The Psychology Behind the Recovery

TheMReport — News and strategies for the evolving mortgage marketplace.

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Th e M Rep o RT | 25 Feature J im Blatt, president and COO of Mortgage Returns, likes to quote John Wanamaker about marketing. Wanamaker, the 19th century founder of Philadelphia's first department store, famously said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." For Blatt that pretty much sums up the marketing plan of most mortgage lenders. They are spending plenty of money, but they have no idea which, if any, part of their marketing plan is actually working. "If you don't know what your numbers are, if you don't know how you compare to your peers, then you are running blind," said Blatt, executive at Mortgage Returns, a St. Louis marketing company that works with mort- gage originators. "That is just not healthy in the long run." Nor is it wise in today's exacting, unforgiving, and dispersed mortgage industry. Carving out your piece of the lending business requires crafting an effective, persistent, and ever- evolving marketing plan. It may take time, effort, and, yes, money, but in the end a solid, smartly focused plan could prove the difference between surviving and thriving as a lender. "You have an industry that is down and all these things that say this business is tough," Blatt said. "You can look at it and feel over- whelmed. But at the end of the day, you have to get better at referrals. How do you market to them? How do you stay in touch with them? How do you show them that you add value every day?" Depending on who you talk to, the answers to those ques- tions differ, but only by degrees. There is consensus on several points, like knowing your mar- ket and who you are marketing to, as well as offering relevant information. Perhaps most importantly: Are you developing a relationship built on trust and transparency with the people you service? The mortgage in- dustry is, after all, about people. Even if you do all those things, the only way to know your marketing plan is delivering the results and goals you want is to evaluate your results. "Do a business analysis," Blatt said. "Do a comparison to your peers, and let's see how you are doing. At the end of the day, you may be doing great and now you know. But you may not be doing as well as you thought. And now you know that too." Market Slowdown, Communication Ramp Up A ccording to CoreLogic, the residential property, infor- mation, analytics, and service provider, last year home prices rose an impressive 11.5 percent, making it the best year for home- price appreciation since 2005. Moreover, 21 states have crawled back to within 10 percent of their peak property values. The bad news is things aren't looking as bright this year. "The outlook for 2014 looks a bit less robust as regulatory complexities and tight credit can be expected to cool the hous- ing market," Anand Nallathambi, president and COO, wrote in the company's November Home Price Index report, released January 7. That likely means the total number of originations will fall, but that isn't necessarily bad news for savvy lenders. Even in slumping industries, some companies do at least somewhat fine. It's a matter of knowing your market and where your customers come from. Take Jason Auerback, for instance. The successful division manager with First Choice Bank takes a two-prong approach to marketing. He identifies his refer- rals and buyers and develops a business plan around them. The easy part is pinpointing his referrals and buyers. All Auerback has to do is look around the settle- ment table during his loan closings. The way he sees it, every real estate agent, lawyer, accountant, financial planner, and homebuyer is a potential referral or future client. A few days after a closing, he checks in with each person to make sure they are satisfied. "Having an effective communi- cation strategy with those people Maximizing Marketing The days of the holiday card are long gone. Now lenders are turning their attention to surefire ways to maximize RoI and ensure repeat customers and referrals. By Bob Calandra "If you don't know what your numbers are, if you don't know how you compare to your peers, then you are running blind." —Jim Blatt, Mortgage Returns "If you don't know what your numbers are, if you don't know how you compare to your peers, then you are running blind." —Jim Blatt, Mortgage Returns

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