The Target Compass

Following is a good primer for new and “still learning” originators and a reminder for veteran loan originators.
My secret to marketing directly to consumers is my unique “target compass.” It has allowed me to enjoy a generous income over my past 15 years in mortgage banking while building a residual income for my future.
As with any directional compass, mine has four essential components:

Target Market:
Identify your target market and learn everything you can about that target market. People who live in apartments with children who are paying $1200 a month in rent in a certain zip code who would save $2500 – $7500 in taxes is a great example. Some examples of target markets that I use:

  • FHA Buyer
  • VA Buyer
  • First Time Buyer
  • Credit Problem Buyers
  • Recently Divorced
  • Specific Professions:
  • Doctors
  • Nurses
  • Dentists
  • Teachers
  • Police and Security
  • Government
  • Firefighters
  • Financial Planners
  • Business Executives
  • Pilots
  • Local Business Owners
  • Specific Geographic Areas:
  • Cape Cod
  • Martha’s Vineyard
  • Nantucket
  • Vacation areas
  • Specific names of towns or communities
  • Brides and Grooms
  • Students (College)
  • First Time Homebuyers
  • Renters – Apartment and homes
  • Move Up Buyer/Seller
  • Move Down Buyer/Seller
  • Corporate Relocation
  • New Construction
  • Rehabilitation
  • Refinance Borrowers
  • Corporate Buyer/Seller
  • Executive Buyer/Seller
  • Resort Property Buyer/Seller
  • Parent’s of Children Going To College
  • Investment Buyer/Seller
  • Second Home Buyer/Seller
  • Vacant Land
  • Lakefront Property Buyers
  • Zero Down Buyers
  • Low Down Buyers

Target Time:

This is a critical navigational tool for creating a constant flow of new customers. For example studying the timing of brides and grooms and their buying habits, clients that bought their first home with you and researching when they will possibly be moving up. Taking the time to research each of the above target markets and their appropriate timing is a critical piece of your journey.

Target Medium:

Selecting the right medium is a fun part of the trip. A client may call you because they received a flyer on their card which had one of your strategic business partner’s on the back offering a “free pizza.” Some of the examples of the media that I use with great success are:

  • Flyers
  • Home Magazines
  • Newsletters
  • Yellow Pages
  • Inserts
  • Business Cards
  • Stickers
  • Post cards
  • Seminars
  • Workshops
  • Client Celebrations
  • Direct Mail
  • Classifieds
  • Free Publicity
  • News Stories
  • Personalized Clothing (Sweaters, Shirts, Jackets)
  • Personalized Jewelry (Watches, Pins)
  • Personalized Pens
  • Buttons with Messages
  • Display Advertising Pizza Cover
  • Telemarketing
  • Popcorn Boxes
  • Strategic Business Alliances
  • Ad Bench
  • Bill Boards
  • Magnets (Refrigerator)
  • TV
  • Radio
  • Poster Notes
  • Door Hangers
  • Weekly Shopper
  • Church Bulletins
  • Welcome Wagon
  • Restaurant Placemats
  • Area Maps
  • Bulletin Boards
  • Toll Free 800 HelpLine (Automated Prospecting System)
  • Videos

Target Message:

This is a huge piece that must be mastered—and here are some ideas that have worked well for me:

  • Daily automated home searches (value added service for your pre-approvals Home Finder Service (Valued added service for your pre-approvals)
  • Zero Down Payment
  • Toll Free
  • House Payment the same as Rent Payment
  • Huge Tax Benefits
  • Low Down Payment
  • Free Information
  • Free Money Savings Ideas
  • Free Reports
  • Recorded Message
  • Call 24 Hours a Day
  • Free MLS Link (Value added for your pre-approvals)
  • Consumer Awareness HelpLine
  • Best Buy Hotlist
  • Dream Home Hotline
  • Check your Credit Free
  • Free Home Seller’s Marketing Kit
  • Home Loan Service HelpLine
  • Select-A-Loan: 599 Home Loan Programs
  • Fire Your Landlord
  • Free HomeLoan Finder Service
  • Limited Time Offer (Create Scarcity)
  • Free-Recorded Message
  • Special educational reports

Like any navigational tool, it must be used with fine precision in order to gain the outcome that you are looking for. It takes research, focus and extreme dedication. If your marketing is presently not compelling your prospects to call, you may have a problem with your target, your time, your medium or your message or a combination. When you balance all four areas—you will create a wonderful flow of new customers that with continued work will turn into “advocates” of your service and be your residual income in the future.

by Cindy Worrell

Finding New Ways to Show Customer Appreciation

Auto races are won by margins as close as milliseconds, with the victory being held for those who demonstrate incredible teamwork through precision, speed, and creativity.  Just as mechanics and other teammates make repairs and refuel in a matter of seconds for their driver, our industry sees similar success belonging to mortgage professionals who have surrounded themselves with a winning team and marketing approaches that are designed for keeping “the edge.”   The following are some consumer-direct strategies that have been effective for me, and that could work for you as well.

Special Client Celebrations
Hosting special events for past clients including their children, extended family, friends, and neighbors is effective because it helps develop and strengthen our relationship in a non-business environment, while being hosted at our business office.    Annual events that we have hosted include:

  • Holiday Magic Show in November — We hire a magician to entertain past clients, business suppliers, families, and friends.
  • Family Gingerbread Making Day in December — We invite customers and their children to make gingerbread houses, from material we provide.
  • Annual Fall Fest in October — Sponsored jointly with our local farms, we offer pony rides, pumpkin  selection, apple cider, and Vermont cheeses.
  • Money Day – Spring Showcase — In January we offer mini workshops with a tax accountant, financial planner, attorney, home inspector, and appraiser.
  • Puppet Shows in February/March — A professional puppeteer entertains customers’ children.
  • Other successful events are Family Movie Night at a local theater, Summer barbecue with games, Holiday Egg Hunt, and Wine-Tasting Evening.

