By Pat Sherlock, Founder QFS Sales Solutions

When speaking to originators and their managers, I hear frequent complaints about how tough origination is now. Many executives lament that their usual marketing efforts aren’t working as they once did. Unfortunately, many are still using a “spray and pray” approach to marketing. This strategy involves distributing mass marketing pieces and hoping that the message will reach the right prospect. The premise is that the more marketing messages you send, there will always be a certain number of prospects who will respond. Whether it is an email blast or postcard mailing, these marketing efforts just don’t have the impact that they once did for a number of important reasons. Spray and pray is dead.

[caption id="attachment_9789" align="alignright" width="300"] Pat Sherlock[/caption]

One of the main problems with “spray and pray” marketing is that it often features generic information that is not relevant to prospects which makes it easy to discard. Statistics bear this out. According to Constant Contact, the response rate for emails is only 6.53% and drops to 4.9% for direct mail. Both numbers are disappointing to say the least.

The popularity of on demand TV vs. regularly scheduled programming underscores the shift in consumer response to general advertising. Many prospects aren’t interested in receiving marketing content that is not tailored for their individual needs. They want to be in control of how and when they are contacted. This is not unique to the financial industry.

In the retail landscape, all sales professionals must convey WIIFM (What’s In It For Me) every time they reach out to prospects. Whether it is Realtors, car dealers or lenders, the supply chain is larger than the demand.  It is no surprise that the winning strategy is one where lenders and originators must take market share from their competitors. The size of the market doesn’t guarantee success anymore. Winners and losers are determined faster than ever.

Just think about this: An estimated 290 billion emails are sent every day. There is no way that any individual can handle all the information that salespeople are sending to them. Is it any wonder that response rates are poor and sales professionals are frustrated when consumers ignore their marketing messages?

Today, consumers are living in a real time, on demand world. If a person wants a new bookcase or even a car, it is just a few clicks away. There is an endless supply of products and services and all vendors have to face the reality that the consumer has the power, not the seller. The truth is that consumers want personalized solutions to their problems on their terms and not determined by how the seller wants to sell to them. Consumers disregard everything else as “white noise” if it isn’t targeted to their current wants and needs.

What should producers and their companies do to navigate this new terrain?

Originators must recognize that building trust and credibility is a top priority. It is an originator’s responsibility to communicate to their marketplace why they should be trusted and why buying a house and financing is important to the consumer. This means reaching out on a consistent basis to tell their story and how housing fits into an individual’s financial wealth profile.

While lenders promote themselves through branding and advertising, originators must establish why prospects should do business with them at the consumer level. As mentioned in previous blogs, an originator who knows the product menu isn’t enough anymore; companies need them to generate new business. If the marketplace doesn’t know that the originator exists and what differentiates them from the hundreds of other originators in their territory, the sales professional will never get a real shot at being the consumer’s first contact.

Building an effective personal brand starts with understanding that it is a time investment more than anything else. It is centered on sharing information that is relevant to an originator’s targeted customers. It requires consistently delivering valuable insights on the housing and financial industries. It is about having a long-term view that positions the originator as a trusted advisor as opposed to a short-term view that is focused on a transactional relationship.

Our selling world is changing dramatically. Consumers have short attention spans, unlimited options and the ability to filter out unwanted marketing. It is time to stop “spray and pray” marketing efforts that are not a match with today’s consumer preferences.

The Fannie Mae Economic and Strategic Research (ESR) Group downgraded its projections for full-year 2019 and 2020 U.S. economic growth to 2.1 percent and 1.5 percent, respectively, due to expected weakness in business fixed investment and softening global economic conditions. The ESR Group had previously forecast growth of 2.3 percent in 2019 and 1.8 percent in 2020. The ESR Group now projects that the Federal Reserve will cut the federal funds rate by 25 basis points at the September meeting of its Federal Open Market Committee to fend off greater deceleration in domestic growth. The ratcheting up of international trade tensions, including tariffs applied by the U.S. and China as well as the threat to impose tariffs on Mexico, could lead to higher prices and a possible reduction in consumer and business confidence, potentially effecting a further pull back in consumer spending and business fixed investment. This same uncertainty could also impact the previously invulnerable job market, which reported only 75,000 new nonfarm payroll jobs in May and downward revisions to its March and April numbers.

The ESR Group continues to expect housing to provide an economic cushion via a lower and stabilizing mortgage rate environment and a modest rise in the inventory of homes available for sale. Some of March's increase in pending sales is likely to be reflected in May's final existing home sales data, and second quarter existing home sales are still expected to grow 2.2 percent from the first quarter on a seasonally-adjusted basis before growth decelerates through the rest of 2019. Supporting affordability, home price appreciation remains near its slowest pace in seven years.

"This month, escalating trade tensions and concerns about weakening global growth led us to revise lower our full-year 2019 and 2020 forecasts of real GDP growth to 2.1 percent and 1.5 percent, respectively," said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. "Despite a strong start to the year, we expect growth to slow beginning in the second quarter as macro-level uncertainty disincentivizes business fixed investment and starts to weigh on consumer spending. In order to sustain the longest expansion in more than 70 years, we expect the Fed to once again begin easing monetary policy and to cut its interest rate target by 25 basis points in September."

"We expect housing to add to growth for the foreseeable future, and our projection of a 1.0 percent year-over-year increase in home sales in 2019 remains unchanged," Duncan continued. "Moderating home price appreciation and attractive mortgage rates continue to support affordability, particularly as home builders are now paying more attention to the entry-level portion of the housing market."

Homebot, a customer engagement platform that delivers financial scenarios to help homeowners build wealth, today announced major enhancements to the homebuying side of its platform. The latest release inserts lenders into the market search process by integrating prompts for buyers to obtain a prequal or preapproval, lock a rate, and inquire about down payment with a single click. And, to instill a sense of urgency, future buyers can see how their buying power has changed over time as well as which markets best match their lifestyle, price point, and buying timeline.

"The market explorer includes several natural conversation starters and instant LO contact to propel buyers toward next steps. Coupled with the enhanced personalization and lifestyle indicators that show the buyer's goals and timeline, LOs can work smart and focus on the buyers that are ready to apply," said Homebot CEO Ernie Graham.

"Homebot has had years of proven success in driving repeat and referral business from our borrowers," said Wes Tool, Retail Branch Manager, Planet Home Lending. "Now, Homebot's buyer tools give our LOs the ability to nurture new relationships earlier in the buying process. This is a powerful tool to help boost the prequal-to-app pull through rate, and to help buyers make smart buying decisions."

Once an LO adds their database of potential clients to Homebot, buyers can search and assess markets with confidence -- using investor-level tools. Homebot reveals in real-time whether an area is a buyer's or seller's market, sets expectations on buying timeline for each area, and tracks purchasing power based on current mortgage rates.