How to Reduce Your Cost Per Lead and Closed: A Deeper Look
New regulations are having a profound impact on the mortgage industry. For mortgage companies, profitability margins per closed loan are thinning due to increased compliance, competition, production costs and more. This fact coupled with decreased origination volume is affecting all sectors of the industry, motivating CEO’s to look for places to reduce cost, including marketing costs per lead and ultimately cost per closed transaction. So, either the marketing budget needs to be cut back, or it needs to do a better job of driving more leads…or both.
If you were to conduct a Google search on how to reduce your cost-per-lead, nearly every article or blog post you’ll read talks about social media deployment, email marketing, mailings, content marketing, billboards, PPC campaigns, purchasing the right day parts, purchasing the right list and many more items on a typical marketers “to do” list.
Tactics like these if well-coordinated can boost performance but fail to have a cumulative effect IF there are cracks in the underlying foundation…your brand. When your brand is weak, this is reflected in the overall quality and consistency of your communications and their ability to set you apart in the eyes of your target audiences.
Consistent, high quality marketing communications activities in lockstep with a solid brand build upon each other and make an indelible impression over time. This impression is what creates brand understanding and brand loyalty. Brand loyalty means, at the very least, that you’re always in the final consideration set as someone with whom people would consider doing business because your brand is strong because it is consistent and has a point of differentiation that is made clear in all communications. When I refer to “communications” I’m not just referring to your marketing, but also to every interaction your audience has with your company.
This cumulative effect is why great brands experience a higher ROI on their marketing and public relations efforts than others. Loyal followers keep coming back. They don’t cost anything to market to. They’ll help you spread the good word about your company in many ways both on and off-line.
For example, if you’re a mortgage company, how do you treat real estate agents? What can they count on from you, no matter what, consistently, that makes them feel good about sending you referrals? If your company brand claims to place emphasis on catering to their needs and you’ve successfully fulfilled this claim but then lose focus during a refinance wave, then your brand lacks consistency. You’ve confused them. Now they will refer their clients to others who will gladly pick up your slack and give them the attention they need. Their loyalty is transferred to another brand. Regaining their loyalty will take a lot of time and money which drives up your cost per lead and closed transaction.
Therefore, if your marketing cost-per-lead is too high, don’t automatically assume that the “problem” resides with marketing. Maybe your marketing tactics are just fine. Consider whether the problem could be with your brand instead of your marketing plan.
Here are some ways to determine whether you have a marketing or brand problem:
- If you find you win most of the time based solely on price or interest rate, you have a brand problem.
- If in the eyes of your mortgage loan originators, employees, customers and prospects there is a lack of clarity in why they should conduct business with you, then you have a brand problem.
- If competitors are successful at chipping away at your market share and you don’t have a strategy to gain it back, you have a brand problem.
- If your sales materials basically read the same as those of your competitors with the same tone and mundane filler copy, you have a brand problem.
- If your creative is dry, if you don’t have a call to action, don’t know where/how often to run your ads or if you don’t know the best times to launch an email campaign or run a successful inbound marketing campaign, you have a marketing problem.
If you feel like you may well have a brand problem after evaluating yourself against these points, here are steps you can take to resolve this:
STEPS TO UNCOVER AND FIX A BRAND PROBLEM TO DRIVE HIGHER PROFITABILITY
1) Uncover any confusion about your brand in your own company. Conduct an internal assessment by survey to discover how managers and employees define your brand, feel it stacks up in the competitive environment, how they feel about you as an employer and more. If your internal audience reveals inconsistencies and internal cultural issues, that’s surely a problem that needs to be dealt with among the people who should be believing in you as a company and “living” your brand throughout the day. . People need to be clear about why they’re coming to work each day if you expect them to really be on your team. They need to know why it’s better to be on your team than that of someone else.
If your own people don’t know what standards they should be living up to, then this is costing you money. Why? Because your own people struggle with how to convey your brand clearly and don’t clearly understand why you exist or what sets you apart in the market. Companies with weak brands also have higher employee turnover due to less loyalty which also costs you money.
2) Uncover any external confusion about your brand. Similar to the internal assessment in #1, you may consider conducting an external assessment of your brand as well. This can be accomplished fairly easily with nearly the same survey questions. You should survey your business referral sources, current customers and select potential customers.
If you find that there is confusion about what your brand is externally, this means your credibility in the market place is watered down which is surely costing you money. Why? Because since many brands have this problem, at best you’re lateral to your competitors…just another “me too” offering the same thing with little to no differentiation. You may be busting your tail just to be considered another mediocre brand, never becoming a dominant force in your niche.
3) Eliminate any market place confusion about your brand once it’s been uncovered. The process for eliminating this confusion begins with taking a deep dive into your purpose as a company. Ask yourself why you started your company, what you stand for, what you stand against, why you think you’ll be successful in the market, who your customer is (and is not) and what you want to become and ultimately mean to your audience in the long run.
If you eliminate market place confusion about your company, sharpening your unique selling points and the essence of why you’re in business…this certainly is a factor in reducing your cost-per-lead. Why? Because messages delivered and fulfilled consistently give you an edge on your competition that you can develop further to set yourself apart from them. These messages have a cumulative effect and therefore help build brand equity and brand understanding.
4) Review all marketing pieces. These pieces should include direct mailers, brochures, presentation materials, folders, website, billboards, ads…anything and everything with a printed message on it all the way down to coffee cups and pens. The goal of reviewing all of these pieces is to determine consistency in messaging, positioning, look and feel that is grounded in your unique selling points and the essence of why you exist.
If you’re messaging, positioning, look and feel are inconsistent across different mediums, then each time you make an impression on your audience, it’s a new impression instead of an impression that builds on the last. So, no real equity is built. This costs money and again drives up your cost-per-lead. Your color pallets, fonts, messaging, ad layouts, tone, etc. should all match so people recognize what you look like and don’t feel like they’re being introduced to a new company every time they see you. All of these elements say something about your company…a psychological fact.
Reducing your cost per lead and cost per closed transaction runs much deeper than a set of marketing tactics. It requires a strong brand foundation. Otherwise, you’re probably spending more money than is necessary on marketing on a per transaction basis.
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