HSBC subsidiary First Direct has withdrawn the offer of mortgages to non-customers, further fuelling the crisis in the lending industry. Recently the bank has been receiving a deluge of applications and simply does not have the staff and resources to efficiently process the information.

Chris Pilling, First Direct’s chief executive, said: ‘We’ve seen unprecedented demand for our mortgages since January thanks to our highly competitive pricing and the decision of other lenders to raise rates. As a result, we are currently seeing applications running at five times our normal volumes. Rather than increase interest rates dramatically to discourage new applications, we’ve decided to withdraw temporarily from offering mortgages to non-customers until we clear the backlog.’

First Direct is the first major home loan provider to take this step and there are fears that many others will now follow this precedent. Whilst the bank is not in the same state of financial meltdown as Northern Rock – it is still offering mortgages to existing customers – First Direct have grossly underestimated the amount of business their attractive fixed rate deals would bring in.

Their decision to shut up shop to new lenders will put a further strain on the industry as a whole. Building societies Bath and Earl Shilton recently withdrew mortgage offers to non-customers and Nationwide have put up rates to try and discourage new borrowers.

Meanwhile a study carried out by the MoneyFacts website revealed that 90 mortgage products per day have been withdrawn in the past week, leading to an eight percent decrease in the available offers to borrowers. This constitutes a huge setback for the mortgage industry, which has left experienced commentators stunned. Rob Clifford, the chief executive of the brokers Mortgage Force, said: ‘This is unprecedented. We’ve never seen this number of lenders pulling a whole tranche of deals or completely closing for new business. And I think we’ll see more lenders do the same.’

Even affluent young professionals will be hit by these worrying developments with the announcements from Scottish Widows and Standard Life that they have amended their 100% mortgage deals, which required no deposit. The deals, available to barristers, doctors, accountants and other highly paid professionals, were very popular as they provided flexibility due to individual assessment and the ability to borrow a greater amount than a yearly salary on the understanding that that salary would increase.

The deals now require a five percent deposit, whilst other 100% loans from the likes of Abbey are having their interest rates hiked up to reflect the growing climate of the industry. A spokeswoman for Scottish Widows said: ‘We are looking at the whole of the market place and we not saying that we don’t trust our customers. That is not why we have made the change.’ But Melanie Bien, of mortgage brokers Savills Private Finance, commented: ‘Even professionals can’t be trusted with 100 per cent LTV any more.’

By: Mark Skinner

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So you have been writing mortgages like crazy now for the last few years. You have a pretty big database of customers and hopefully you have been getting and keeping full contact information for them. An organized database is the first key to customer retention.

The next step is to put together a direct mail campaign to keep these customers thinking about you when they think about mortgages. It is often years between times when each customer needs a mortgage professional, and it takes far less than that for them to forget your name. As well as fighting time, you are fighting indifference. Customers who get great service are often reluctant to pass that information along, while customers who feel they have gotten poor service will tell everyone. Most of the time good customers need to be reminded of their experience. By following up with each customer on a regular basis you will not only stay in the front of their mind but you will also start to build a reputation as a solid and responsible business.

So how do you get started? Below are a couple of the most frequently asked questions when starting a campaign to keep in touch with past clients.

What Type of Direct Mail Piece Works Best?

There is a great debate amongst Mortgage Professionals about what type of direct mail will work best for getting new business. Many swear by letters for their appearance of professionalism, while others like the low cost and high visibility of postcards. Overall, both seem to work adequately for bringing in new business. You just need to find which works best for you personally.

For keeping in contact with past customers, however, the way to go is postcards. This is due to the fact that if your customers are not currently looking for a mortgage for themselves, they are far less likely to take the time to open a letter. That causes most of your “keep in touch” promo that is in envelopes to get thrown out before it ever gets read.

Since the goal is recognition and not direct action you only need to get them to read the message. Postcards have the message visible when mailed, which means that while your customers are deciding what to read and what to throw out, they are already being exposed to your message.

How Often Should I Send Promo?

You will want to mail a piece to your database every 30-60 days. Any longer than that and they may have already forgotten you when their friends are looking for a mortgage. Since you will want to send promo out often, you will need to keep your costs down. With postcards there are no envelope costs, no assembly costs and the postage is 30% less than letters. When using a mail house to send your postcards you can often get postage rates as low as 18¢ per piece.

What Should Be On My Brand Recognition Pieces?

There are some basic rules for the design of a brand recognition direct mail piece.

Rule #1: Keep color consistent.

Many times people fall into the trap of changing the look of their promo for the seasons or for the holidays. The thought is that people are thinking about Christmas or St. Patrick’s Day so they will respond better to promo with those colors. The truth is exactly opposite. Their senses are so flooded by those images that they actually start to skip right over them. Pick a color for your company and stick with it. You will do much better in building recognition.

