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   ARTICLE   |   From Scotsman Guide Residential Edition   |   January 2012

Take a Staged Approach to Refinance Marketing

Generate leads and close loans by mixing direct-mail and e-mail campaigns

The Federal Reserve has promised to keep interest rates low through summer 2013. The effects of this announcement will be felt throughout the economy, but nowhere more so than in the mortgage industry.

As mortgage brokers work to convince homeowners that now is the time to refinance, there are a few proven marketing techniques they can use to ensure their voices are heard. By using a combination of these three stages of marketing, originators can maintain a steady flow of refinance leads.

Stage 1: Direct-mail postcards

It’s the “direct” part of direct mail that makes it effective. Going straight to prospects with your message is vital because many people do not understand the mortgage industry — and misunderstanding translates to tentativeness.

With postcards, you can bring your message straight to prospects. According to the 2010 Direct Marketing Association Statistical Fact Book, 79 percent of households read or skim direct-mail advertising. And with postcards, the effect is doubled because there is nothing (e.g., an envelope) between prospects and your message.

The trick with postcards is to convey your message in a short, punchy headline. This can be difficult for complicated subjects like refinancing. Fortunately, the low-rate promise from the Fed gives you the perfect pitch, especially when you use a targeted mailing list. Many people will respond to a postcard. Some may need more information, however. That’s where the next strategy comes in.

Stage 2: Direct-mail letters

A direct-mail letter is an excellent way to reach prospects who may be on the fence or who are not even considering refinancing. Letters work in these cases because originators can go into more detail. This helps dispel the confusion and mistrust prospects feel when confronted with advertising.

To maximize the effectiveness of direct mail, use a combination of postcards and letters. The people who respond to postcards can be removed from the list, and those who do not respond get a follow-up letter explaining why this is a great time to refinance.

There are people who will respond to one but not the other, so it is wise to use a balanced approach between the two. Many potential clients would consider refinancing, but only if they are contacted in the correct way, so pay attention to your response rates for each stage.

Stage 3: E-mail follow-ups

In this crucial stage, originators can turn leads into loan closures.

Once prospects call in, you know they’re interested. A refinance is a big decision, however, and some customers may not be ready to make it right away. E-mail follow-up is vital. E-mail gives you the ability to keep in contact with hundreds, even thousands, of leads.

Originators can greatly improve closure rates by using an auto-responder to send automatic e-mails to leads over a specific period of time. For instance, say you talk to someone on the phone, but they decide not to proceed with the refinance right now. Add them to your e-mail campaign, and they will receive a set of e-mails explaining why they should not miss this opportunity to refinance. This will likely produce a second call.

As these marketing campaigns progress, you can target audiences more effectively and save on mailings. Mortgage originators who employ a marketing strategy like this are more likely to receive call-backs and close refinances.  


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