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Thinking Outside the Box Can Help Grow Your Referral Base

Jake Soley
Sep 10, 2013

A referral base is mandatory in order to survive the mortgage business cycle. Without a referral base, your business could be in jeopardy when the refinances dry up. Most loan originators think of networking with real estate agents, financial advisors and their community when building a referral network. While those are great ways to acquire new referrals, direct mail may be the most effective way to quickly build a referral base on a grand scale. For over six years, I have specialized in targeted marketing, with many of my personal clients relying on direct mail campaigns as a tool to drive new referrals into their business. Typically, referrals are generated from someone you have done business with or have closed a loan for. You build a good rapport with the borrower and due to the trust and confidence they have placed in you, they will refer their friends when they express a need for your services. Now think of direct mail leads as “pre-qualified referrals.” With a targeted direct mail campaign, you not only build a pipeline of deals, you also open the door for every lead that responds to become an ambassador for your business. Take, for example, a direct mail campaign of 5,000 pieces. On average, this will generate 50 in-bound leads and close at least 10 loans. So with only 10 of the 50 closed, what happens with the other 40 that didn’t convert? Are they worthless? These consumers expressed an interest in your company, so this is your chance to make a lasting impression that could double your inbound leads. By simply incorporating a request to refer two friends, those 40 inquiries could easily double to 80 new prospects. Consumers typically keep company of the same demographic, so if you’re using pre-screened data on your mailing campaigns, the likelihood of the new referrals being similar to the original borrower is considerably high. With this simple application, your mail campaign that generated 50 inbound calls now has the potential to be as high as 150 new prospects! Think of the possibilities with more direct mail pieces in circulation. The numbers are exponential. A common shortfall when building a referral base is in customer retention. It’s common for originators to forget about the borrower once their loan has closed. As time goes on and the loan is sold off to other servicers, many borrowers forget about their original loan officer when their need to refinance or purchase reoccurs. This holds true when it comes to referral business as well … if the borrower doesn’t remember you, who are they going to recommend their friends to? Instead, they turn to the current company that sends their monthly mortgage statement. To offset this potential loss of business, mailing your customers at a minimum of a bi-monthly cycle will keep you fresh in their minds. Simple letters of new company advancements, milestones or events will keep you in the forefront of their minds so that when their needs or the needs of their friends and colleagues arise, they immediately think of you. To maximize the effort, request referrals and offer incentives for referring friends in each newsletter. Remember: Closed loans require asset management. These borrowers can be as valuable to you after they closed their loan as they were the day you first spoke. Relying on a real estate agent to refer your business shouldn’t be your only option to generate more referral business. Putting a plan in place now with some simple strategies will build momentum and create a thriving referral business. In the ever-changing mortgage industry, having multiple options to build your business is a necessity and will keep you ahead of your competition. Jake Soley, an asset at Titan List and Mailing Services, has specialized in mortgage-specific marketing since 2006. Jake’s commitment to educating his customers on the proper steps to take when launching direct mail programs has catapulted him as a leader in mortgage direct mail. He may be reached by phone at (800) 544-8060, ext. 209 or e-mail [email protected]
Published
Sep 10, 2013
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