WEEKEND READING: Effective Marketing of Your Loan Modification Firm

Anyone that has read my column in the past year knows that I see private sector loan modification firms as being a key component to the ultimate solution to our nation’s economic crisis. After months investigating the loan modification industry, it’s become abundantly clear that only the private sector has the potential to solve the enormous problem of home foreclosures. The president’s plan isn’t even designed to solve the problem. And the banks themselves… well, let’s just say that we certainly cannot count on the banks to fix the foreclosure problem and leave it at that.

It’s not going to be easy, by any means. Private sector loan modification companies are up against some major competition these days… and when I say major competition, I’m talking the President of the United States, the Secretary of the Treasury, the Chair of the FDIC, and every major financial institution in the country. That’s the kind of competition that would make you wish you were up against Microsoft.

So, at the very least, the question that should be on every private sector loan modification firm’s mind is how to market to the homeowners in need, both efficiently and effectively.

Since I want private sector loan modification firms to succeed, frankly because I want homeowners to keep their homes if at all possible, it falls to me to do whatever I can to help. Why? Well, because I’ve spent the past twenty years as the CEO of my own marketing communications and market strategy consulting firm. Not only that, but my firm has always been widely recognized as one of the best, and has specialized in professional services, such as financial service firms, insurance companies, accounting and law firms, among others.

Over the years, I’ve handled the strategic market planning and creative development for hundreds of firms, 76 of the Fortune 500… all over the country and internationally. I’ve won 22 Tellys for Cable Television Excellence, dozens of Apex Awards for Communications Excellence, and have worked for such firms as JPMorgan, Merrill Lynch, Nationwide, Warner Bros., Centura Health Systems, AXA, and so many others I couldn’t even list them.

If you want more information on my background in direct marketing, perhaps the best thing to do is Google me, by typing my name in quotes into Google, “Martin Andelman”. There’s plenty there. You can also watch me lecture on the subject of marketing in front of 700 insurance executives in Chicago a couple of years ago. You’ll probably like it. People say I’m funny. I’ve provided a link to the video a little later in this article.

(I’ve also written a couple of books… you can find one of them on Amazon. Click here: http://www.rfpnation.com if you want to learn more. The other book I wrote a few years back: “The Simplified Guide to Nonqualified Deferred Compensation,” but you can probably wait for the movie on that one.)

Okay, enough of that.

As a private sector loan modification firm today, distressed homeowners represent only one of the audiences you should be targeting with your marketing messages. If you really want to see growth beyond your expectations, you need to think beyond addressing potential customers to communicating with key influencers and even the entire communities you serve.

And thanks to Web 2.0 technologies, you can do more… reach more… impact more… more often and with less time, fewer resources and for less money than ever before. It’s actually, and this may come as a surprise, the best possible time to be marketing your firm’s capabilities.

You heard me right. The best possible time… could not be better. Why? Here’s why… and stay with me, because this is important and my best thinking… thinking that I’ve been paid quite a bit for over the years. (I’m really not comfortable “bragging,” but it’s important that you know who’s saying this.)

Timing is Everything…

1. The obvious reason is that there will be millions of homeowners at risk of foreclosure in the years to come… two or three years, easily. Maybe four or five, and beyond. And with the president’s plan not even designed to address those at real risk of foreclosure, it will come down to the option of retaining a private sector firm and going up against the banks directly. And, suffice it to say that your firm competing against the banks should be something like Heaven competing against Hell.

2. Competition can be a plus, especially when marketing professional services. Think about the early to mid-1900s… the go-go days of the personal computer. You needed a new one every year or two because they kept getting better by leaps and bounds. And there were new competitors popping up everywhere. But, competition in product marketing has the tendency to force down prices and soon the more successful companies are either gobbling up their weaker brethren or watching them fall by the wayside.

In professional services, however, this is not the case. Prices have a tendency to stabilize for long periods of time, and the greater the competition, the easier it becomes for the smart marketers to eliminate their competitors. People are already thinking about what you have to offer, so it’s just a matter of nudging them in your firm’s direction. Compare that with trying to get them to think about something in the first place.

3. Today is the perfect time to harness the power of Web 2.0 technologies. Couldn’t be more ideal. These new technologies are now only a few years old, which is old enough to be proven and understood, yet young enough so that your firm can still use them to out gun others who are less knowledgeable and therefore ill equipped.

Just to make sure that the irony isn’t lost on anyone reading this, Web 2.0 technologies are the communications tools and strategies that Barack Obama used so masterfully to become President of the United States. So, it will only be fitting to see loan modification firms use them to overcome the administration’s campaign against them, don’t you think? And, Web 2.0 tools are free… that’s right… free, so even the President of the United States has no monetary advantage over your firm, no matter its size.