Hosting Clients at our Office
First impressions last forever, so we try to pay attention to this very important detail.  Some suggestions are:

  • Soft baroque music playing in the outside entrance to the office.
  • Prior to the client’s arrival, have a welcome sign, including their name.  It doesn’t take long to print one on your computer.  Also, make sure the receptionist greets your client by their name.
  • Clients are served a delicious cold beverage such as Nantucket Nectar.
  • Upon completion of my presentation, clients receive an “Advocate (past clients who have referred two or more clients during the last year) Worry-Free Teddy Bear” that is holding a scented candle and a small package of jelly beans with a note reminding them of the importance of their “advocacy.”  The material is attractively wrapped in a see through decorative wrap.
  • Each client also receives a “Motivational Journal” to take notes and pictures of their homebuying journey.  We include an instant photo of them.
  • Clients are given their own personal “Homebuying Resource Package” that is filled with valuable information including: homebuying and financing resource books, Strategic Business Alliance Directory (businesses offering discounts and free gifts for my clients), “Congratulations on Your Purchase” letter, “75 Types of Turbulence that I will be managing for you” letter, our mission statement, referral postcard and letter, and “We Need Your Help” Postcard.

Client Surveys
The feedback from your customer’s perspective is like gold.  Here is how we do it:

  • We call a random selection of clients within a few days of the application and ask how their experience has been so far.
  • During our initial meeting, we mention that their feedback is critical to our continued commitment to improvement and we will be asking them to “Take Our Temperature” and we would value their honesty.
  • At the end of the transaction, a written survey (complete with self-addressed, self-stamped envelope) is sent to our client, the listing real estate agent, the selling agent, and the closing attorney.  We use two different surveys.  One is for our direct client and the other is for our business partners who were part of the process.  An important part of the survey is asking for their permission to use any of the comments that they shared; these pieces can be very helpful as “third-party endorsements.”

Sponsor Youth Sporting Events
Sponsoring little league baseball, football teams, basketball teams, softball and soccer teams is a great way to give something back to the community.  But it is also a good way to get to know the parents of your players.  They will see the team jerseys, banners, programs, and will attend the banquets.  This allows you plenty of opportunities to get to know the parents-your future clients and advocates.

Stickers and Business Cards
Promote special loan programs, your website, your 800 help line service, workshops, and client celebrations with unique stickers (flashy colors, shapes, designs, lettering) and individual business cards which can be designed very inexpensively at office supply stores or your local printer.

As mortgage banking professionals, we all know that details make the difference.  Hopefully some of these marketing ideas will provide big payoffs for you.

by Cindy Worrell

Market Makeover

“A quarterly loan update has proven to be the single most important marketing effort that I have created and distributed to my clients.”

My partner and I have a small mortgage company with two full-time employees and five loan officers. I have been an originator for about 10 years and this is my third attempt at getting a mortgage company off the ground. We’ve been in business for nine months now and things are going alright, but I need some advice on how to push my business to the next level and how to do it on a low budget. My partner and I had a mortgage company two years ago and at that time we had two loan officers. We tried to get it up and going, but we struggled due to a lack of marketing capital and unforeseen equipment outlays. The business folded and I went back to working for someone else. I had a couple good years with them and decided to strike out into business ownership again with my partner.

Our company’s niche is foreclosure loans. We solicit people in foreclosure to refinance and we have several investors who are willing to finance these types of loans, if conventional refinance routes are unavailable to the borrowers.

I would say that right now our business is 70 percent foreclosure refinances. Another 20 percent is derived from debt-consolidation, seconds and only about 10 percent is purchases.

We want to become more diversified and add more markets. I know the regular marketing techniques — newsletters, telemarketing, advertising — but I need some advice regarding low-cost marketing and ways in which I can get some cash infusion into my business. Are there any small business loans out there that could provide financing, so that we could leverage ourselves to do more advertising?

We’ve tried the gamut of marketing. We even tried outside telemarketing. We contracted an out-of-state company to do the job, and they failed to complete it, and we received very few calls from the work that they did. Now we can’t find the company to get them to finish the job that we paid them to do. We spent money on things and it’s just money that’s lost. I really want this business to survive and I truly believe that the third time is a charm. Any recommendations would be appreciated.
DW in California

Brian Farley
Pride Mortgage Incorporated, Provincetown, Mass.,

I admire your desire to own and operate a successful mortgage company, since this is your third crack at it. I’ll give you a bit of my background, followed by some suggestions that I hope will assist your effort. I had a 15-year banking background when I went to work for a small mortgage company as a full time originator. I carved out a niche in financing second homes located in resort areas, basically an “A” credit, conforming lender.

After a few years, I decided that I wanted to work for myself. I began by contacting all of my clients and referral sources. They overwhelmingly supported my decision and pledged allegiance, and I convinced my processor to come with me.

I incorporated my company and I applied for the necessary licenses in the state where I was to operate. I employed an attorney to review all loan forms and documents to ensure my compliance. I chose a loan operating software system (Calyx) that would work best for my company. I wanted to take advantage of the technology in the marketplace (very important!) so I solicited investors that participated in FannieMae’s Desktop Originator and FreddieMac’s Loan Prospector programs. I found a small, inexpensive office space and purchased used office furniture from a local distributor. I paid cash for all the start-up expenses, about $25,000. I was up and running and my total focus was to originate loans.

Broadcast fax is a great, inexpensive way to communicate to Realtors, and other referral sources. I sent announcement cards to all of my clients. The referrals started to come in. We closed the first loan during the first week. When the year ended, I was proud to say that I doubled my production, and I was honored to be included in the Mortgage Originators Magazine Top 200 Originator list.

It takes a lot of hard work to start your own company. You have a 10-year history in the originating business. The first thing to do is contact each client that you’ve done business for and let them know about your enterprise.

I made a decision not to hire loan officers in the beginning, because I had confidence in my own ability and I did not want to baby-sit loan officers. Although I do not know the strength of your origination team, I believe that starting a company with five loan officers is very tough. Many company owners think that they must have a few loan officers to ensure a steady stream of business. Absolutely not! You spend so much time managing and assisting them, the time when you should be originating. Do what you do best — originate.

