PERSON OF THE WEEK: Jim Blatt is the CEO and co-founder of St. Louis, Mo.-based Mortgage Returns, a provider of database-driven, automated marketing solutions for the mortgage industry.
MortgageOrb interviewed Blatt to learn more about how lenders are measuring their marketing campaigns and boosting effectiveness, including the role of the customer relationship management system in building a successful marketing program.
Q: How should originators measure the impact of their marketing?
Blatt: Loan originators should begin every marketing campaign by determining the key goals and objectives. Here are a couple examples:
Marketing to past customers: The measure of success should be customer retention: how many repeat deals come from past borrowers. Any complete CRM or database management system should have this data readily available. Referrals from past customers should also be tracked and reported.
Marketing to prospects: The measure of success should be conversion rates, with clear reporting showing the impact of marketing pieces on results.
Most originators understand what they are trying to accomplish. However, they do not know how to measure it. They are also using outdated technology that only supports execution. By measuring results, originators can focus on what they are doing well in their marketing efforts and identify areas where they can improve.
Q: What are mortgage originators missing in their marketing campaigns, and what does it cost them?
Blatt: Most originators are focused on execution, not results. Unfortunately, most lenders use traditional mass marketing, and that is simply not effective in developing or maintaining strong relationships.
When originators utilize big data to execute one-to-one marketing, which customizes marketing to the individual recipient, it improves response rates and results. Mass marketing cannot provide the same level of results. Studies show response rates go up tenfold when marketing pieces are customized to individuals. Our studies show that one-to-one marketing triples customer retention, which is critical in a purchase market.
Q: What elements make up a complete CRM system?
Blatt: It all starts with sophisticated and complete database management. The database needs to be transferred in an automated manner, standardized and stored so it is easily available. Simply managing contact information and a few loan details is a very low bar for what a CRM system should and can do.
Next, this data needs to be organized and utilized in marketing material. A complete CRM system offers relevant and targeted marketing by intelligently standardizing and organizing big data in a way that is actionable and allows for one-to-one marketing.
All pieces should be customized and personalized down to the individual's situation at a granular level. Customizing marketing to an individuals' situation demonstrates to a homeowner that the originator is still actively managing their account. The reward? People are three times more likely to repeat purchase business from an originator that is using one-to-one marketing. Mass marketing pieces, like a "Happy Thanksgiving" message, are less effective at accomplishing the marketing goal.
This leads to the next essential element of a complete CRM system – measurement. Originators need to track results and receive an unbiased report of whether their marketing programs are working and how they compare to peers and goals.
Finally, a complete CRM system offers expertise and advice by identifying best practices and closely monitoring the market. The mortgage market is very dynamic. Originators that are purchasing five years of marketing materials at the time of closing are not adapting their communication to changing conditions. This results in poor performance and improper marketing investment.
Q: How can originators thrive in a purchase market?
Blatt: Top originators make sure they are capitalizing on every opportunity to stay fully engaged with their customers, prospects and referral partners. The more they execute one-to-one marketing, the more effective they will be at reaching their marketing objectives of gaining new business and referrals from past customers and increasing prospect conversion through timely and effective marketing.
If originators can demonstrate to real estate partners that they are managing a prospect's loan at a detailed level, the agent is more likely to send them future referrals. It all boils down to the level of engagement and how effective originators are at staying in front of their audience with appropriate messages.
A complete CRM system doesn't cost more or require more work. It simply delivers better results. Hold your marketing accountable – insist on a complete CRM system.