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Scotsman Guide Residential Edition | ScotsmanGuide.com | March 2018 38
oday, savvy mortgage originators are
using data to create relevant, one-to-one
messaging that attracts and acquires potential applicants. Data-driven direct mail
used in an integrated direct marketing campaign that
involves multiple touchpoints — including e-mail and
digital channels — can drive an increase in leads and
Direct mail is not a new channel for mortgage
originators. What is new is how often direct mail is
being used. Over the past three years, mortgage-related direct mail volume increased by 439 percent,
from 62 million pieces in third-quarter 2014 to
334 million pieces in third-quarter 2017.
The mortgage sector (including purchase mortgages, reverse mortgages, home equity lines of
credit and home equity loans) mailed close to 1.1
billion direct mail pieces in the first 11 months of
2017, accounting for 42. 8 percent of all financial-services direct mail volume. According to the Data
and Marketing Association (DMA), financial services
companies are the heaviest users of direct mail. In
fact, in the first 11 months of 2017, financial services accounted for 46. 8 percent of all direct mail
volume in the U.S., according to market research
company Mintel Comperemedia.
Direct mail effectiveness
The reason for this recent increase is simple: Direct
mail continues to be an effective, measurable and
trustworthy marketing tool for acquiring new customers in the mortgage industry.
In fact, direct mail response rates continue to outperform digital channels. As highlighted in the DMA
2017 Response Rate Report, direct mail achieves a
5.1 percent response rate when using a house list.
In comparison, no single digital channel achieves
even a 1 percent response rate — with e-mail at
0.8 percent response, paid search at 0.6 percent,
social channels at 0.4 percent and online display at
When it comes to measuring success, direct marketers continue to embrace multichannel marketing. Some 61 percent of survey respondents in the
DMA report use online tracking to measure their
direct mail response. In addition, 53 percent use
call centers and/or telephones for tracking and 42
percent employ codes and/or coupons for tracking
responses to direct mail messages.
Finally, direct mail is still a trustworthy source of
financial information. In fact, direct mail tops consumers’ preferred means of receiving marketing
communications from financial services companies
because consumers see direct mail as both trustworthy and authoritative, according to a report
by the DMA and online market-research agency
Fastmap. This preference for direct mail extends to
the 18- to 34-year-old demographic as well.
Moving forward in 2018, mortgage originators
should be aware of homebuying trends and how
to incorporate data-driven direct mail into their
marketing efforts. According to the Mintel Targeting First-Time Home Buyers report, Mintel states,
“ 49 percent of millennials who do not own a home
plan to purchase one in the next five years.” Mortgage originators focusing on this target demographic should increase their acquisition-focused
direct mail volume sent to renters.
To increase opportunities with first-time homebuyers, mortgage originators also must be available
to answer questions, guide buyers through the application process, and provide digital tools to manage the mortgage application process. A recent U.S.
Bank direct mail piece offered the assistance of loan
originators to discuss options and walk borrowers
through the mortgage application process. Wells
Fargo offered potential first-time homebuyers a
digital loan-tracking tool to follow the mortgage
The initial financial requirements of mortgage
loan origination also may discourage first-time
homebuyers. In response, some mortgage originators use their direct marketing messaging to offer
low downpayment rates. Quicken Loans recently sent a direct mail piece promoting a 1 percent
downpayment option. Navy Federal Credit Union
sent a direct mail piece to first-time homebuyers
promoting cash back and credit incentives and
eliminating the requirement for private mortgage
insurance on many loans.
Because direct mail can communicate consistent
messages that potential mortgage applicants find
trustworthy and reliable, it’s a great channel for educating future borrowers. Use it to explain recent
tax changes affecting homeownership incentives
and provide options for making homeownership
more attractive, for example.
In addition, with consumers relying heavily on
digital devices, it is important to enhance that consumer trust. Some financial services companies are
creating digital tools and alert services, improving
data protection and providing proactive tips to
keep consumer data secure.