Web 2.0, which is a term coined to describe a basket of relatively new communications technologies, works very differently than the World Wide Web we all became familiar with during the late 1990s. For example, with Web 2.0 tools no one has to know your Website’s address to find the content you publish, and that means you don’t have to spend a dime advertising your Web address in order to drive traffic to your site.

Web 2.0 tools include Blogs, Social Nets, Bookmarking, Video Sharing, Podcasts, Wikis, Folksonomies, Newsfeeds and News Publishers. None are difficult to use, in that they don’t require any technical skill or programming experience, and they’re Web based tools so it’s easy to measure their relative contribution.

If you have no idea what I’m talking about… go online and type in “Web 2.0”. There’s a huge amount of very good content on the subject. Then, and this is an invaluable tip… go to You Tube and search for tutorials on which ever techie tool you want to know about. There’s a whole series of short videos that a 7 year old could understand. (Seriously, and not even a particularly sharp seven year old.)

4. Marketing in a down economy is always easier than when things are booming, because in a down economy people slow down… pay attention to things they otherwise wouldn’t when they’re running around in a spending frenzy. If you don’t see that, just think about how you were during the Christmas season in 1998 or 1999, compared to how you see yourself being during this year’s holiday season. I plan to do quite a bit of baking come this Christmas, for example, and I don’t even bake.

The cold harsh reality is that the loan modification field is actually only about to begin… everything up until now was just a preface to the main event. I’ll admit… I was hoping that the president’s plan would have the potential to do more towards solving the foreclosure crisis. But, now that I see that our politicians in Washington are much more concerned with the mid-term elections than most anything else, the future is clear: loan modification firms… it’s your time. It’s rare in our society, but you now have the potential to benefit from a true win, win, win scenario.

You can win… homeowners can win… and our society can win… all at the same time, depending on how good you are, of course.

Of course, none of this means that it will be easy… and those that think it will, won’t make it for long. There’s no such thing as “easy money” in our capitalist marketplace, so if that’s what you’ve been counting on, count again. Many loan modification firms will fail… or stay small… while others are likely to develop practices that go on to become large national players for decades to come. The opportunity is yours to lose. This is not a dress rehearsal. The game has begun.

A Marketing Primer for Loan Modification Firms…

Building an effective and efficient marketing organization is something few professional services firms know much about. They’re used to hanging out a shingle and growing by reputation, word-of-mouth, publishing, speaking, and networking with peers.

When it comes to marketing a firm focused on loan modifications and related services, however, most firms don’t appear to think about these means of communication, favoring the more direct and traditional mediums, such as print, direct mail, radio and television.

The problem with these mediums, in the environment in which loan modification firms operate, is that they can very quickly become saturated with competing messages, and unless produced as part of a carefully conceived strategic branding and positioning strategy, they will increasingly become less and less effective. In other words, if they’re not done right, they’ll cost more and more to produce less and less – a downward spiral, to use a term with which we’ve all become familiar of late.

To avoid this article becoming a book, which it undoubtedly could with me at the keyboard, I think it will be most helpful if I provide the following thoughts that need to be taken into account in any successful strategic marketing plan and initiative. Then, at least one of my columns each month will drill down into a specific component of effective marketing. As I mentioned earlier, I’ve provided marketing consulting services to hundreds of companies on thousands of initiatives over the last twenty-something years, so you might as well benefit from that experience. After all, you can’t save someone’s home, if they don’t ask you to.

It’s important that private sector firms succeed in their marketing efforts, and unfortunately, there’s more than enough business out there for everyone… if you know how to attract it to your firm… without breaking any rules or using deceptive practices. The best advertising campaigns, it’s important to remember… don’t trick anyone into anything. Should loan modification firms want additional information, they can contact me directly via email and I’ll be more than happy to answer specific questions generally within a day or two, unless I’m on a deadline, in which case it might take me up to a week to get back to you.

And just in case you’re thinking that law firms shouldn’t advertise, relax. Advertising isn’t marketing. All organizations market, its just that some do it better than others. Even Harvard University markets itself, and very effectively I might add, but that doesn’t mean you find print ads displaying the headline: “Learn more, come to Harvard… Mention this ad and get your first semester free!” I’ve created marketing strategies and tactics for several law firms with which most attorneys are familiar.

1. Strategic Planning – Most of us have heard all kinds of phrases about the importance of planning. Yet, few firms take the time to create a strategic growth plan for their organizations. I can tell you that strategic planning always pays off. However, I also realize that few are good at it.

If you’re choosing an expert to assist you in strategic planning, ask for two things before you write the check: sample strategic plans they’ve authored in the past… and references. Period. Creating a strategic plan is not inexpensive, and following the wrong plan could not be more costly, so choosing the right partner is mission critical.