I see that your niche is foreclosure and debt-consolidation loans in the subprime area. I agree with the need to diversify. Try to pump up your purchase market. Many subprime shops do not think of Realtors when soliciting for loans. It is amazing how many Realtors do not know that buyers can actually buy property when they have troubled credit. Teach the Realtors in your market. Send out some broadcast faxes about your special programs; offer to teach them about the certain types of purchase loans that are available to buyers. You may be surprised with the response. Let real estate attorneys, CPA’s and financial planners know that there are programs available for their clients. Do not assume that they know what is available in the mortgage industry.

Focus on the service that you provide, I cannot stress that enough. Be sure that you are establishing long-term relationships with your clients. You may present a future-conforming, loan-refinancing option to clients. If you provide them great service, they will want to continue to do business with you. If you have a 10-year history in the business, I believe that you have a gold mine in your database.

Continue to read M.O.M. each month; it contains a wealth of origination ideas. Attend seminars and continuously look for investors in the market that can provide unique programs.

The Small Business Administration may offer low-cost business start-up loans. Contact a local office of S.C.O.R.E. (Service Corps of Retired Executives) to help evaluate how the SBA can help. I certainly hope that the third time is a charm!

Daniel B. Smith
Senior Vice President and Regional Manager
Republic Bank, Plymouth, Mich.,

I hope the third time is a charm for you and your partner, but suspect that you will continue to have problems if you don’t change some of your mindset and business fundamentals.

You indicate that you have either worked for, or owned, four different mortgage entities over the past 10 years. You had a couple of good years while you worked for someone else and have struggled with self-employment. Have you considered that your “chronic migrations” to different companies may be affecting your “client retention strategies,” and their ability to recall whom their lender was when you originally wrote their loan? I believe that your moves and a lack of a solid retention plan are costing you considerable money, which could be used to fund additional marketing ideas.

You state that you have tried all kinds of ways to bring in leads to your sales force, such as newsletters, telemarketing, media and print advertising. All the loan officers in my office are required to participate financially in any marketing endeavor we undertake. Basically, because I’ve learned that when you give someone something, they don’t value it. You need to put more reliance on your loan officers to go out and make things happen, instead of investing (and even borrowing) funds to pursue an elaborate marketing strategy.

While marketing is important, it does not require a large budget. A simple business card and a sincere smile are powerful marketing concepts that do not require monetary infusions. I call this the “Shoe Leather Campaign” – get out of your seat and put your feet to the street. The least expensive marketing tool is always a satisfied past customer. If you want true success, you must make it a mandate to stay in close touch with your customer base at all times. I have found “ACT! Database Software,” at a cost of $129, to be extremely helpful in doing just that. It can track every one of my past clients, and it allows me to document each and every contact I have with them.

If you don’t already have it, acquire ACT! Use it to send mailings to remind past customers that you still exist and are available to help them with their needs, or the mortgage needs of their friends and family. I send a mailing once a quarter to all my past customers. It doesn’t matter what it is, as long as it has my name, phone number, and face on it.

Another low-cost strategy is to simply pick up the phone. Call your clients. Almost everyone knows someone who is thinking about buying, or who is buying a home. Ask for those referrals, or just call and say, “How are you doing?”

With regards to your niche, I think that having a focus and expertise in one or two areas is not a bad thing. I would suggest that you diversify your business into a broader base, which should include some Realtor contacts. You could take advantage of your background in foreclosure lending to route business to select Realtors, who would no doubt be grateful and send you some business in return. For instance, when you discover a foreclosure situation, for which you can simply not fund a loan, send that prospect to a favorite Realtor. If your homeowner can’t get a new loan on their property, they will need a Realtor, and quick, in order to liquidate it. Also, use your customer base to offer refinance or purchase options to former foreclosure borrowers. Track your loans, and 12 months down the road revisit those people and pull them out of a bad loan (high interest rate) into a good one. Play on the fact that you kept a roof over their heads when they were down and out, and ask for their referrals as well.

I would caution against borrowing funds, unless it is for operational expenses related to starting up your business. In that case, you may be a candidate for a Small Business Administration loan. However, borrowing money, when you can’t afford to pay it back, is the kiss of death in business. I would not advise you to take on additional debt to fund a marketing endeavor, when the methods discussed above can be employed at a very low cost and can result in high returns. To me, the mortgage business is very simple – take good care of your customers, stay in touch with those customers, keep them informed, and go to the bank.

Starting a mortgage operation involves considerable financial risk and tenacity and I applaud your efforts. Please use my response as a third-party endorsement to urge your loan officers to take responsibility for generating their own leads. I believe you will become effective when your sales force becomes effective.

Outdoing the Competition

“One of the most costly things a business can do is throw money down the drain on an ad budget that’s too anemic to be effective. Make no mistake, there’s a bottom line that must be met to get noticed.”

Advertising is a basic cost of doing business. You’ve probably accepted that. But, keep in mind, it’s also a shoot out — a place where you face competitors daily to conquer and defend valuable territory. The battle that’s fought here, if it’s to be worth fighting, is expensive. There are, however, ways to compete economically with companies that spend more than you can afford, and still profit from the investment. Listed below are 10 ways to get the most bang for your buck from your ad budget.

Spend Enough
One of the most costly things a business can do is throw money down the drain on an ad budget that’s too anemic to be effective. Make no mistake, there’s a bottom line that must be met to get noticed. If you can’t cross that line, you might as well spend your money on office supplies. Take the time to research your competition, compare ad budgets, and determine the cost per prospect you’re comfortable with. Then develop a realistic budget with measurable goals. Now you’re funding an investment rather than paying an expense.

Give your campaign time to work. As with any investment, the cost of a constantly changing course almost always outweighs any potential gains from sudden shifts in strategy.

Insist on an integrated campaign, carrying one unified message across all your communication platforms. This lets you develop all of your materials for trade shows, collateral, direct mail, print advertising, promotions and everything else as a package (think package deal) and saves you time and money spent controlling the process.

It also allows each piece to pick up where the last one left off, effectively multiplying the communications productivity of everything you develop.

Be Selective
Be selective with your market and start out with a smaller piece of the pie. Concentrate on reaching only the people from whom you stand to gain the most. You can use the growth from that market to fund your marketing efforts to others.

Market Inward
Target your existing customers to promote growth and up-sell products. Also, your own office, lobby or building can serve as a valuable advertising medium. Banks and retail merchants are constantly using the space they already have to display promotional materials. You can do the same, indoors and out.

