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Why (I think) Direct Mail Marketing Isn't Working Anymore!
Why some consumers think mortgage lenders are the scum of the Earth.
Maybe it's a coincidence, but within the last few weeks, I received at least a half dozen phone calls from mortgage companies telling me that their direct-mail marketing efforts just aren't working anymore and wanted to know if I could give them some insight as to "why".
Now, I consider myself a "student" of anything sales and marketing related. In fact, I'm one of those people who actually READS all of my junk mail. After all, companies are paying these guys big bucks to create mailing pieces and generate leads - so why not learn from some of the tricks of the trade from some of the best of them.
But then, there is this letter...which, made me realize just WHY direct-mail marketing just isn't working anymore. Some of those letters are down right misleading. After I was through being incensed by the gall of a mortgage company sending me a letter like this, I realized that consumers feel the same way and refuse to be sucked in, and are ignoring a majority of solicitations from mortgage lenders.
Here is the letter in its entirety (personal information has been changed for security reasons). But first, let's talk about the envelope. The return address showed this:
Consumer Information Division
Saint Joseph County
Indiana
Second Request
Looked pretty "official" to me. Got me to open it, right? Now for the letter.
Excerpt from the letter...
Dear Joe Smith,
Your current home equity line of credit or second mortgage $40,000 of your property located to 123 Main Street may be at risk of prime rate increases that could be devastating to your bottom line.
Our Consumer Information Division is in the process of providing pre-selected homeowners in Saint Joseph County the opportunity to participate in a new program that will pay off your current second mortgage and any revolving debt, leaving you with a new low monthly payment, a fixed rate for good and a payment that will never go up.
Click thru to see the actual letter in its entirety.
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Not until you get to the end of the letter do you realize that it's a mortgage company solicitation - and not from the county government's office.
How do you avoid your past customers getting letters like this? Have them sign a Credit Bureau Opt-Out form (click thru to read the article, "Keep Mortgage Companies from Contacting Your Past Clients with Credit Bureau Opt-Out Forms" and subscribers can download the form). In fact, when I was in the mortgage business, I asked clients as early as the application, to sign the form. I even faxed it (then sent it in the mail) to the credit bureau so my clients would not be solicited by other mortgage companies - regardless if they closed the loan with me or not.
While these types of "misleading" letters will continue, you can do something about it.
Send your past clients the suggested letter and the credit bureau opt-out form. Have all your prospects sign it at the time of application. Let's put a stop to having consumers think that we, as an industry, are trying to hoodwink them with deceiving letters like these.
Copyright, 2005, LoanOfficerMagazine.com
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