President
The Stern Mortgage Company
Palo Alto, California
Stats:
Years Originating: 20
Categories:
Customer Referrals: 40%
Returning Customers: 30%
Attorney/Financial planner: 20%
Realtor: 10%
Special niche: none
Purchase Business: 15%
Refinance: 85%
Most Effective Marketing: Community involvement, customer mailings
Applications Taken Personally: 99%
Support Team: Assistant and receptionist (shared with two other originators)
Age: 60
Annual Vacation Time: Eight weeks.
Rick Stern has been originating for more than 20 years and has initiated a number of different marketing strategies to attract customers. It has helped him generate a loyal customer base and an overflowing pipeline. Last year, he closed $100,218,000 and 332 loans.
Stern, president of Stern Mortgage Company in Palo Alto, Calif., has always done some of the mainstream marketing, including a “drip method” of staying in touch with his client base. “I have a good database of every client with whom I have closed a loan over the past 20 years,” he says. “They get at least one mailing from our firm each quarter.”
Stern, 60, notes that the mailings range from 4th of July and Memorial Day cards, to humorous greeting cards and postcards that detail how a loan product has helped a client achieve success. Some of the pieces are produced in-house, while the color postcards are outsourced. They also send HUD-1 statements at the first of the year to help customers prepare for their tax preparation. “With each mailer we remind our client base that we depend on their referrals for our business. Not only have our clients returned, they have referred their parents, children, friends, neighbors, business associates, and others to our firm. Asking for referrals helps.”
In addition, Stern runs ads in both daily and weekly newspapers. The ads typically include a photo of him in a humorous pose—putting a golf ball into a manhole cover. “It helps keep our name in front of agents and others,” he says.
He also is a guest lecturer for financial planning courses. “That has paid huge dividends,” he explains. “It’s amazing—within a week after my presentation we’ll get calls from students who want to refinance or purchase.”
Stern is adamant that originators must develop some type of ongoing marketing campaign. “If you don’t, it’s out of sight, out of mind with your customers. In today’s competitive marketplace your pipeline will dry up. They’ll forget you. I actually do more marketing now than I did when I started originating.”
However, he sets himself apart from many originators because he places a greater emphasis on “simple” networking as a way to keep his referrals flowing. “My relationships have been the cornerstone of my success,” he notes. “Part of this has been the ongoing associations with stockbrokers, attorneys, Realtors and others. I see them at events, on the street, and elsewhere and they refer me to borrowers.”
Community involvement also plays a big part in Stern’s networking approach. “These associations have been fostered by being involved in worthwhile groups. Rather than just becoming a dues-paying member of the Palo Alto Chamber of Commerce, I got involved more than 20 years ago, and served in the various board positions, eventually becoming chairman.”
In addition to the chamber, he’s been a member and past president of the Kiwanis Club, and actively involved in the YMCA. “The level of commitment in each of these organizations is what leads to the referrals,” he added. “If all you’re doing is handing out business cards to other members, it’s a shallow relationship that usually won’t pay off.”
Stern also joined networking groups, including the Peninsula Executive Association, a leads group of 70 members who meet weekly to exchange referrals. “Once again, belonging and having been a board member has been extremely beneficial,” he notes. “I’ve now done more than 30 percent of the members’ loans and they have referred me to many others.”
He emphasizes the importance of being involved for the long-term. “It’s important to understand that none of these associations paid dividends the first year or two. I have seen many people join groups and leave after six months because business never came their way. The referrals follow after the relationships have been nurtured and developed over a period of time.”
Stern has encouraged his firm’s other two originators (his daughter Julie and Todd Flesner) to expand their networking opportunities as well. “Obviously, when you’re looking for groups to get involved with you need to find the ones with which you have an affinity, whose members have similar interests,” he adds. “Of course, it also helps that they are high-profile enough and thus in a position to refer you to many people.”
Stern has watched many originators succeed and some not do as well. His advice to those seeking higher levels of production includes being more aggressive about asking for referrals. “It’s amazing that so many people stop asking for referrals. Every time you ask you’re closer to the next deal.”
He cites a high closing rate, partially based on “client control” as another goal for aspiring SuperStars. “For example, 90 percent of our refi’s fund,” he says. “Part of this involves getting a commitment from prospective customers. We don’t want shoppers and always ask customers to come to the office. That way, we know they’re serious.” Also, he readily acknowledges the support of his assistants. “We couldn’t do this volume without the invaluable support of Maria Smith, our operations manager/assistant.”
While his refinance volume was close to 85 percent last year, Stern isn’t concerned about the slowdown in the refi market. He has devoted most of his career to creating loyal relationships that generate ongoing referrals. “There will always be a significant need for home loans and related financing. The people who only pick the low-hanging fruit (easy deals) will eventually disappear; those with a strong commitment to their client base and community will remain.”