Finding and attracting good customers is all about preparation.

Growing your business is essential, and finding those perfect prospects can be extremely difficult. The benefits of having a reliable marketing campaign  are having the ability to grow at your own rate, and plan for the future no matter where the mortgage industry takes you. The following three factors MUST be considered before setting out to accomplish this task.

First, you have to be willing to pay for good customers. To find out how much, do the math: total dollars spent with your company minus cost of goods sold. Then, subtract your desired profit margin. What you have left is a reasonable amount you could spend to acquire a new customer. The average acquisition cost per customer in the mortgage industry is between $600 and $1200. If you’ve never done any marketing before, you might want to budget for the higher end of that. You can take that acquisition cost and multiply it by the amount of new customers you want per month to determine your monthly budget. Don’t worry if this number seems astronomically high. You will want to ramp up to that over a period of time.

Second, take a look at your sales approach. Do you hard sell people your product or do you wait for them to ask how they buy it? If you’re a salesperson, you’ll be able to keep your acquisition costs low. If not, you’re going to need to come to terms with spending more money to get someone else to do it for you. Maybe it’s the marketing piece, or maybe you’ll have to hire sales people. It is always more cost effective to do the work yourself, but anyone can have an effective marketing campaign regardless of their own sales ability. Knowing how you best sell will allow you to find the right type of marketing campaign for your own needs.

Three, dissect your close ratio. Some people know this number like they know their own birthday. Others will have to calculate it. To do so, take the number of loans you closed over the last 90 days and divide that number by the total number of “leads” (or interested prospects). That will give you a reasonable close ratio. One should find themselves anywhere from 5%-15% on average. Don’t think that you’re going to close any leads at 80% just because you can close referrals at that rate. This is marketing, not networking.

Key factors that contribute to the overall success of your campaign:

1.)    Planned Growth – How many new customers you want to add every month;
2.)   Acquisition Cost – How much you can afford to spend per customer;
3.)   Approach  – The best type of marketing to work with your abilities an your budget; and
4.)   ROI – The expected return on your investment.

Now that you know where you stand, you can start asking around about what marketing programs fit within your acquisition cost and your sales style. Talk to your colleagues about the marketing campaigns they’ve done that worked. Direct mail, mortgage leads, live transfers, data lists, etc.  These campaigns are all tried and true, and will fit into most any marketing strategy.  Don’t try to take this on yourself. You are a mortgage professional, not a marketing expert. So, let the pro’s guide you through the process: call a marketing firm, NOT A LEADS COMPANY. A marketing  firm. There’s a BIG difference.

You’ll want to talk with people that understand your business. There are a handful of these companies that will actually take the time to explain what works, what doesn’t, and why. You’ll be able to rule out certain types of marketing and advertising because they either don’t match your sales style, or they don’t match your budget. Better to know up front than after you’ve spent your hard earned money.

Once you find the right program. test it a few times on a small level. Don’t blow your whole marketing budget on the first trial. Test, test, and re-test. Once you prove it’s profitable, THEN spend every dollar you can spare on it. In fact, you might want to consider getting another credit card because you’re going to earn a lot more money than you’ll pay in interest!

Bottom line: you pay $X per customer and you want X number of customers per month. If you’ve follow this process, have a marketing firm that’s on your side and knows your goals as well as you do, you’ve identified your budget, your goals, and realistic growth for your organization, you can finally, truly, plan this growth with your marketing and feel good about the future of your organization.

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Marketing in 2013: The mortgage business is back!

FHA and HARP are the two big names in the industry. Use them! They are working great and generating some big waves in the business.

Mortgage rates are holding and holding at all time lows. Quit asking about whether they are going back up and get back to work! Make hay while the sun is shining! Mortgage rates have been dropping fairly steadily since 2002. FACT:  They are going back up. We just don’t know when.  So keep those files closing in the meantime.

FHA delinquencies are on the rise. This means we need to get as many people refinanced as possible right now. Get them out of FHA if it makes sense. If not, do like everyone else does and streamline them. If FHA goes away, we’re going to be in a lot worse shape as a country. Not just an industry.

How to prepare yourself:

Plan – set yourself some goals.

Set them with dates and actually hold yourself accountable to attaining them. The number one reason mortgage professionals fail in the business is because they stop growing when the business is booming. The big mortgage shops grow and decline with the market but their trends are always up. This is due to riding market conditions while continuing to grow despite them.

Research – Find other products to offer.

Most loan officers CAN sell a whole bunch of loan types but only DO sell FHA or HARP or  some niche that they’ve been selling for years. Well it’s time to diversify. There are plenty of loan products out there and the people that are closing more loans than you every month are offering more loan products too. Find out what your competitors are doing to beat you every month and start doing that. Then find out what they are missing and do that too! Business is often referred to as war for this reason.

Market yourself and your business.

Call a marketing company to find out whats working. Marketing firms are the most under used and fantastic way to stay on top of market conditions. They always tell you whats working.  And they know the whole country not just your state. Lean on them, that’s what you pay them for.  Spend some time and money getting your name out there. If your not picking up 5-10 new leads per week your missing the boat. A lot of companies are supplying their loan originators with hundreds of leads per month. If you can close these leads at 10-15% your in for a real good month.

Here’s a few key reason’s successful mortgage professionals don’t make it.

What no to do

a. Stop marketing

i. Don’t think you can’t market yourself because your too small or too large for that. It’s basic math. You close at 10% with 100 leads per month. That’s 10 closed deals per month!

b. Stop preparing for growth

i. RIGHT NOW thousands of people are thinking about turning down their marketing spend because the business is booming. “I can’t handle any more” they say. You’ve probably said it before to someone else as you chuckle thinking of what a great month your having. What about next month? What if rates go back up? What if HARP goes away? Plan for the worst and hope for the best.

c. Stop hiring

i. Hiring is a big part of growth in any industry. You don’t want to be processing your own files do you? Do you want to be answering the phones too? Hire people to do this for you and get back to what you do best. Help people get into the right loan product for their situation.

d. Stop growing

In business there is growth and there is decline. No in-between.

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