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Marketing Secrets That Will
Make You Money

By Reed Hoisington

There are two types of advertising. One will make you rich. One will waste your money.

Institutional, or image advertising is a waste of money. Fortunately for you, most of your competition doesn't know this, so it continues to produce this drivel. Most advertisers, regardless of the industry they are in, run institutional advertising. This includes most carpet cleaners. It is easy to recognize: It never offers compelling reasons for a person to favor the advertiser with his or her business. Its claims (if present at all) are pathetic: "We're nice, and should you ever need your carpet cleaned, please call us. We'd sure appreciate it." Compelling, huh?

Let your competition waste its money on institutional advertising, and instead spend yours on advertising that creates calls from people who can't wait to hire you to clean their homes or offices. This type of advertising is called direct response.

Direct Response Advertising

Any advertising, in any media, can be direct response. The difference between direct response and institutional is that direct response is designed to produce an immediate response: an action, a visit, a call, a purchasing decision. At best, institutional advertising produces results some time in the future (which may not arrive in time to be of benefit to you, given today's hypercompetitive market). Direct response, however, concentrates on results now.

Direct response tells a story. It is precise and compelling. It focuses on your customer (what's in it for him or her). And because it always makes a specific offer, it is accountable. You will soon know if it worked and how well it worked.

If you still don't understand what I am saying, hang this on the wall in your office:

A direct response ad contains all of the following:

1. A headline

2. A created interest in the service or product

3. A created desire in the prospect

4. A specific offer

5. A deadline or cut-off date

Knowing the difference between institutional and direct response advertising is a key weapon.

Lifetime Value of a Customer (LVC)

The name gives the concept away, and it is so simple that we remain dumbfounded that so many people in business never consider it.

By definition, the LVC is the total profit produced by an average customer over his or her lifetime association with you. Once you know your average customer's life-time value, you are then in a position to judge how much you can afford to spend to convert a prospect into a customer.

For example, let's say that the first time your average new customer does business with you, he or she spends $3,000. He or she uses you every 36 months and is going to be your customer for twelve years. In twelve years, he or she will spend a minimum of $12,000 with you, of which $X is profit to you. Would you be willing to spend $10 to make $X? How about $30 to make $X, perhaps $50, or $607 Probably.

But that's not all. Each of your customers directly influences at least seven people. Let's say that two of them become customers on your new customer' s recommendation. That alone increases your customer's lifetime value by a factor of three. And so it goes.

Chances are your competition has never even bothered to think in terms of what customers are really worth. What ideas does this concept give you regarding what you can afford to do to keep your customers loving you and increasing their frequency of purchase? The possibilities are mind-boggling.

Unique Selling Proposition (USP)

USP is what makes you stand apart, the advantage that distinguishes you from every other mortgage professional in town. Ideally, you and your staff should be able to clearly state your USP in 30 seconds or less.

Your USP can be anything as long as it is specific and as long as it is meaningful to your customer. One mortgage professional whom we know is a specialist with jumbo, self-employed, no income, type mortgage seekers and his marketing targets those people who are in need of this type of mortgage product. He is very successful.

How do you go about determining your USP? Here is one way to begin developing one. Think of the five biggest gripes you have heard customers or friends complain about in your industry. Chances are these gripes might include things such as "they didn't do what they said they would do when they said they would do it," "they said that our mortgage would close on a specific date and it didn’t," "they said we would be able to have the money to pay off our bills that were due for that month and we had to pay them with dollars that we didn’t have at the time" and ... well, you get the idea. Then reinvent your mortgage operation to address and correct the most critical complaints you come up with. Your USP will help ensure your success when you include it in your overall marketing program. Target Audience

Target Audience

As a mortgage marketer, you need to be concerned about three groups of people:

1) Clients - people who have done business with you before and, hopefully, will continue to do so. These people are to be nurtured; you can never do enough for them;

2) Prospects - people who should become customers, if you do what needs to be done. These people are to be courted heavily;

and

3) Others - people who may become customers but who can't be efficiently reached or easily identified. You are not going to spend a lot of time or money on them.

A good marketer spends the majority of time focusing on increasing the frequency of purchase in group one and converting group two into customers.

Testing, Testing, Testing

Most advertisers have some idea of whether their advertising is working, but few know precisely or how well. Either they don't keep records, they are using institutional stuff that is not accountable, or they don't care. Whatever the reason, not knowing how your advertising is working is just plain dumb.

Not testing is also dumb. The effort is costing you the same whether or not it works, and it is costing you the same whether it generates ten new customers or 100. You will never know what works best unless you test. Test offers, test headlines on letters and display ads, test media, test, test, test. But test only one change at a time, and until something new beats your benchmark, continue to use the old tried-and-true message and medium for most of your advertising.

Reed Hoisington specializes in teaching mortgage clients how to get new customers.

**If you enjoyed what you read here, please note this is just the tip of the iceberg. Magnetic Mortgage Marketing Members receive constant training on top marketing techniques that give their business's the competitive edge they need to beat the competition. Become a Magnetic Mortgage Marketing Member today and start benefiting from the wealth of knowledge available to you.