Over the last four months, our team has offered insight for mortgage direct marketing that include how to properly model your data, design and develop your mail pieces and how to properly vet your marketing company. This month, we will touch upon how to extract the most from your marketing efforts through volume and mailing consistently.
Marketing can be boiled down to one simple concept … it’s a numbers game. Lenders with the capacity to market large universes enjoy great returns, as they capture the most prospects within their target market. However, for those lenders and brokers without a large marketing budget, consistency in efforts will play a major role in return on investment.
Let’s assume that in a universe of 10,000 prospects, there are 100 unique responders (one percent response). To capture all 100, you must mail all 10,000 prospects. If you break up the 10,000 prospect universe into smaller drops of 2,500 for example, you may not get the same response rate on each drop until the total universe is completed. Why? Because how do you know where all of the responders lie within the data? The first pull may only have 15 of the assumed 25 responders, while the remaining records have the others. If you do not have the budget to mail all 10,000 at once, your best return will come once the entire universe is completed, at which that point you can make the fair assessment of the overall campaign. While drops as small as 2,500 pieces can be effective, anything less is shown to have inconsistent returns. This is because you simply cannot capture enough “meat” within the universe. In reference to the aforementioned 10,000 universe, if you were to mail only 1,000 pieces per drop, you would need 10 total drops to see the full potential return. Minimum quantity delivers minimum results, whereas maximum volume delivers maximum results.
Experienced marketers will tell you that response is not consistent, as many variables come into play on a weekly basis. These variables include market conditions, the general economy, talking points on the news, holidays and even the weather. However, by mailing consistently, you will not see the dramatic highs and lows experienced by those with sporadic drops. In doing so, you will build a sustainable platform that will allow for proper monitoring of performance and provide a true “calendar of results.” Lenders that market on a weekly or bi-weekly schedule typically see their return-on-investment (ROI) range from $3 to $16 for every marketing dollar invested. When establishing your direct mail goals, build your plans with the intent of mailing weekly and to mail as much as possible of your given universe.
K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail [email protected]