Are you losing business that you don't even know about? Or maybe you know you are losing business - but don't know the extent of the loss.
As you are reading this article, there is a hurricane of activity around the one-stop shopping concept for homebuyers and sellers.
That's why it's more critical than ever that you look at your business in a whole other light and consider jumping on the "consumer-direct" marketing bandwagon.
Why?
Actually, the "winds" of change and the concept of "one-stop shopping" started in the 1990's with a study by Dr. Weston Edwards & Associates (a private consulting firm studying the housing, finance and insurance industries) when he published "Changes in the Way Homes Are and Will Be Bought and Sold".
They have just released the 2004 study, which updates the last survey (published in 1999). Here are some highlights:
- 70-80% of leading real estate companies will provide one-stop-shopping services including title insurance, closing services, mortgages and homeowner's insurance within the next 5 years.
- Real estate companies, who have on-site loan officers, will capture 30-35% of buy-side transactions within the next 5 years. (Currently 20-25%)
- Home builders who own mortgage companies have a capture ratio of 80%.
- Real estate companies and homebuilders are adding more minority and immigrant sales consultants and loan officers than banks and mortgage banking companies (hoping to capture 1 out of 2 minority homebuyers).
- Because of the one-stop shopping concept, settlement services are expected to be cheaper than going directly to a traditional mortgage company for a mortgage.
- There will be new meaning to "customer for life" because real estate agents will control the entire transaction.
If that were not enough,
- RESPRO (Real Estate Service Providers Council, Inc.) www.respro.org, was created in 1992 and is making huge inroads with real estate companies and homebuilders providing resources to form joint ventures, strategic partnerships and subsidiaries.
- Bank of America has recently created a multiple listing service for real estate companies.
- Some of the top 10 lenders like Wells Fargo and Countrywide have partnered with some of the largest real estate companies and homebuilders in the USA to provide mortgage services thru joint ventures.
- Even Warren Buffett, www.HomeServices.com, has created a one-stop-shopping entity with some of the largest real estate companies in the country.
What does that mean to you?
It means that loan officers; privately owned mortgage banks and broker companies are going to get a smaller piece of the pie. They need to spend their time and their marketing dollars on trying to attract the consumer to call them FIRST - even before anyone has a whiff that they are looking to buy, sell or refinance a home.
Consumer-direct marketing is not new - it's been around for almost 30 years. It started with Jay Abraham and the concept called "free report marketing". It's a time-tested, proven, emotional marketing strategy.
In a nutshell, here's how it works:
- Highly targeted ads, with unique headlines that will attract the prospects you want to do business with (i.e. second-time homebuyers; sub-prime; investors, etc.)
- Prospects read the headlines, call you for the free report
- Before sending out the free report, you "qualify" the leads
- Send out the free report
- Follow up calls asking for the appointment
- If no appointment, a series of follow up calls, letters, postcards until they decide to do business with you.
I know of thousands of loan officers who have said "this type of marketing is not going to work", or "it's simply not the type of marketing that I want to do".
I personally used free report marketing in my mortgage business for almost 10 years )in both the good years and the bad) and here are my statistics (in a city of about 100,000 people).
I received 30 calls per week.
- Out of the 30 calls, 20 of them were "qualified" leads
- Out of the 20 leads, 8-10 would be seriously considering buying a home within the next 3-6 months.
- Out of the 8-10 leads, 1 or 2 would apply for a mortgage right away.
- Out of the 6-8 leads, 1 or 2 would apply for a mortgage in 3 months.
- Out of 5-7 leads left, 1 or 2 would apply for a mortgage in 6 months.
- After 6 months, you pretty much have lost them.
There are two important strategies that will insure your success - and it's especially true with free-report marketing.
- One: The use of scripts to qualify prospects up front. Do not make the mistake of thinking that everyone who calls for your free report is going to be your client.
- Two: Once you have "qualified them", that you consistently follow up with offers of free credit reports, interest rate/program updates, local real estate trends, etc.
My database of future homebuyers averaged 800 leads that I knew were in some process of the home buying stage.
Best of all, it's less expensive than purchasing leads. Advertise in real estate magazines; the yellow pages; your website; email marketing; farm areas with the use of flyers; postcards and even your business cards. There are so many ways to generate leads - it's mind-boggling!
In other words, consumer-direct marketing is the art and science of getting the prospect to call you FIRST - so you can control the lead and the referrals to YOUR preferred RealtorsTM, title companies and insurance agents.
I encourage you to look into it - again!
Karen Deis, Publisher
P.S. Our next online seminar called, "How to Build a Lead Generation Machine with Free Report Marketing," will be held on October 13, or you can purchase the CD replay if you can't attend that day.
Copyright, 2004, LoanOfficerMagazine.com
