The reference to SWOT (Strength, Weakness, Opportunity, Threat) as an analysis tool is well-established in business lexicon and Economics 101 in the beginning lessons provided to any entrepreneur. But due to the unique nature of the mortgage industry, many branch managers have failed to use it to clarify their current position and pursue a growth-oriented strategy.
Strengths and weaknesses
You should start by evaluating your strengths and weaknesses because these elements can be controlled and improved internally. First of all, your strengths go beyond your monthly revenue projections, the number of leads converted into clients and other bottom-line considerations. How may loan originators have you added to your staff this year? What is the average retention rate for your loan officers? Have you created an atmosphere conducive to loyalty and productivity?
Since most mortgage companies offer the same loan products, you need to use SWOT to determine your differentiation from competitors. If it’s just something mundane like low rates, you need to do some creative thinking. Ask yourself why your previous clients selected you.
Many mortgage organizations prosper by providing a unique product mix or serving a niche group. Some specialize in first-time homebuyers or jumbo clients, for example. Others work with lower income or lower FICO clients.
By listing your strengths and weaknesses, you will position your company in the overall marketplace, defining how you are different, unique and better than your competition. You may even create a written positioning statement so you will know exactly how to pitch your prospects.
Opportunities and threats
This second part of a SWOT analysis may prove critical to your ultimate survival. It involves a situational analysis of factors outside your office and how they impact your organization. For the mortgage industry, a key opportunity or threat comes from the Consumer Financial Protection Bureau (CFPB). What are their latest regulations and how nimble is your company in adapting to them?
Competing mortgage organizations represent the most obvious threat. You should conduct the same analysis of your own company in the strength/weakness SWOT component for the opportunity/threat they may pose. Don’t be afraid to learn from your competitors, especially those with well-established reputations. Surviving for the long term in today’s mortgage industry means you must be doing something right.
Referral sources represent a key component in the SWOT analysis. Real estate agents who serve as a source of clients for your competitors may significantly interfere with your marketing process. The use of advertising and public relations to generate publicity can help either you or your competitor. Many mortgage organizations are taking to the radio, and some even have their own shows! Try to capture the full dynamics of your local marketplace in the “OT” component of your SWOT evaluation.
Take some time to create a SWOT diagram and work on it for at least a week to fully evaluate your marketplace situation. Evaluate product mix (jumbo, reverse, etc.), competitors, licensing requirements, referral sources and other elements unique to the mortgage industry such as turn-time and the impact of the CFPB. Finally, create a positioning statement as a guide for future action.
Jean LeBlanc is director of marketing for Guaranteed Home Mortgage Company. For more marketing tips, download the eBook, 13 Ways to Juice Up Your Marketing in 2013, by going to joinghmc.com and clicking on the eBook offer midway down the page. She may be reached by phone at (914) 696-3400 or e-mail firstname.lastname@example.org.