Marketing Strategies for Success
Whether you are an industry veteran or a newcomer to the reverse mortgage business, one option to stay ahead of the competition is to seek advice from a marketing specialist who can help you grow your business more wisely.
View advertising as an investment. Like any investment, you need to consider a Return on Investment (ROI), you need a game plan, and you need to define goals.
If you operate a small company with a limited marketing budget, then your best option is lead generation and direct-response advertising. Your ad should have a compelling message, a compelling offer, and some sort of freebie such as a complimentary consultation, free information kit, or video. Direct-response marketing can take anywhere from three to four months to attain a positive ROI, so originators should manage their “expectations.”
ROI and response rates depend on the media used. Different media have different response rates. About 10 percent of calls arrive within one to two weeks from radio, television, or newspaper ads, but the vast majority, roughly 90 percent, come in right after the ad is "dropped" (i.e., first appears). Here are some tips she shared:
- Direct Mail. Expect calls three to four weeks after piece drops;
- Magazines. Great way to advertise because of long shelf life and reach. A magazine ad investment takes as long as four to six months to recoup one’s investment;
- Newspapers. Offers your quickest response rate; about 90 percent of calls hit the day the publication runs;
- Have a strong message. It’s the key ingredient; it can make or break your ad campaign. Keep your message consistent;
- Use an 800 number (not 866 or 877, seniors think they are toll numbers) and repeat 800 number at least 4 times;
- Avoid vanity numbers [i.e. 1-800-ABC-CASH];
- Have someone manning your response desk 24/7. Auto-attendants are not recommended – they simply confuse consumers;
- Information should be clear and concise. Describe reverse mortgages, talk about myths, and be upfront about the costs;
- Consider the time of year and geography. Television and print ads do well in the summer in the Northeast when the target market is trying to escape the heat and is indoors, while California television ads are usually not as effective in early spring as many people are out of the house enjoying the weather. Holiday advertising is a waste – hiatus all advertising until after the holiday is over as people are not thinking about their finances;
- Diversify your media channels by marketing a little bit on television, radio, and print to see which one works best in your market.
The Internet and Six Factors to Track for Your Ad Investment
The Internet offers marketing opportunities because seniors are using the medium increasingly. About 60 percent of a senior focus group said they use the Internet everyday.
Set up a tracking system for all your different campaigns, so that staff who handle incoming calls know whether the person responded to a print or direct mail, for example. Track your marketing all the way to closing. Tracking and knowing costs helps you budget in the future and to know your ROI. Otherwise, you may be throwing away money.
There are six factors to track when making an ad investment: document campaign sources, costs, number of calls/leads from ad, appointments set, applications taken, and loans closed. All these factors are important in deciding whether your ad campaign was successful.
Branding, Free Media, and Direct Mail
Unless you have unlimited access to marketing funds, meaningful advertising may be too expensive for the average reverse mortgage shop. Lenders should look for opportunities to brand themselves in their local markets and explore free media.
Consider free media. Talk to local publications, TV, and radio. They are looking for information about reverse mortgages because it is new to them. You are making their job easier by giving them information.
Hit the road. Get on the speaking circuit. Find out where seniors congregate. Use collateral.
Collateral is a marketing term that refers to brochures, product profiles, and testimonials that informs the consumer and reinforces your message. NRMLA has collateral—in the form of our consumer booklets—that members can purchase and customize with their company information. This can save you the expense of developing your own materials, at least in the short term.
Direct mail can be very focused and effective if the list is good. A good list is everything with direct mail, so make sure you get a good list. Send a letter in an envelope, not a post-card. Direct mail should be run three to four times a year and rely on testing, testing, and testing to see what gets you a better response.
Training your staff to be competent in reverse mortgage programs so that they can be informative and consultative is critical. You are the educator, the consultant. No high-pressure sales tactics, be honest, talk about benefits, not features.