Rule #2: Make a logo and use it on every piece.

Having a clean, professional logo is best. It may be a little pricey to have designed but in the end it is well worth the money. Experienced designers can often charge up to $2000 for a corporate identity package including logo, letterhead and business cards. If you aren’t looking to make that type of investment simply pick a type style for your company name and use it every time. Consistency is key because your logo is your main identification point.

Rule #3: Make it Informative.

Every piece should have something useful for your customers. Whether it is new information about the mortgage industry or even possible investment properties in their area, it can even be completely unrelated to the mortgage industry. A calendar or list of emergency numbers, even the old recipe card trick still works pretty well. Anything that is likely to be kept around will help to build recognition in the minds of your past customers.

The mortgage industry has experienced a huge amount of growth over the past few years. Unfortunately this growth cannot last forever. At some point it is going slow down and the only way to keep your income in the range that you have become accustomed to is to ensure that you retain as many past customers as you possibly can.

A direct mail campaign is the best way to do this, but remember, this type of program is a long term process. Don’t get discouraged if you can’t directly calculate the amount of money that you bring in right off the bat. What you are doing is burning your name into the minds of your customers. Eventually it will work out to you seeing less attrition and far more referrals.

By: Joe Niewierski

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Direct mail has been proven an effective marketing technique that generates new business. The same is true for promotional products. A number of research studies have shown that giving away promotional items augments a company’s clientele base significantly. As both are important strategies in the marketing of a business, many are now combining these two approaches for an even more successful outcome. Promotional products, when paired with a piece of direct mail, can greatly increase direct mail response rates. Experts say that sending a promotional product along with a piece of direct mail can increase the response rate by as much as 50 percent.

One real life case study involves a local mortgage company in a particular city. In the past, this certain company had utilized the methods of direct mail only. However, after learning about the maximum benefits associated with combining direct mail strategies with promotional products, a change was to be made. This certain mortgage company worked with a promotional consultant to create the ideal scenario and include both strategies in the same campaign. In addition, this business was already effectively incorporating the use of a mailing list, which the firm’s in-house marketing director had created. The results of the previous attempts of direct mail submissions were to be compared with the new approach of giving away promotional items along with the sales letters.

Each recipient on the mailing list received a personalized letter advertising a certain interest rate and explaining the details and legal restrictions that were involved. The material was time-sensitive and the packaging indicated so. The letter welcomed potential clients to make plans to purchase their first home, to refinance their existing home, or to upgrade into that house that they had been dreaming of. In addition to the sales letter the local mortgage company had composed, members of the marketing team also enclosed a small, easily mailable promotional item that fit easily into the package and didn’t add extreme costs to the postal fees. Small pads of paper in the shape of a house were an added bonus. Imprinted on the pads of paper was the complete contact information for the mortgage company including the names of the owners, web site URL, phone number, address, and hours of operation. Potential clients received the invitation to respond to the special offer via the direct mail piece, as well as a free gift item- one that was extremely simple, but one that could also be useful for taking notes during their mortgage process. The results were better than expected. This mortgage company noted a forty percent increase in the response rate of their efforts using both the direct mail sales letter in conjunction with the free promotional item.

Remember these helpful suggestions when organizing your next direct mail campaign.

- Give your prospective clients a reason to respond. Involve a brand new incentive, or a special discount. Tell them about a new program.

- Choose a promotional item to send that mails easily. Gift cards are an excellent example. Offer potential customers a few free ring tones for their cellular phones. Giveway a free Itunes song. Other mailable promotional products include magnets, bookmarks, wide shaped pens, letter openers, mouse pads, and pads of paper.

- Remember also the demographics involved with those you desire to reach. If you are targeting first time homeowners, connect your promotional products to this group’s age group, values, beliefs, and economic status. Also consider relating your promotional items to a certain theme. If you are promising to save your potential clients money on their down payments, choose an item that will express this. For instance, you could imprint a money clip with your business’ logo and contact information.

- Have a time-sensitive offer. Give your recipients a deadline by which to respond.

Many businesses have used direct mail strategies because of the powerful marketing technique that it is. It can reach new clients and generate new business. Similarly, other companies give away promotional products for their advertising. Experts have shown statistics indicating that both of these marketing strategies are very effective in increasing customers and sales in a company. Doubling these tactics can take your business to the next level. Have you considered combining these two approaches for an even more successful outcome? Contact one of our helpful promotional consultants today to imprint the product of your choice.

Pairing promotional products with direct mail sales letters increases customer response rates. Experts say that sending a promotional product along with a piece of direct mail can increase the response rate by as much as 50 percent.

By: Rick Sheldon

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