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.
For more information please visit us at www.tagquest.com/