Try Timelessness
Good marketing materials are expensive. Don’t spend a fortune on collateral that will be quickly outdated and need to be reprinted. Invest in timeless designs that are easy to update without enormous expense.

Trim Production
Extravagance has its place and purpose in advertising, but you needn’t rely on Hollywood effects or celebrity photo-shoots to deliver your message. Often, simplicity is the hardest worker you have. Keep in mind, however, that your message and image are critical factors in this contest of persuasion and any effort to cut costs should only follow careful consideration of the potential risks and results.

For instance, stock photography and graphics can save a great deal of time and money, but run the risk of being used by others in the same industry. Likewise, a big, bold headline can stand-alone and save even more, but it also needs to be a good headline to be effective.

Place Creatively
You want to appear to a select group as though you are everywhere, all of the time. If you work with an ad agency, it should be able to get some terrific package rates and long-term discounts from the media that will benefit everyone involved.

Consider the size of your ads as well. For instance, junior-page ads and half-page spreads can save you money while maintaining dominant impact. If television is on your menu, then consider local cable, market by market. With costs as low as $25 a spot (sometimes lower) cable can be a very cost-effective way to carefully target individual markets.

Don’t look a gift horse in the mouth. Many companies sponsor co-op ad programs to provide funds to local advertisers in exchange for a logo or mention. If none of your current partners offer such a program, you may want to try developing strategic alliances of your own.

Go Online
The Internet is an invaluable resource for business that should be exploited. It allows you to research and evaluate scores of solutions without the expense of additional staff or outside services. It also enables you to broadcast lengthy, detailed, and persuasive information to a global audience in a format that’s easy to customize and update.

You can develop even more suggestions on how to compete on a less-than-level playing field. Even if you don’t have the high ground, you can still take the hill with a sound strategy and some clever creative ideas. The worst thing you can do is go unnoticed while someone else takes the prize — simply because they tried.

by Chris Brantly

Developing an Ethnic Niche

“Homebuying seminars should be an integral part of your ethnic marketing efforts.”

Harvard University’s Joint Center for Housing Studies forecasted that within the next 10 years, two-thirds of all newly formed households will be minorities. The exploding cultural diversity within the next decade provides mortgage companies with an opportunity to develop a marketing strategy to assist these new homeowners, increase your business base, and help you develop your own mortgage niche.

The California Association of Realtors met for a daylong summit to discuss minority issues and the sensitivity of those issues within the real estate industry. They have even formed their own sub-associations within the NAR. The sub-associations include the African American-Oriented California Association of Real Estate Brokers, The Chinese Real Estate Association of America, the National Association of Hispanic Real Estate Professionals, The Hispanic Council of Realtors, and the Korean Real Estate Brokers Association of Southern California. Just think of it. Within the Latino community alone, you have Cubans, Mexicans, and Guatemalans. Within the Asian community, you have too many cultures to even begin to list.

Last year, my family and I rented a cottage on Lake Michigan. The resort that we stayed at was beautiful. It had small cottages nestled in sand dunes and overlooked the lake. There was a large stone house for activities such as pool, volleyball, and tennis. However, when we arrived we found that we were the only family who spoke only English. Almost everyone else was bilingual. The resort was a prime vacation location for the Lithuanian community, whose families had been coming to the resort for the last 25 years. Now we were the “outsiders” trying to learn a new culture. While most of the younger people spoke English, the elders spoke their native tongue. Living with and learning another culture was a great, unexpected educational experience for us. Sitting around a campfire one evening, I met a man who was a mortgage loan officer for a bank in Chicago. His clients included a large number of Lithuanians, his niche market.

With Realtors developing their own niche associations within their state and national associations, it is evident that mortgage lenders need to adapt to the changing marketplace.

One of the first steps needed to expand your customer base is to learn your community’s demographic makeup. Secondly, you need to develop your marketing strategies for reaching these different groups. Here are some consumer-direct marketing ideas.

Hire staff members who can relate to different cultures. You don’t need to be Asian to market to the Asian community. When I managed a mortgage company in Houston, Texas, some of my best referrals came from real estate agents who worked for an Asian-owned real estate company. I learned that several families live in one house. They pool their resources, income, and assets in order to qualify for a mortgage loan. I was able to find a couple of mortgage programs that fit their needs. These real estate agents also had rich clients who lived in Tokyo and bought rental homes, which I also financed for them. I am not Asian, but was able to understand their culture and needs when it came to their housing requirements.

However, speaking the language and being able to communicate in writing is just an added plus when you develop your diverse mortgage staff.

Advertise on ethnic radio, TV stations, and newspapers. Not many mortgage companies advertise with these media. The costs to advertise using them are extremely inexpensive because you are marketing to a limited audience. You may even ask to be interviewed, have an article you wrote published in the local newspaper, or host a mortgage talk show once a month.

Produce a video. Develop an informational video about how to buy a home and how to qualify for a mortgage. Speak the language. Don’t use technical mortgage terms. Your radio, TV, and newspaper ads can include an offer to mail prospects a free videotape that can be passed on to friends and family. (As an added benefit, the videotape can be given to real estate agents who serve ethnic homebuyers.)

Develop a mini-mortgage application. Have someone write the application in different languages. This is a non-threatening form that provides you with preliminary information to determine the best mortgage program for your ethnic clients. After all, the questions could be in a different language, but the answers are usually local employer information, names of banks and account numbers, and yes or no answers.

The mini-application could be distributed at meetings and cultural performances. It can also be sent to real estate agents or inserted into the videotape jacket.

Hold seminars. Homebuying seminars should be an integral part of your ethnic marketing efforts. Be sure to have a translator present at your meeting if you don’t speak the language. Show your videotape, distribute your mini-applications, and offer to provide those attending with a free copy of their credit report.

Use your voice mail or company answering machine. When someone calls your office, you may want to record messages in several languages so potential clients feel comfortable working with you from the start. For example, they could have the option to “press extension number two” if they speak Spanish.