Even if you’re not planning on strategic planning with the help of an expert, that’s no reason not to create your firm’s own written plan. There are enough books already written on strategic planning to easily fill a four-bedroom, three bath, split-level, so I won’t go into the details here, just make sure you don’t get caught up in an academic exercise… the plan you create should be an action plan, not one on which you’ll be graded, except in terms of its ultimate effectiveness, it should go without saying.

2. Branding vs. Positioning – If you check online some of the papers I’ve written over the years, or even listen to me speak on YouTube (http://www.youtube.com/watch?v=pi3x8sWiWfg), you’ll see that positioning is a big deal. In fact, branding without the right positioning can be almost worthless.

Positioning can be defined as what we think of when we see a brand. Heinz Ketchup is the brand… “thicker” is the positioning. Volvo is the brand… “safety” is its positioning. American Express is the brand… “Membership having privileges” is its positioning.

Jack Trout and Al Ries first wrote about the concept of positioning in their seminal work, “Positioning… The Battle for the Mind,” back in the early 1970s, and many have built upon that work over the years, but the concept is more important today than ever before. It’s not just about your firm’s brand; it’s about what people think about when they see your brand.

All companies are different when you look below the surface, even though they may offer the same orf similar products and services at similar price points. Positioning is your chance to bring out what makes your firm different… special… better. And done right, it will resonate with your target audience and remain imprinted on their minds for years or even decades to come. Positioning is powerful stuff.

3. Direct Response – Direct response marketing is the discipline of marketing that seeks to illicit a response from the target audience directly to the organization doing the marketing. Direct response is a science and an art, and it’s not something that just anyone can do effectively. It takes practice and knowledge. If you’ve never done it before, or just want to make sure you’re doing it right… it’s worth picking up a book. A professor of mine in graduate school, a man named Bob Stone, was a legend in direct marketing and a member of the Direct Marketing Hall of Fame in New York. His most famous book, Successful Direct Marketing Methods, has been the standard throughout my career in universities across the country.

The most common misconception about direct response is that it has to be “in-your-face” type marketing, but nothing could be further from the truth. Direct response just means that you’re asking for the respondent to respond directly to your firm. Another misconception is that it’s a synonym for “direct mail,” which isn’t true either, although at one time it was certainly truer than it is today. Today, direct mail is costly and often receives very low response percentages. Today, we read our mail over our trash can and we can identify “junk mail” from across the room.

When I began my career as a direct response copywriter in the early 1980s, direct response was where the study of consumer behavior, statistics & probability, and creativity met. It was and is part science, part social science, and part art, and as a training ground, world famous adman, David Ogilvy, believed it to have no peer. Ogilvy was a hero of mine, and I still have four of his favorite phrases on my desk:

“The best ideas come as jokes. Make your thinking as funny as possible.”

“Never stop testing, and your advertising will never stop improving.”

“What really decides consumers to buy or not to buy is the content of your advertising, not its form.”

“If it doesn’t sell, it isn’t creative.”

They’ve served me well for more than two decades now, and I highly recommend that you not only adopt them yourself, but also share them with your marketing team. I went so far as to have them framed, right next to my other favorite saying, “No amount of planning will replace dumb luck,” which admittedly isn’t quite as motivational, but reminds me to be grateful for the solutions that fall into my lap from time to time.

4. Community Based Marketing – I’m pretty sure I originated the concept of Community Based Marketing back in the early 1990s. The idea was simple: Think of your community as the entire USA. In that world, a small community paper could become The New York Times, a popular community venue could become Madison Square Garden, a local celebrity could become a national spokesperson. The point was and is that when you view an individual community as your universe, the choices of mediums that carry your message change.

Earlier in my career, my firm was handling the marketing for one of the two largest HMOs in California. It was the early 1990s and HMOs were competing with each other for market share in the larger, more saturated markets, while looking to expand into outlying regions. Our client was preparing to expand into Bakersfield, a rural, agricultural area in the central part of the state, about three hours northeast of Los Angeles, and our number one competitor was doing the same.

Our competitor had recently signed a national celebrity spokesperson and the strategy had been working. Over the prior year, they had eaten into our market share and were now running neck and neck with our client, whose budget didn’t allow for that kind of star power to drive marketing efforts.

We decided to tackle the expansion differently. Rather than simply rely on the campaigns and media mix that we had proven successful in other parts of Southern California, we studied Bakersfield as a “community” all unto its own. As a result, we found opportunities that we would have almost certainly overlooked had we not shifted our perspective.

We found a local celebrity, Buck Owens, whose claim to fame as a musician had largely come from his years playing his trademark red, white & blue striped guitar with Roy Clark on television’s Hee-Haw, a country and western variety show from the 1970s. Buck had been living in Bakersfield for many years and owned the local radio station. He’d even had a hit song on the radio about a year earlier, “On the Streets of Bakersfield”.

