When speaking to originators and their managers, I hear frequent complaints about how tough origination is now. Many executives lament that their usual marketing efforts aren’t working as they once did. Unfortunately, many are still using a “spray and pray” approach to marketing. This strategy involves distributing mass marketing pieces and hoping that the message will reach the right prospect. The premise is that the more marketing messages you send, there will always be a certain number of prospects who will respond. Whether it is an email blast or postcard mailing, these marketing efforts just don’t have the impact that they once did for a number of important reasons. Spray and pray is dead.
One of the main problems with “spray and pray” marketing is that it often features generic information that is not relevant to prospects which makes it easy to discard. Statistics bear this out. According to Constant Contact, the response rate for emails is only 6.53% and drops to 4.9% for direct mail. Both numbers are disappointing to say the least.
The popularity of on demand TV vs. regularly scheduled programming underscores the shift in consumer response to general advertising. Many prospects aren’t interested in receiving marketing content that is not tailored for their individual needs. They want to be in control of how and when they are contacted. This is not unique to the financial industry.
In the retail landscape, all sales professionals must convey WIIFM (What’s In It For Me) every time they reach out to prospects. Whether it is Realtors, car dealers or lenders, the supply chain is larger than the demand. It is no surprise that the winning strategy is one where lenders and originators must take market share from their competitors. The size of the market doesn’t guarantee success anymore. Winners and losers are determined faster than ever.
Just think about this: An estimated 290 billion emails are sent every day. There is no way that any individual can handle all the information that salespeople are sending to them. Is it any wonder that response rates are poor and sales professionals are frustrated when consumers ignore their marketing messages?
Today, consumers are living in a real time, on demand world. If a person wants a new bookcase or even a car, it is just a few clicks away. There is an endless supply of products and services and all vendors have to face the reality that the consumer has the power, not the seller. The truth is that consumers want personalized solutions to their problems on their terms and not determined by how the seller wants to sell to them. Consumers disregard everything else as “white noise” if it isn’t targeted to their current wants and needs.
What should producers and their companies do to navigate this new terrain?
Originators must recognize that building trust and credibility is a top priority. It is an originator’s responsibility to communicate to their marketplace why they should be trusted and why buying a house and financing is important to the consumer. This means reaching out on a consistent basis to tell their story and how housing fits into an individual’s financial wealth profile.
While lenders promote themselves through branding and advertising, originators must establish why prospects should do business with them at the consumer level. As mentioned in previous blogs, an originator who knows the product menu isn’t enough anymore; companies need them to generate new business. If the marketplace doesn’t know that the originator exists and what differentiates them from the hundreds of other originators in their territory, the sales professional will never get a real shot at being the consumer’s first contact.
Building an effective personal brand starts with understanding that it is a time investment more than anything else. It is centered on sharing information that is relevant to an originator’s targeted customers. It requires consistently delivering valuable insights on the housing and financial industries. It is about having a long-term view that positions the originator as a trusted advisor as opposed to a short-term view that is focused on a transactional relationship.
Our selling world is changing dramatically. Consumers have short attention spans, unlimited options and the ability to filter out unwanted marketing. It is time to stop “spray and pray” marketing efforts that are not a match with today’s consumer preferences.