These ideas are meant to get you thinking about how you can use the same consumer-direct techniques, but adapt them to different niche markets. By starting to develop your plans for the diverse homebuying market, you are investing in the future of your business.

by Karen Deis

Refining Your E-Strategy

“There is marketing strength in numbers by creating partnerships with professionals that share a common interest-providing services to homebuyers”

The American public appears to have an insatiable appetite for technology these days. The dot-com stocks are making a seemingly unstoppable upward climb, and web addresses and Internet access seem to dominate the advertising landscape.

The mortgage industry is caught up in the same technological euphoria. Every mortgage company, or affiliated service or supplier, clamors about its technological capabilities. But where’s the beef? How much profit has really been generated by e-commerce mortgage activities? There is a mixed bag of results, which indicates that a mere e-commerce presence is not an easy street to profitable loan production. The potential for success, then, lies within the strategy.

For as long as I can remember, mortgage originators have been looking for new ways to expand their business and serve customers better. New ideas, however, do not stay new for long. As innovative techniques prove viable, originators who look for easy, effortless tactics to produce instant sales results will be quick to jump on the bandwagon—making differentiation difficult to maintain. E-commerce fits this description.

The notion that there must be an easier or more certain method to generate hot leads and ensure satisfied customers can be a powerful attraction. E-commerce has that allure, but it is important to realize that it is a tool. You cannot afford to get caught up in the hype without a well-planned e-commerce strategy. Otherwise, it is no different than other quick-win marketing and promotional concepts in which success is short-lived.

No matter what the size of your business, your e-commerce strategy must be in sync with how you do business or how you plan to do it better. The Internet and new technological applications offer unprecedented opportunities to help grow your business as long as the implementation is in line with your business model and part of a well thought out strategy. In other words, technology should be an integral part of how you support your business. If you think in those terms, you will be able to develop a plan to stay on track even though you may not be able to execute the strategy all at once.

The Internet and web-based technology are strategic tools that mortgage companies of all sizes can leverage to generate and build relationships in order to increase production. The key is to use technology to enhance the company’s positioning, not to redefine it. For example, use the Internet as a simple communications vehicle, a marketing tool to generate leads, a business service that creates value in partnerships, a convenient source of relationship data, a means to coordinate work activities, and a tool to attract and retain quality loan officers.

Regardless of how you use the Internet, you should consider both current and future applications and make them an integral part of an overall business strategy. If a company’s business philosophy positions its loan officers as possessing unequaled financing expertise and provides easy access to mortgage financing with a high degree of convenience and personal attention, then the company’s Internet strategy should employ tools that facilitate and deliver that promise.

Communication Vehicle
Websites offer a simple, cost-effective tool for communicating between customers and loan officers. It doesn’t replace other tools, but it can certainly increase communication and create real and perceived value. The number of households across the United States with Internet access continues to expand. It is important to do business the way your customer wants to do it. Let them choose the phone, face-to-face, or Internet communication. Providing customers with easy Internet access during the loan process offers them convenience, while giving you the opportunity to capture their e-mail address for future communication.

Keep in mind the positioning example. Companies want loan officers to be seen as an expert. It also wanted them to be easily accessible and offer great convenience and personal attention. The functionality of its website should support and enhance this positioning. The customer should be able to submit an application, check the status of a loan in process, or ask a question. Loan calculators, informative financing information, and other tools that support the idea that loan officers are a knowledgeable mortgage professional belong on their websites.

Internet as Lead Generator
The Internet can be a lead generator. You can get leads for free (although it takes continuous work) or you can pay for them just like other media. Unless you are technologically inclined, I would seek expert advice in building a website that will get noticed with sufficient frequency in order to generate leads. You can also pay for leads from sources such as LendingTree, Inc. ( Internet lead generation is an important business source today, and it will only get bigger. You need to get in the game.

What amazes me about Internet leads is how slow some companies are to respond to them. This even seems to be true with companies that purchase leads. People use the Internet in large part because of the speed in which it delivers information. That means a quick electronic response is critical. Personal contact as a follow up can also be critical. Utilize auto-responder features in the software you’re using to automate the initial response. Automate the pre-qualification formula to provide an automated response so the customer is served quickly regardless of the time of the request.

Market Your Partnership Service
Affinity partnerships are powerful marketing tools. There is marketing strength in numbers by creating partnerships with professionals who share a common interest–providing services to homebuyers. The combined referral strength of Realtors, appraisers, title companies, and insurance agents can be substantial. The Internet provides the tools to keep affinity partners informed. It enables them to request and track service and helps ensure that service levels meet or exceed customer expectations.

The Source of Relationship Data
A critical element of any marketing program and e-commerce strategy is realizing the power of a customer database. Keeping customers requires continuous communication. Maintaining a database of current customers, past customers, referral sources, and prospects is essential. There is power in using a database for communicating on a regular basis to customers, but that power increases exponentially when you analyze the demographics and know as much about your customers as possible. The objective is to add value to the customer relationship through those services that are part of your support or affinity team. This information will lead to ideas and new services that will create a stronger customer relationship.

Coordinate Workflow
It helps to have workflow and process monitoring tools integrated into your loan processing software. But even if this tool is not available, you can create a manual monitoring system that can be enabled by the Internet. The loan officer and support team should communicate with the customer, as well as real estate agents involved, through loan closing. Milestones, such as underwriting approval, appraisal, and notice that the insurance binder has been received can be flagged to generate an e-mail, fax, or phone call to homebuyers and real estate agents. This is the type of value-added customer service that keeps them coming back and helps originators generate leads.

Attract Talented Salespeople
Good people, and particularly good salespeople, can go to work just about anywhere. Powerful marketing and communications tools can attract loan officers. The attraction is made easier when companies do not see the value in supporting loan originators with tools for success. An e-commerce strategy can help attract talented mortgage professionals.

When it comes to the mortgage business and the effect of the Internet or e-commerce, what we know for sure is that we are certain to see significant change. The mortgage and financial services companies are implementing Internet technology at an increasingly rapid pace. This new medium creates room for applying greater creativity and customer knowledge. In the long run, bigger companies may have advantages, but smaller and more nimble firms will initially have the edge. What’s next is up to you, but now is the time to build and execute an effective Internet strategy.

Marketing to Baby Boomers

“Many of these people retire with very healthy IRA accounts. Know what the guidelines say about cash in the bank and ‘compensating factors.'”

