with expensive advertising campaigns. I would recommend you go back and read the article I wrote in the June edition of National Mortgage Professional Magazine about social media, "Show Me The Money.” As I pointed out in that article, I primarily use LinkedIn and, to a lesser degree, Plaxo to connect with my market. Facebook is a great option, but I use it primarily for my personal connections. I have also launched a radio program called “Lykken on Lending” that is heard by thousands each week (if you are interested, go to www.LykkenOnLending.com to learn more). Additionally, I write articles like this one in National Mortgage Professional Magazine, as well as speak at conferences and conventions every chance I get. Trust me, it works! You can do the same. The key is finding out what comes naturally to you and to start there.
In some cases, it may be that you have to develop a skill such as writing. When I started writing, it did not come naturally to me. Nonetheless, I recognize its value and press forward to develop my writing skills. The point is that you are in control and you may have to step out of your comfort zone to create a greater awareness.
6. Creating credibility
I am sure that there are several ways that you can create credibility within the markets you served, but none is more effective then positive testimonials from past customers. The “must-read” book, Raving Fans, written by Ken Blanchard and Sheldon Bowles speaks to the importance of having satisfied customers willing to tell others about the positive experience they had doing business with you. If you make having “raving customer” as the number one objective of your marketing plan, you are well on the road to success in marketing.
7. The power of consistency
Question: “Why has the fast food franchise of McDonald's been so successful?” Answer: “They are consistent!” It doesn't matter where you go in the world, a hamburger and fries from McDonald's looks the same, tastes the same and is served in the same manner every single time. Another example is Starbucks Coffee. Any successful business must provide consistently excellent service over and over and over again.
8. Stay focused
In an industry where an inordinate number of us struggle with ADD and ADHD, nothing can challenge a solid marketing strategy more than a lack of focus. The key to staying focused is having a well-thought out plan and making a firm commitment to that plan. I cannot tell you the number of times that I was challenged in my commitment to stay focused on my marketing plan of pursuing the purchase money market when the refinance craze was going so strong. But it paid off! Another example of staying focused on a marketing plan were those executives who made the unpopular, but wise, decision to avoid doing sub-prime products and kept themselves and/or companies focused on the core Fannie Mae, Freddie Mac and U.S. Department of Housing & Urban Development (HUD) products. Many that yielded to the temptation of veering away from their market focus and started offering sub-prime lending lost not only their focus, but in many cases, they lost their companies as well. The key to maintaining your focus is found in making an informed and quality decision and then following through … staying focused on your commitment to your marketing plan.
As always, I welcome your feedback on this or any other article I have written or anything else you would like me to write about.
David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 101 or e-mail [email protected]