Welcome to TRR’s new column on marketing reverse mortgages! The scope of this column will be predicated on what you, the reader, are specifically looking for in regard to marketing HECMs, as well as topics that I believe will help you grow your pipeline. I encourage you to contact me and let me know what you would like to read about in future issues. Let me know if you’re considering a product or service that you would like me to review before you commit your valuable time and hard-earned money. Nothing irks me more than wasting time and money on something that doesn’t work. In fact, not knowing if a marketing strategy is going to perform well is one of the main reasons why people don’t try something new.
As the author of this column, I will be reaching out to various providers of marketing products and services. When feasible, I will actually use the product or service before providing a full review of its quality, ease of use and effectiveness. I will also include a comprehensive cost/benefit analysis. If something proves to be useful, I will share my results with you; I will not be reviewing anything that does not add value to your marketing program. In addition, I will try and negotiate a free trial or a discounted purchase price from the vendor. This way, you can try it out yourself, at a reduced risk, and see if it works for you.
Now, let’s move into something a little meatier: marketing, specifically reverse mortgage marketing. I won’t bore you with stories of the industry’s tarnished past. You already know about that and hopefully you weren’t part of the problem. The way I see it, 51 years after Nellie Young took out the very first reverse mortgage, seniors still haven’t been educated to the point where they fully understand reverse mortgages, and neither has the general public. On the flip side, consider these facts from a 2006 AARP survey:
Consumer evaluations were very positive:
* 58 percent of borrowers indicated that the loan had completely met their needs, 24 percent said their needs were mostly met, and 12 percent said their needs had been partly met.
* 93 percent of borrowers reported that their reverse mortgages had had a mostly positive effect on their lives, compared with 3 percent who said the effect was mostly negative.
* 93 percent of borrowers and 75 percent of non-borrowers reported that they were satisfied with their experiences with lenders.
So the question remains: If the vast majority of reverse mortgagors are pleased with their reverse mortgage experience, why is there still such a hurdle in convincing seniors to take one out, or to even consider it?
The reason is a very simple fact: We, the industry, have done a very poor job of educating the public. I think we all tend to get wrapped up in the short-term view of commissions and profits versus the bigger picture of mass-market acceptance. We need to leave our used car salesman’s plaid jackets at home for the next few years and truly educate the public through our combined marketing efforts. That starts with each and every loan officer and continues with lenders, and even more importantly and appropriately, with our trade associations. We need to debunk the myths and lies that have proliferated in this industry.
The proverbial ball has been dropped and we all need to do our part in turning things around— 79,000,000 baby boomers
So how do we do it? I am officially claiming to have coined the term “educational marketing.” (Yes, you read it here first!) What exactly is educational marketing? Think of it as marketing that is geared more toward educating the prospect than selling to the prospect. I am a firm believer in spending my valuable time selling only to those who have raised their hand and said they were interested. It is the job of marketing to get more people to raise their hands. We need to target our marketing more efficiently to reach that goal. I’m reminded of an old tag line for a discount designer clothing store here in New York. It said, “An educated consumer is our best customer,” and that phrase couldn’t apply more to our industry.
Our collective marketing efforts must debunk the myths and lies believed by the general public. I was discussing a family friend’s circumstances with my 74-year-old mother recently. The woman we were speaking about is 75, has been a widow for decades and has struggled financially for most of that time. I suggested that she tell her friend to speak to me about a reverse mortgage and Mom replied, “Yes, but I don’t think she’ll want to do it because the bank will own her home.” My own mother! That was when it hit me: As an industry, we really need to start educating the public and there is no better time than now.
So, as this column moves forward, I will emphasize educational marketing as much as possible, for I sincerely believe therein lies the future success of our industry.
As a reverse mortgage professional, you must realize that you don’t have to be the best loan officer or lender to be wildly successful, but you do have to be a great marketer of reverse mortgages! You can be the most organized; you can know every rule, guideline and regulation; and you can have the fanciest office, but if you don’t have a pipeline of interested and qualified prospects, nothing else really matters. That is what marketing is all about.
Marketing must become your most important priority if you plan on being successful, and education is the key to that success. I strongly suggest that we all do a comprehensive review of our marketing efforts and strategically plan to educate the public, and our seniors, in the upcoming year. Good luck and good marketing!
Have a marketing question or a product you’d like us to investigate?
Please email your comments and suggestions to Kevin at firstname.lastname@example.org.