Seventy-six million baby boomers were born between the years 1946 and 1964. In fact, it is reported that someone turns 50-years old every seven seconds. In Harry Dent’s latest book, The Roaring 2000’s, he predicts that the greatest economic boom in history will occur during the next eight to 10 years. It’s all due to the baby boomers reaching their peak spending years.

Think about it. Those people born in 1946 are 54-years old now. Those born in 1964 are 36-years old. For the next 14 years, there will be a huge number of people turning 50—which means that the economic boom has just started. Those who want to specialize in marketing to the over-50 group will have a major opportunity to make a good income and to establish a niche market before others realize the potential.

The boomers are expected to live longer than any generation in history, but they are planning on retiring earlier than their parents did. However, you can’t put all seniors into one group. When marketing mortgages to them, you need to know the definition of the four categories of the over-50 group.

The first group has children who are in college (or have moved out of the home). They are alone for the first time in their lives. They will continue to work but will go on more vacations and get more involved in social activities such as golf, clubs, or volunteer work. They do not need as much space to live in, but it’s important to them to maintain their home.

Then there are those who retire. They have worked for a company all of their lives, and they have a good pension and retirement program. They want a maintenance-free home because they want to play and not work. They will also try to relocate to areas of the country where other retired people congregate and will be buying homes, town homes, and villas in resort areas. Other people retire, but then start a business in the home. The entrepreneurs will work even after they formally retire from their regular jobs.

The multigenerational households are the people thinking about retiring. But children, parents, or grandchildren have moved in with them and they have to change their plans and lifestyle.

All of these groups will require a change in housing needs. This means buying down; buying up; home improvement; or buying townhomes, condos, and villas. With this in mind, you have the opportunity to be viewed as the financial expert by this large consumer group.

Before you decide to tackle this niche market, consider the additional education that will be helpful. Know your Fannie and Freddie underwriting guidelines regarding social security and pension income needed to qualify for a loan. For instance, the guidelines allow you to “gross up” the income (to qualify) if it is considered non-taxable income. Many of these people retire with very healthy IRA accounts. Know what the guidelines say about cash in the bank and “compensating factors.” In working with seniors, not only will you be a loan originator, you will also need to be seen as a financial advisor. It may mean taking some educational courses or teaming up with a financial planner. Expand your knowledge of home improvement lending and reverse mortgages. The issues facing the over-50 crowd are different than those concerning a young couple.

In marketing to this audience, you need to appeal to their changing household and changing financial circumstances. Where do you find these people to market to in the first place? Word-of-mouth advertising and referrals are very important. If you treat a senior well (and have a good customer-for-life program), the news will travel quickly through their social circles. They are very well established social circles—they have known their friends for a long time.

In addition, you can offer seminars on buying and selling their homes, with an emphasis on long-term financial planning. When holding these seminars, be sure to include a financial planner who is experienced in working with seniors. Also, you should include a real estate agent. There is a new National Association of Realtors (NAR) designation called a Senior Real Estate Specialist (SRES).

Advertise to the children of these seniors. The older parents often rely on the advice of their children when it comes to buying and selling a home. When advising them about mortgages, be prepared to counsel both the seniors and their children.

Advertise your mortgage services in resort area real estate magazines that highlight lake properties, mountain cabins, town homes, condos, and beach properties. When seniors are planning for retirement, they already have an idea where they want to live.

Advertise your second home mortgage programs to this market. They are buying their second homes now (in their peak earning years), so they build equity in the home upon retirement.

The stock market section of your newspaper is a good place to advertise. Many of these people have their retirement funds invested in the stock market and mutual funds.

Health and finances are the two main concerns of most people over the age of 50. A common dilemma is whether they will outlive their funds. People are living longer, and they worry that social security and pension income will not be enough. They will be living on a fixed income, so they may need to sell their home and buy another one so they can balance their budget. However, the senior market is not afraid of debt so they understand how leveraging their cash—taking out a mortgage—will help them live on their fixed income.

When developing your marketing pieces, provide something extra. Offer to include a financial planner at your mortgage application appointment. Recommend the services of a real estate agent who specializes in the senior market. Establish a one-stop shopping experience and market it that way. And don’t forget to use larger print in your ads and marketing pieces. The 50 plus prospects don’t like to (and sometimes can’t) read the fine print.

by Karen Deis

Making Money on the Net

“You must have an Internet presence in order to take advantage of available online marketing opportunities.”

It’s already a couple months into the new millennium, and you don’t have a website. Or you do, but you know you’re not maximizing your site’s potential for success and profitability. If you find yourself in either of these situations, it’s time to develop your online strategy for this year and beyond.

First you need to determine your online focus. You will either want some combination of making money, branding your website’s name, or simply having an online presence in order to generate credibility with your clients and professional relationships. If you don’t have a website, your focus should be on developing one. You must have an Internet presence in order to take advantage of the available online marketing opportunities.

Those who don’t have a website need to consider the development options. You can either purchase a canned, off-the-shelf website or you can have a site custom-created for you. The choice you make will depend on your budget and the kind of functionality you are looking for on your website. A canned website can cost you anywhere from $300 to $5000. A custom site can cost anywhere from $3,000 to $500,000. So understanding what you want first will help you determine the route that makes the most sense for you.

To fully understand the profitability of your website, you need to recognize and understand the ongoing costs involved. This will allow you to start creating a budget for the future and to look at your costs in order to increase your profits–not just as overhead.

One fixed cost is the monthly fee you pay to a company that hosts your website. Typically, the cost is under $100 for most mortgage broker websites. A variable cost is what you will have to spend money on advertising your site. Most of these sites charge a monthly fee for your banner advertisement or listing. The fee ranges from a few hundred to several thousand dollars depending on the amount of traffic you are trying to generate. The other variable cost is based on upgrading your website, which you must do from time to time.

To be profitable, it is important to try to match your variable cost to the amount of business you want to close. If the market is doing well and you want to go out and get more business, you should increase your variable cost by advertising more. If you have enough business and cannot handle any more, reduce your advertising. If for some reason your website is not generating business, you have two choices. You need to either reduce your advertising to minimize your variable costs, or increase your advertising to see if you can generate more business.

