We are seeing several important trends in terms of reverse mortgage marketing.
First, the number of reverse mortgages being closed across the country continues to increase. This is a combination of 4 factors:
- Increased credibility of reverse mortgages as a viable financial planning tool
- Homeowners need to supplement social security, boost cash flow
- Heightened marketing of reverse mortgage products – more visibility for the product
- Mortgage brokers have run out of refinances – there are millions of potential reverse mortgage customers
Credibility and Visibility
Every time I turn on the TV, I see Joe Namath hawking reverse mortgages. I mean if Broadway Joe doesn’t have credibility, who does? And it’s not just TV ads and infomercials. Earlier this month, the N.Y. Times had a full page article titled “Reverse Mortgages Aren’t Always a Last Resort”.
This article gave a very straightforward review of Reverse Mortgages. It started by explaining the basics of the loans themselves. This included a couple of paragraphs about HECM loans (home equity conversions) and how they are insured by the F.H.A. The article also provided lots of examples. For example, if your house is worth $1 million and you paid about $26,000 in upfront costs (for insurance and closing fees) you would be eligible for roughly $420,000 in credit.
An article like this truly helps sell the entire concept of reverse mortgages. From protecting one’s nest egg, options on putting the dollars to use and different options to consider, homeowners get a great understanding of the value of the reverse mortgage product.
Mortgage Brokers are Competing for Reverse Mortgage Clients
Mortgage brokers are using a variety of marketing channels to market reverse mortgage products. This includes emailing, direct mail, setting up websites to generate leads, social media, seminars, radio and TV.
We are seeing many celebrity endorsements (like Broadway Joe) expounding on the virtues of a reverse mortgage. We are seeing large insurance companies and financial planners jump into the fray.
What you need to do is commit to a marketing channel and test it. You have lots of options to promote the reverse mortgages you are offering. However (and I am emphasizing this), the most important way to begin your reverse mortgage marketing program is to reach out to the right people.
Getting the Right List
There’s an old saying in marketing about throwing spaghetti onto the wall to hope something sticks. Well, that’s a waste of money and spaghetti. Don’t spend any of your precious advertising budget on people who won’t be able to qualify for a HECM loan. It will only frustrate you and them.
Top prospects: Homeowners, age 62+up with equity in the home. There are millions of solid reverse mortgage prospects in the U.S. Don’t bother with younger people. Don’t bother with people who do not own their homes. It’s a waste of your resources.
Email addresses are available for a portion of the list. So are scrubbed phone numbers. But believe me, the only way to reach everyone in your market is via direct mail.
Direct mail the is most trusted medium
Studies continue to show that direct mail is the most trusted marketing medium. It is also the only marketing channel that reaches right into the home. In fact, 68% of consumers said direct mail was the medium they trusted most. And social media, the one they trusted least.
A few reasons
- Direct mail costs money: When consumers receive an item in their mailbox, they know that the company that sent it to them had to spend significant dollars to create, print and mail the piece. This is way different than to email and social media marketing, where costs per address or impression are pennies or fractions of a penny. Because of the cost of ink and paper ,direct mail campaigns are seen by recipients as having a value and inherent credibility.
- Direct mail is personalized: Direct mail marketers have been taking advantage of personalization for decades. With the latest in variable digital printing today, direct mail is capable of significant innovation in personalization techniques.
- Direct mail is not intrusive: it is estimated that consumers are bombarded with several thousand marketing messages each day. TV, radio, email and social media advertising are intrusive. They interrupt the consumer and can stop them from doing what they set out to do. With direct mail, consumers go to the mail box when they are ready. They can sort through each item to see who it is from. It’s their choice to toss an item, look at it immediately or set aside for later review.
Letter versus postcard.
The purpose of Reverse Mortgage marketing direct mail is to create excitement and generate awareness of your product. You need a solid offer to incite your recipient to take action. In the mortgage industry, a top offer is “no closing costs”. You want people to see that immediately. It’s a great offer.
Right now, postcards are “hot” in reverse mortgage marketing. I like to say that postcard marketing gives you a 100% open rate.
Postcard marketing costs vary depending on the size of the card you are mailing, the quality of the paper, and the number of prospects in your campaign. Here’s a rough estimate, based on myDMpostcards. Figure between printing, fulfillment and postage, your cost for a 4X6 postcard is between 55 – 73 cents each. That includes being able to create and customize your artwork, using very professional formats. You can customize your own very professional reverse mortgage marketing card on this website.
A note about quantity
Most mortgage brokers work in a specific market. Make sure you work with a top list provider. They will be able to give you a count for the best prospects. You are better off to mail to a smaller group of top prospects more frequently than a larger group of “eh” prospects just once.
Ask your list provider to furnish emails where they are available. This will allow you to send an email to your prospects at the same time you do your mailing. Just for a little extra branding and visibility.
Make sure you are one of the good guys. Reverse mortgages got a bad rap in the 2000s from some bad players in the industry. Good advertising also means clarity and honesty. People want to do business with people and companies they trust.