The current environment is having a profound affect on mortgage loan originations and therefore the industry as a whole. For lenders, profitability margins per closed loan are wearing thin. This fact is motivating CEO’s to look for places to reduce cost, including marketing costs per lead and ultimately cost per closed transaction. So, either the marketing budget needs to be cut back, or it needs to do a better job of driving more leads.
If you were to conduct a Google search on how to reduce your cost-per-lead, nearly every article or blog post you’ll read talks about social media deployment, email marketing, mailings, content marketing, billboards, PPC campaigns, purchasing the right day parts, purchasing the right list and many more items on a typical marketer “to do” list.
Tactics like these if well-coordinated can boost performance but fail to have a cumulative effect IF there are cracks in the underlying foundation…your brand. When your brand is weak, this is reflected in the overall quality and consistency of your communications and their ability to set you apart in the eyes of your target audiences.
Consistent, high quality marketing communications activities in lockstep with a solid brand build upon each other and make an indelible impression over time. This impression is what creates brand understanding and brand loyalty.
The cumulative effect is why great brands experience a higher ROI on their marketing and public relations efforts than others.
For example, if you’re a mortgage company, how do you treat real estate agents? What can they count on from you, no matter what, consistently, that makes them feel good about sending you referrals? If your company brand claims to place emphasis on catering to their needs and you’ve successfully fulfilled this claim but then lose focus during a refinance wave, then your brand lacks consistency. Their loyalty may be transferred to another brand. Regaining their loyalty takes time and money which drives up your marketing costs.
Therefore, if your marketing cost-per-lead is too high, don’t automatically assume that the problem resides with marketing. Maybe your marketing tactics are just fine. Consider whether the problem could be with your brand instead of your marketing plan.
Here are some ways to determine whether you have a marketing or brand problem:
- If you find you win most of the time based solely on price or interest rate, you have a brand problem.
- If in the eyes of your mortgage loan originators, employees, customers, and prospects there is a lack of clarity in why they should conduct business with you, then you have a brand problem.
- If competitors are successful at chipping away at your market share and you don’t have a strategy to gain it back, you have a brand problem.
- If your sales materials lack cohesiveness or differentiation, you have a brand problem.
- If your creative is dry, you don’t have a good call to action, or lack an impactful, well-rounded strategy for driving new leads and converting them, you have a marketing problem.
If you feel like you have a brand problem after evaluating yourself against these points, here are steps you can take to resolve this:
How do you update your mortgage brand to reduce your long-term marketing costs?
1) Uncover any confusion about your brand in your own company. Conduct an internal brand assessment by surveying managers and employees to learn how they define your brand, feel it stacks up in the competitive environment, and how they feel about you as an employer to start.
If your internal audience reveals inconsistencies and internal cultural issues, that’s surely a problem that needs to be dealt with among the people who should be believing in you as a company and “living” your brand throughout the day. People need to be clear about why they’re coming to work each day if you expect them to really be on your team. They need to know why it’s better to be on your team than that of someone else.
A weak company brand can also lead to higher employee turnover which also impacts your profit margin.
2) Uncover any external confusion about your brand. Similar to the internal assessment in #1, you may consider conducting an external assessment of your brand as well. You should survey your business referral sources, current customers and select potential customers. The external survey will require a different strategy to get the information you need for a proper assessment, so feel free to contact us for assistance.
If you find that there is confusion about what your brand is externally, this means your credibility in the marketplace is lacking.
3) Eliminate any marketplace confusion about your brand once it’s been uncovered. The process for eliminating this confusion begins with taking a deep dive into your purpose as a company. Ask yourself why you started your company, what you stand for, what you stand against, why you think you’ll be successful in the market, who your customer is (and is not) and what you want to become and ultimately mean to your audience in the long run.
If you eliminate market place confusion about your company, sharpening your unique selling points and the essence of why you’re in business…this helps reduce your cost per lead. Messages delivered and fulfilled consistently give you an edge on your competition that you can develop further to set yourself apart from them. These messages have a cumulative effect and therefore help build brand equity and brand understanding.
4) Review all marketing pieces. These pieces should include all digital and printed assets like emails, direct mailers, resentation materials, website, display ads…anything and everything with a message on it all the way down to coffee cups and pens. The goal is to determine consistency in messaging, positioning, look and feel that is grounded in your unique selling points, key messages and the essence of why you exist.
If you’re messaging, positioning, look and feel are inconsistent across different mediums, then each time you make an impression on your audience, it’s a new impression instead of an impression that builds on the last. This makes building brand equity more difficult.
Your color pallets, fonts, messaging, ad layouts, tone, etc. should all match so people recognize what you look like.
Reducing your marketing costs can run much deeper than your marketing tactics. It requires a strong brand foundation. Otherwise, you’re probably spending more money than is necessary on marketing on a per transaction basis.