Why reverse mortgage lenders should tailor their marketing and embrace technology

Eddie Herda, recently hired by loanDepot, describes the realities and challenges of marketing reverse mortgages and what originators and brokers can keep in mind in their own efforts

Because reverse mortgages can be a lightning rod of a topic in the realm of financial services, educating consumers about the product can often be a challenge for individual loan originators and brokers.

When you have to manage the marketing operation and direction of some of the industry’s leading lenders, the challenges can increase with the scale.

Eddie Herda knows reverse mortgages, and he knows marketing. After previously working at American Advisors Group (AAG) as its VP, creative director of brand strategy, Herda was instrumental in creating the campaigns featuring spokesman Tom Selleck.

Many people both within and outside of the reverse mortgage industry see Selleck as its face, including originators who don’t work for AAG.

Herda was recently appointed to the position of VP, creative director of brand strategy at loanDepot. To get a better idea of the realities inherent in marketing reverse mortgages at the national level, RMD spoke with Herda for the newest episode of The RMD Podcast.

Getting into reverse mortgages

He began work as a copywriter before eventually working his way up to creative director positions, with his first client in the mortgage industry being Mr. Cooper.

“[That was] when they went through the rebrand from Nationstar to Mr. Cooper, and I was the guy that named Mr. Cooper,” he said.

Eddie Herda

While AAG was the first company he worked for marketing reverse mortgages, Herda came into that role familiar with marketing products designed for seniors that have had reputational challenges, he explained.

“My first foray into the world of senior retirement products was when I was working at an ad agency called Crispin Porter + Bogusky,” he said. “I was a creative director there working on the MetLife account on the annuities product. My experience is mostly working at agencies throughout my career.”

While working on the Mr. Cooper account, Herda was brought in to meet the AAG chief marketing officer by the then-CEO of the company, who offered details about some of the challenges the company and wider industry were facing from a branding standpoint.

He initially joined as a consultant before growing into a larger marketing role. Herda remained with AAG until it was acquired by Finance of America Companies (FOA) earlier this year.

What to know about reverse mortgage marketing

When asked about what individual originators and brokers can or should keep in mind as they aim to market themselves or the product in their own communities, Herda said that fear can often create a limited impact.

“I would say, don’t be afraid to try things that are different,” he said. “And don’t be afraid of technology. And by that, I mean that all of the new avenues that are available — whether you’re an individual originator or you’re a big business — all the digital tools are just as available to you as they are to the consumers.”

Industry professionals should also keep in mind that the customer journey only begins at the point of initial exposure to either the product or the professional selling it. Today, the ubiquity of technology allows customers to go far deeper than they could in the past.

“[Technology is] the pathway to any product purchase,” he said. “Specifically within the financial services industry, [these products] require significant amounts of additional research and the need to feel comfortable as a customer. [Customers are] relying on these financial services institutions to help have greater financial peace of mind, ideally. That’s why we turn to them.”

It would be a mistake to believe that a customer will simply call once they see a piece of direct-mail marketing since that is often only the beginning of developing an interested person into a fully-fledged customer, he said.

“Instead, they might look at your direct-mail piece, then might go to YouTube, then they might go to your Instagram and Facebook pages, then they might call you,” he said. “And then they might take down some numbers and then call a competitor, then they might go look at their YouTube page. So, it’s a circuitous effort by the customer before transactions are made today, so I would say really look at the availability of options.”

Market yourself and tailor the messaging

That comes back to the idea of a professional prioritizing how they market themselves, Herda said.

“I always like to lead with this idea that it’s not what you say, it’s what people hear,” he said. “And there’s a lot of things we want to say about the product, a lot of features that lead to some fantastic benefits. But unless you are tailoring your message and your marketing in a way that is, ideally, affecting the customer in a way that they’re hearing something new and compelling, they’re not going to respond at the rate that you want them to.”

A lack of tailored messaging and a desire to say something that customers believe is new or useful will not grow the industry to the levels it requires, Herda noted.

Affecting people in such a way often requires legwork to understand the audience you want to speak to. That customer listening was further crystallized by some of the research projects Herda undertook.

“I mentioned that I did a lot of commercials, a lot of direct mail, email campaigns, [and ran] the whole marketing gamut,” he said. “But I also spent a significant amount of time doing research. Focus groups [helped expand my] understanding of not only customers but prospective customers, adult children, financial professionals as well as heavy skeptics.”

Output from such projects “always influenced the messaging,” Herda said. He recounted one group that specifically included people with a heavily negative perception of reverse mortgages and that was company agnostic.

By the end of the session, many participants said they would go home to investigate the product further, Herda recalled.

“So then my thought was [that we now] know that the biggest skeptics can see the relevance that [the product] could have in their lives,” he said. “[We need to determine how] we take a one-and-a-half to two-hour conversation among their peers, and put that into smaller forms, whether it’s a YouTube video, a two-minute commercial or a direct-mail piece.”

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