I went up to spend the day with Buck at his radio station, and we talked for hours about what a special place the small city really was; how different it was culturally than the rest of Southern California, and I, of course, told him how wonderful my client was as a provider of medical care, and how we all remembered watching him on Hee-Haw. (Yeah, so… I watched Hee-Haw… you want to make something of it?)

Buck and I got along famously that day. He drove me around and showed me the town, even presented me with a very special gift… a red, white & blue guitar that hangs in the downstairs living room of my home to this day. He agreed to be the spokesperson for my client’s ad campaign, which would rely heavily on radio ads that we’d run on his local station. They cost about $10 a piece, which compared to Los Angeles was essentially free, and I handed him a check for his spokesperson fee… $25,000. He was so thrilled to be involved in helping Bakersfield learn about the new health plan option that it was his idea to throw in use of his hit song as the intro to the spots that he’d read, often live and for much longer than 60 seconds, on the air. (I swooned appropriately.)

The end result was that we cleaned our competition’s clock in Bakersfield and never lost our lead. And, although I don’t know what they paid for Wilford Brimley and their television campaign, I’m sure it was quite a bit more than twenty-five grand. And when our client announced its next expansion into another high-desert community, I used the same local spokesperson strategy, only this time I found Pat Buttram, who I knew as Mr. Haney on television’s Green Acres, but others remembered as Roy Rodgers’ sidekick. His fee was just $2,500, plus he wanted a limo to pick him up and take him home.

I wrote the radio ads in Mr. Haney’s voice, as I remembered it from years of watching the show, which aired between 1965 and 1971, although the reruns are still on to this day, and while we were recording them, he paid me one of the nicest compliments I’ve ever received. He read the ads I had written, looked at me through the glass of the sound booth and said, “You know, you sound just like Mr. Haney”. Up until then, I thought it was he that sounded like Mr. Haney.

Community based marketing can be a very powerful tool in your arsenal, because it forces you to view your markets individually, and that can lead to a level of market intimacy that competitors will never beat with their seemingly big city ways.

5. Key Influencers – Specific to loan modifications and related services, it’s important to think about marketing to targets that, although perhaps not likely to be end users, are definitely “key influencers”. Most commonly, these include CPAs, other attorneys, Realtors, and mortgage brokers, but there are others to consider adding to the list as well.

Community centers, the local fire department, private schools, grandparents, human resource departments… the way the foreclosure crisis is spreading, there’s no limit to people who may value knowing that a quality, trusted loan modification firm is near by and just a phone call away. You may have to rethink your approach, however, because what works with one audience may not with another.

I recently suggested that a firm send something to a local psychologist who specializes in workplace issues, and even introduced them to one I know whose office happened to be a few doors down from my own. He said he was glad to have the information, and last time I saw him, he mentioned that he had referred two of his clients who had expressed frustration dealing with their banks and needed help.

Wrapping Up…

Okay, well I could go on forever, but I’m sure I’ve already gone on too long for some, so I’ll sign off here.

Some people have commented that firms offering loan modification services are “opportunists,” and they say that as if it’s a bad thing. When someone recently said that to me, I responded by saying: “Is that bad. Should companies only offer services when there’s no opportunity to do so? Since when is opportunity a bad thing in this country?”

The word, “opportunist,” implies a one-sided win. What loan modification firms are doing isn’t that. What you’re doing by offering your expertise in negotiating loan modifications is a win-win-win scenario, and one that the entire country should support and even cheer. You’re helping people save their most important asset. You’re helping the country’s economy recover by helping to stabilize a housing market that’s in free fall. And the fact that you can do it at a profit is what makes the other two benefits possible.

Don’t let the political grandstanding and negative press affect you and your personnel. I’ve spoken with literally hundreds of homeowners whose homes were saved by a for-profit loan modification firm and none of them would take their money back if they also had to take back the terms of their old mortgage. In fact, every single person I’ve spoken with had nothing short of glowing things to say about the firm that helped them do the impossible… remain in their home when they couldn’t afford to make their payments.

As I’ve pointed out in other articles, including my cover story in May’s “The Niche Report,” soon the ALT-A mortgages will begin to default and then foreclose, and at that point the crisis won’t be happening to people “over there”. It’ll affect every neighborhood in America.

And perhaps then, the misinformation will have a harder time spreading, because what you represent is the only solution to homeowners and our economic problems that doesn’t require a taxpayer bailout. Remember that. Because with the banks certain to continue their need for untold billions of our hard earned money, solutions that don’t have to rest on the backs of taxpayers are sure to be seen as a whole lot better than those that do.

How do you take your tea, by the way… one lump or two?

Ergo Bibamus!