This past weekend, I received a direct mail marketing solicitation from a financial institution that I've never dealt with in the past. The marketing piece was a one-sheet from a ‘mortgage consultant’ affiliated with the lender, and it was capped with the breathless announcement: ‘If you've got the property, I've got the mortgage.’ It also provided a laundry list of the various products offered (everything from FHA loans to jumbos, even ‘programs for less-than-perfect credit’).
The mortgage consultant then signed off this one-sheet with the promise: ‘Count on me for the type of personalized service that has led (name of bank) being rated the number one bank in customer satisfaction six years in a row.’
Having been involved in direct mail marketing for years, it is easy to understand why this particular approach did not quite hit the mark. From a business standpoint, it is a wasteful endeavor to print up and mail out these pieces to people who did not request this type of inquiry.
From an industry perspective, however, this is even more troubling. One reason why mortgage banking is in its current state is because of reckless origination practices, particularly the vain efforts to equate the quantity of loans with the quality of loans. This direct mail piece, with its aggressive ‘Hey, wanna get a mortgage?’ approach, is wildly out of place in today's marketplace.
But enough criticism for now. Mortgage bankers interested in using direct mail marketing might want to consider a few pointers that will better serve their purposes for soliciting new business:
- Do your research before sending out direct mail. Mortgage bankers should have no problems identifying people who would be prospective customers. Broad mailings to a general population is a poor use of money and resources, but targeted marketing, while time-consuming, is ultimately more successful because it eliminates the waste of hitting up incorrect prospects.
- Consider postcards rather than one-sheets folded into envelopes. Printing costs and mailing costs are lower for postcards, and the recipient of inquiry will know immediately what is being promoted. Direct mail marketing envelopes designed to look like official business correspondence will mostly generate impatience if the recipient opens it to discover a blatant sales push – and that is assuming they don't think of it as junk mail and toss away the unopened envelope.
- Go easy on the hard sale verbiage. A mortgage banker should not act like a carnival barker, and statements like ‘If you've got the property, I've got the mortgage’ smacks of hucksterism. Instead, use the direct mail marketing text to introduce yourself and to state your qualifications within lending. At a time when the general public has a shaky opinion of mortgage bankers, it is important to stress quality control and a responsible demeanor.
- Realize the limitations of direct mail marketing. As promotional vehicles go, direct mail marketing has its limitations. Most experts in this area conservatively estimate a 2% to 5% response as being successful. For the glass-half-empty crowd, that means upwards of 98% of the mailing will not generate a positive response. Increasing the volume of the direct mail marketing solicitations does not automatically mean you will get more response. If anything, it could have the opposite effect as recipients who were initially uninterested in your inquiry begin to view your mailings as annoyances.
- Give the recipient a way to get in touch with you. Of course, there are people who respond to direct mail marketing, and there should be a way for them to follow up for more information. The aforementioned one-sheet I received listed the telephone number and e-mail for the mortgage consultant making the pitch. That was a good move. A better idea would be the inclusion of the URL for the lender's Web site, especially when targeting potential customers with no previous connection to the lending institution.
Changing times require changing strategies, and yesterday's direct mail marketing campaigns don't quite work in today's environment. A successful campaign will require more planning and less brashness. In the long run, however, the results could be very encouraging.
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com)
