The mortgage industry has seen a significant decline in refi activity in the recent months and the trend looks like it will continue into 2014. The change to a purchase market is happening quickly: the Mortgage Bankers Association has estimated that purchases will make up 48% of originations by the end of the year. That is up from only 26% at the beginning of 2013.
The trend toward a purchase market began as rates crept up slightly, and home values started increasing. The improved labor market, broader economic recovery and decreased mortgage delinquencies also aided in this shift. Consumers who have been sitting on the fence about selling their home are beginning to realize now is the time to make the jump, making this an opportune time for consumers to purchase their next home.
These variables combined have developed a hot purchase market throughout the country. The adjustment to this purchase market focus has left many mortgage lenders aggressively searching for ways to compliantly gain market share. Developing strong referral partners is going to be critical. Creating relationships with Insurance Agents, CPAs, Divorce Attorneys, Human Resource Directors, Financial Planners, Builders and Real Estate Agents will provide for a stable business model for the future.
Strategic referral relationships create clients for life who are more apt to refer others as well. This builds a consistent flow of referral business to everyone involved.
The challenge remains how to develop strong referral relationships with dynamic marketing campaigns while remaining efficient and compliant. The solution demands more than just pulling together disparate e-mail, print and other marketing components. It requires the use of centralized marketing automation.
Centralized marketing automation will greatly enhance referral relationships in an engaging, compliant manner while allowing loan officers to focus on what they do best: originate and close loans. Such marketing automation is easily used to address specific referral segments and groom strong relationships.
As relationships with referral partners continue to develop, customer retention efforts may then feature the partner in print and e-mail. In-process e-mails are able to provide for consistent touch points when a borrower is moving through application, keeping the referring party in the loop as well. After closing, automated retention programs can be equally branded for more future business.
Take a minute to truly comprehend the power of what can be done to create, build and nurture a referral relationship. Utilizing centralized marketing automation opens critical doors to long-term opportunity in a purchase market.
In addition to building referral partners, a purchase market is going to require marketing to first time homebuyers, those looking to down size as well as move-up buyers. These segments must be marketed to consistently and most importantly using different media.
Mortgage lenders have to focus on what is going to give them the ability to work smarter not harder when competing for purchase buyers. Again, utilizing centralized marketing automation technology provides corporate compliance and detailed reporting features for streamlined marketing efforts.
Using print as well as e-mail is going to be the game changer for many mortgage lenders, when done at a centralized corporate level. It is a way to differentiate from the competition, as many have opted to use e-mail alone. Utilizing a centralized marketing automation system will make it easy to implement compliant campaigns across all channels using print and e-mail together.
The benefit of centralized marketing automation is the ability to provide consistent, compliant, streamlined marketing from one location. This is known as a top-down marketing strategy.
Top-down marketing enhances business opportunities to build consistent loan pipelines, increase referrals and establish a recognizable brand. This strategy will drive not only a purchase market, but also a strong organizational growth plan.
Utilizing a centralized marketing automation system in conjunction with a top-down marketing strategy is going to enable mortgage lenders to excel in a purchase market. Such a structure would be implemented at a corporate level, and would need little or no interaction from loan originators. This places the lender in control of driving consistent, compliant marketing.
Inside a centralized marketing automation system is a full database to segment contacts and target them individually. In a few minutes, a person can send a campaign with print and e-mail follow-up to all the appropriate contacts in the company database, which includes those of the entire origination staff.
Such a task can be completed quickly due to an expansive library of content that can be utilized as is or even customized to best fit the mortgage lender’s brand and marketing initiative. It is imperative that content and campaigns allow for modification and customization to set one lender apart from others.
Utilizing unique marketing pieces and diversified outputs will make a mortgage lender stand out from the competition. Too many lenders use the same pre-created templates for marketing activities. When this is done on a large scale, how is a consumer to tell one company from another?
Customizable marketing activities that are managed through a centralized marketing automation platform will drive unique brand awareness and company initiatives that are not “cookie cutter.” You cannot differentiate yourself from the competition if you are using the exact same email and print marketing templates, with the only difference being your logo.
Having the ability to create a custom company library is how true differentiation is done, with centralized marketing automation. Consumers will then be able to distinguish you from your competition.
In a purchase market environment, creating targeted messages to specific consumer segments will yield the largest result. Gone are the days of a shotgun approach of “rates are low” e-mails or “now is the time to buy” postcards. Utilize campaigns that are custom designed for those first time homebuyers: for example, edit a first-time homebuyer template postcard to send your message and follow-up with a custom email. You are then reaching that segment on a personal level.
The shift to a purchase market is quite a change for the mortgage industry, but the pressure for compliant, managed marketing is also in full swing.
With a top-down marketing strategy implemented by a centralized marketing automation system, compliance monitoring and management are taken care of. A loan originator can even have access to build individual custom campaigns if they choose and the lender can approve or make changes prior to the activity being sent.
Each marketing activity that takes place is logged and authorized by the lender for compliance, eliminating the worry of unapproved marketing being sent by loan originators and creating a full audit trail for auditors.
The shift to a purchase market is not going to be the easiest transition for many lenders, but it is possible to capitalize on this change. Focusing on the creation of strong, diverse referral partner relationships is going to be imperative. The key to these types of relationships is communication. The use of centralized marketing automation will make all communication consistent and engaging to these referral partners.
Creating custom campaigns to target the specific consumer segments will boost results and create brand differentiation. Centralized marketing automation will make it easy for a lender to send unique print and e-mail pieces to large groups without having to involve the loan originator.
Loan originators are able to focus on their pipelines and nurturing of referral relationships while marketing is being produced to drive results for them. The lender is in complete control. The production of print and e-mail campaigns is done quickly and efficiently. An entire library of activities can be created from scratch or by utilizing pre-designed pieces. Connecting with referral partners, consumers and even past clients becomes seamless and consistent. Most importantly, all this is done in one location that is compliant and automated.
Refinances will continue to fall off and redundant email-only marketing is just not going to cut it anymore. Take hold of this purchase market shift by embracing the technology that is available to you today. This is what can separate you from the competition. Choose to be consistent, engaging and compliant while doing things your way, not within the constraints of “cookie cutter” systems.
Judy Margrett is President of The Turning Point, Inc. The company’s flagship product is MACH3, a mortgage-specific CRM and automated marketing engine. With more than 20 years’ experience in mortgage banking, Judy was an early advocate of technology-based marketing solutions, especially for nurturing key business relationships. Recognizing the demand to maximize resources within business enterprises, she works closely with industry leaders to guide The Turning Point’s development of advanced mortgage-specific solutions. She can be reached via e-mail at firstname.lastname@example.org.