Whether your website is new or you’ve had it for a while, it’s time to take a look at what you are doing in order to assess your site’s current profitability.

Your website should have an easy to find and easy to fill out application or pre-qualification form. The site should also have your company’s contact information readily available, a feature that will encourage someone to bookmark your site, a daily market update and updated rates section, and concise content.

So now you have a website that is ready to generate leads. The first area to look at is how you are responding to the inquiries received through your site. In general, you can expect an average direct-marketing response rate of anywhere between 5 to 10 percent of all visitors. You need to make sure that you’re ready to respond quickly to these inquiries. Part of a quick response is based on a quick retrieval of leads from your e-mail box or from your website. Make sure you have a constant online connection. This means that you are ready to be notified the moment a message is sent to you. Look into providers that offer a constant connection such as DSL, frame relay, or to a fractional T-1 line. If you are able to respond quickly to your leads, you can expect higher conversion ratios from inquiry to loan file.

Early on, you need to choose an online business model. Two basic business models are the “low cost leader” strategy and the “local mortgage broker and banker” strategy.

The first option involves emphasizing lower rates and overall costs. A company that has been successful with the low cost leader strategy is ( The margins have been from 0.5 to 0.75 points over wholesale. succeeds by making it easy for potential customers to make buying decisions through its website. They do this by clearly displaying rates and locks in periods or closing costs. As a result, customers typically apply through the website.

The companies often use loan consultants to work with clients. The strategy’s focus is to recruit business people who have good credit and want to save money. It will not work as well with consumers who are not organized, who need a lot of handholding during the loan process, or with customers who have complex situations. These companies are working on a high volume and slim margin basis. They expect the customer to be organized and to provide documentation quickly on request.

The idea behind the second strategy is to target borrowers in a specific geographical area and create a local originator image. There is a greater emphasis on service than price. This can be done by advertising in local newspapers and regional websites and also by creating affiliations with Realtor partners or other related industries. A company that has been successful with the local mortgage broker and banker strategy is Dalton Mortgage at Dalton Mortgage’s site clearly explains that this is a local, family-owned business that has links to websites in the Cleveland area. The site is friendly and provides up-to-date rates, loan products, calculators, and other helpful features.

You can also use the same approach as a subprime broker by not putting rates on the site and by stressing that you can handle difficult situations and borrowers who have been turned down before.

To further enhance your profitability, you will want to explore different marketing strategies. Aside from the conventional online advertising avenues, such as banner ads and directory listings, there are many other opportunities available in order to generate more business to your website. Areas to consider are partnerships, permission marketing, and affiliate programs.

A number of lenders have developed unique partnership arrangements in order to expand their online business and increase their profits. For example, Chase Manhattan Mortgage Corp. recently announced its agreement with, a multilingual homeownership website. An initial pilot program will focus on both Spanish- and Korean-speaking communities in the southern California area. will help Chase Manhattan Mortgage reach a greater minority audience through the partnership program. and introduced their strategic partnership last year. It will involve creating a multi-functional co-branded mortgage center that will provide visitors of the website with online home financing services. Homebuyers visiting the site will have direct access to’s mortgage information, rate comparison, and online loan application. Links to the mortgage center are placed throughout the site.

Permission marketing focuses on converting visitors to leads. If your current conversion rate from surfer-to-inquiry is between 5 to 10 percent, instead of focusing on driving more traffic to your site, look towards increasing your site’s conversion ratios.

Seth Bodia is considered to be one of the world’s foremost online marketers. He says of permission marketing that, “Every commercial website should be set up to accomplish one goal. Your website should be 100 percent focused on signing up strangers to give you permission to market to them.” He argues that permission marketing is more efficient than interruption marketing or media advertising.

The goal is to develop and deliver relevant, valuable, and judicious information to consumers who have given you permission to do so. One of the more common ways this is done is through a newsletter or interest rate registration on a website. When someone signs up for this, you have successfully received permission from the visitor to market to him or her in the future. Your job now is to be sure to deliver what you’ve advertised. Now, your chances of acquiring business is greater because you’ve “broken the ice” by offering valuable and relevant information.

Affiliate marketing is also a powerful marketing tool. By making affiliations, you can earn money from visitors who may not ready to do a mortgage with you. You can create an affiliate program to generate traffic to your site. You can also market other companies’ products, services, and web addresses on your site and get paid based on traffic the affiliates receive from your website.

When generating traffic to your site, you want to create relationships online with business partners. You should target sites that offer similar products or that reach a similar demographic of people. Two good examples of affiliations a mortgage company can make include automobile and Realtor sites. The affiliation with a car dealer’s site could be a simple arrangement. You might place a mortgage advertisement in a prime place on their site and pay them for every visitor you receive through that ad.

You could set up the same arrangement with Realtors as you did with the car dealer’s website but, since you have more important ties with the Realtor industry, the way you structure the affiliation will probably be more involved. You could harvest relationships with Realtors by offering them a free link to their website, or by offering them a realty section on your site. The goal is to establish a strong online relationship with business partners that is a win-win situation for both parties. Be sure to follow the appropriate RESPA guidelines.

The area of affiliate marketing of product and services is showing tremendous potential. The basic premise is that not everyone that comes to your site is looking for a mortgage. A person needs a mortgage once every five to seven years, so you need to determine if you can cross-market to them while they are at your site in case they are not ready for a mortgage. If so, make sure you are cross-marketing related products.

An example of a site that uses the strategy effectively is E-LOAN ( E-LOAN offers both car and credit card loans on their site, which is a good way to make additional income from those visitors that don’t get a mortgage.

The drawback to this kind of marketing is the potential to lose business by the distraction of other offers. Don’t clutter your site with different offers. Choose products and services carefully and make sure that your competitor does not advertise on any site that you recommend to your clients.

Despite the growing competition of mortgage companies online, there are many way to run a profitable site. Pick a strategy that meets the goals of your company. Make sure your site includes the basics such as an online form and application. Respond quickly to all inquiries because your online customer expects swift replies. Understand your site’s cost structure so you can calculate your cost per lead and eventually your cost per closed loan. Find a niche in your local market including partnering with Realtors, creating affiliations with other online companies, purchasing niche advertising in mortgage malls such as or, and getting permission from visitors to your site in order to continue marketing to them. You are now on your way to running a successful and profitable online campaign.

by Lovina Worick

Personal Brochures Set You Apart

Starting a serious marketing campaign with a personal brochure allows you to introduce yourself in a professional, memorable way.  Real estate agents have utilized this for years as a way to relate on a personal level with potential clients.  Consumers need to feel connected and secure with the person they will be entrusting one of the biggest purchases of their lives to.  As you develop visibility and sincerity with a personal brochure, you give people the chance to get to know you and then understand how you will be able to help them with their financing needs.  You are now one step closer to becoming their trusted advisor.

Don Hobbs, chairman and cofounder of Hobbs/Herder Advertising, a company that has designed over 35,000 personal brochures for individuals and companies in the real estate profession, spoke with me regarding what makes a personal brochure successful.  He stated that, most importantly, the personal brochure should be the cornerstone piece of a successful marketing campaign that will open the door to greater success.  A well-developed brochure can eliminate or lower sales resistance as it helps with the beginning of a relationship based on a personal or emotional connection.

Consider the details of putting a personal brochure together.  First, I highly recommend you have professional help with the copywriting, graphic design, and printing.   While utilizing a desktop publishing program and printing the brochures on the office copier may save money, you will not look as professional and appealing to clients, which defeats the original purpose of having a personal brochure.

The cover of the brochure should be attractive and interesting;  attention-grabbing in a way that calls to be picked up and read.  Focus on things that reflect your personality and the niche you are trying to reach.  You can’t be all things to all people—decide who you are going to target and speak to them throughout the brochure.

Once you have the prospect to the point of reading your brochure, the content will be what convinces them to use your services.  As you decide to put together a personal brochure, remember to create “you” on paper. “Why I would like this person” needs to jump from the page.

A photo of you inside the brochure is essential for people to feel a connection.  Definitely do not use a glamour shot or a digital photo your secretary took.  Most photographers offer what is called an “executive photo,” which will portray you in a professional manner or “personality” shot.  If you haven’t had a photo within the last three to five years, it is probably a good time for a new one.  You want to make sure people recognize you when they see you in person!

Your personal biography and photos should be 60 to 70 percent of the content.  This is about you and should be written in a story format as if someone else were speaking to your potential clients.  As the story unfolds, remember to address things you have in common and accentuate the potential benefits to the reader.  Telling a story will present you as something other than a machine-like, one-dimensional salesperson.  Your brochure can make an immediate and lasting emotional impact—people feel a need to connect with those they do business with.  If they didn’t, Internet loan companies would be the only ones doing business today.

Listing company strengths can also add to the depth of your brochure.  If you work for the number-one company in town, state it.  If your company has been serving local clients for 20 years, state it.  People realize the importance of a solid company behind an originator and will want to know that you are supported by a flourishing company.

Personally, I like a few testimonials on the back page.  This is the final statement, and using third-party comments on your abilities will strengthen the other messages of the brochure.  Try to use statements that reinforce your personal philosophy or statements from a high-profile person that your readers might recognize.  For example, if you are targeting teachers and have helped the local school district superintendent with his mortgage, that name and comment will add strength to your brochure.  Well-voiced   testimonials can link together everything else said in a brochure.

During my years as an originator, I consistently used the tag line, “The Highest Compliment I Can Receive is a Referral from a Friend.”  This truly stated my business philosophy of working on referrals and becoming a friend to each client.  A tag line does not have to be loan-related, as long as it connects back to you as a person.  For example, one professional displayed herself as a gardener and used the slogan “Nurturing Great Results.”  Be creative and find a short sentence that portrays you as a trusted resource.  In a personal brochure, the tag line is best placed on the front cover and then below the testimonials on the back, reinforcing your position as their mortgage lender.

Remember that the best business connections are personal.  Stay away from bragging and boasting statements throughout your brochure.  Rather than boast of your degrees, designations, and impressive closing numbers, state your business philosophy in a way that allows to readers come to understand your desire to help them.  You want to relate with potential clients, not impress them.

Getting it Read
Now that your brochure is put together, printed, and ready to go, how do you get it in the right hands?  This step is crucial; since you have spent quite a bit of time and money developing this marketing tool, you need a plan to distribute them for the highest rate of return.  You basically have two avenues of distribution.  The first is potential referral partners, such as Realtors, financial planners, CPAs, attorneys, and builders. The second are possible borrowers.

In distributing brochures, the success rate of it being read and kept for any length of time goes up dramatically if the recipient has met you or knows of you prior to receiving the brochure.  I term this “warm marketing,” (versus cold marketing where they have no prior knowledge of you).  A few ways you can make sure your marketing is warm is to have some type of introduction before mailing or handing out the brochure.  With referral partners, this can be done by a phone call introduction, or you may have met them through some type of networking.  With potential borrowers, you might have talked to them on the phone or in your office.  Do not give out your brochure when first introduced, as this can be interpreted as pushy.

Once you have a chance to be introduced to a potential referral partner, follow up a few days later with your brochure and a note stating you enjoyed meeting them.  The same goes for borrowers; after your first contact with them, mail a letter along with your brochure, thanking them for their time.  By meeting or contacting them first, you have hopefully sparked their curiosity to know more about you.

Reaping the Rewards
Now for the crucial element—contact after the brochure has been received.  This is the step most originators don’t take, thus leaving their brochure and first impression to be thrown in the trash.  You have invested time and money in this marketing tool, so make sure you receive the most out of it.  A day or two after you know your brochure has been received, follow up with a phone call if it was a potential borrower.  Ask if you can be of any further assistance and if they are ready to make an application yet.  If you have given your brochure to a potential referral partner, follow up with a visit to their office or an invitation for lunch to discuss how you can help their business.

We are in a highly professional business and must continually seek to find new referral partners and clients.  By utilizing a personal brochure, you are giving people a chance to warm up to you and hopefully feel comfortable about calling you and requesting your services.  This is a tremendous tool to set you apart from your competitors and help create an image of being a professional and a trusted advisor.  A personal brochure will draw more people to you and help you to create an incredible referral-based business—a fantastic goal of any marketing strategy.