Strategies: Evolving into a mortgage marketing professional The mortgage originators who survive the refinance bust will be those who successfully adjust their vision from production and sales perspectives to a strategic marketing focus. In this article, a strategic marketing consultant shows how mortgage origination organizations can strengthen their competitive viability in volatile markets by aligning strategies and activities with market needs. Related links: Download the presentation "Marketing Fundamentals for Mortgage Origination Marketers" > Download Scotsman Guide article [PDF]: "Align Mortgage Origination Activities With Customer Needs For Long-Term Competitive Viability" Evolving to the Marketing Concept Will you survive the post-refinance market? Whether your title is broker, banker, consultant, officer, specialist, or chief-cook-and-bottle washer, if you’re a mortgage originator your primary job function is likely sales. This might not seem like a problem when you’re viewing the market from inside a refinance balloon that provides unlimited demand for your products. It’s especially not likely to be a problem if you’re one of those rare and gifted folks who can sell ice cubes to igloo dwellers. However, as those who’ve survived the end of a few refinance markets might know, many familiar signs and faces will vanish in the wake of the refinance bust. Mortgage companies that want to survive the post-refinance market will need to quickly transition from a sales perspective to the strategic marketing concept; in other words, they need to become Mortgage Origination Marketers. Sales is not marketing is not sales Contrary to the perspective and practice of many mortgage organizations, sales and marketing aren’t the same. Simply put: sales pushes a product while marketing creates long-term and profitable relationships by satisfying Customer needs. Some organizations can survive by applying different variations of each extreme; but the organizations that maintain competitive viability through volatile markets tend to be those that evolve into strategic marketing companies that are able to align their activities with market needs. The Marketing Concept Evolution of marketing perspective An organization’s marketing perspective is typically defined by its philosophy and culture, and is driven by its structure and processes. An organization’s marketing perspective in turn influences how or whether the organization can successfully operate in its competitive environment. As competitive environments become increasingly tough, organizations must evolve their perspectives and practices if they want to be viable. Here are the common perspectives through which organizations might advance: Production perspective An organization with a production perspective tends to have little or no competition and sees no ceiling o­n demand for its products. The primary strategic focus for the production-oriented company is to improve efficiency of production and to sell what’s easy to produce. The organization that sees through the production perspective will view everyone in the marketplace as having the same needs. Therefore, the production-oriented company tends to use mass marketing that assumes everyone is a potential customer. While this sounds like a perspective suited for manufacturers, many mortgage origination companies slip into a production perspective during refinance booms. They have an ample selection of loan products available, and they focus o­n simply selling them to a seemingly infinite supply of customers who tend to be knocking down their doors. In other words, there’s more demand than the mortgage origination company is able to meet without hiring more people to originate and process loans. However, when the demand starts to dwindle, these organizations will be forced to adjust their perspectives and practices if they hope to survive. Sales perspective An organization with a sales perspective recognizes that there is limited demand for its products in an environment that has competitors who are offering similar products. The sales-oriented company focuses o­n creating demand for its products in a crowded market and tends to push its products through personal and mass sales. This is the perspective from which most mortgage origination companies operate. During a refinance market, a sales-oriented mortgage company will typically limit its marketing communications mix to answering quote requests from rate advertisements. When the refinance market dies, the sales-oriented mortgage company will emphasize pushing rate sheets to real estate agents. In short, the mortgage sales organization pushes product to beat competitors – and will survive solely o­n its ability to hire and retain a talented sales staff. Marketing department perspective An organization with a marketing-department perspective recognizes that there are several functions of marketing that need to be coordinated to improve its competitive edge. The mortgage company that evolves to this level will supplement its sales efforts with a marketing communications function that coordinates several promotional contacts with the target customer, including: advertising, direct marketing, public relations, trade shows and events, seminars, and web site. This type of perspective takes some of the challenge from sales by generating qualified inquiries and focusing beyond the initial sale to build a customer base of referral and repeat customers. Strategic marketing perspective: the Mortgage Origination Marketer A mortgage company with a strategic marketing perspective will emphasize building lasting customer relationships by integrating long-term customer development strategies with profit initiatives. In other words, the strategic marketing organization aligns the activities of the organization to satisfy the needs of a target at a profit to the organization. This strategic marketing perspective is also known as the marketing concept. In contrast to the production perspective, which views everyone as the same, practicing the marketing concept allows organizations to recognize that different people have different needs, and involves every employee in discovering and satisfying those needs – as long as the efforts prove profitable to the organization. In contrast to the sales-perspective, which attempts to push product through a highly competitive environment for short-term production, the strategic marketing perspective allows Mortgage Origination Marketers to create lasting relationships by providing superior value to profitable Customers. To define an effective strategic marketing communications strategy you will need to package your brand attributes in the form of communicable units that can cut through the clutter of competitive noise to influence customers to consider you favorably duri The 5 Ps and the 1 C of marketing Organizations that have a strategic marketing focus will typically build their marketing mix o­n the traditional 4 Ps of marketing – Product, Price, Promotion, and Place – but with a twist. As a Mortgage Origination Marketer, you’ll know the importance of basing the 4 Ps o­n the Big C: the needs of your target Customer, as follows: Product is what you are offering to meet the specific needs of your target Customer. Price is determining how much your target Customer is willing or able to pay for your product. Promotion is how you tell your target Customer about the right product; this includes implementing marketing communications activities that allow you to get your message through competitive clutter to your target Customers in a way that influences their perceptions about you and their decisions about your services. Place is how and where you get the right product to your target Customer. This could include your office, the Internet, the telephone, the Customer’s home – or a combination of the above. There’s a fifth decision area that successful Mortgage Origination Marketers address: Positioning. Positioning is how your target Customer perceives you in comparison with your competitors. Are you the mortgage expert in your marketplace -- just like everybody else -- or have you come up with a substantive angle that sets you apart from the competition? For example, if your market is saturated with cookie-cutter conforming loan sources who all promote the “best rates” and the “best service”, you might be overlooking an opportunity to meet the needs of niche Customers who don’t fit in the cookie-cutter cast. If you can identify unmet needs in your marketplace and design your marketing mix around meeting those needs, you might find yourself in a less crowded and more profitable segment of the market -- that is until others figure out what you’re doing. By then, however, as a Mortgage Origination Marketer you’ll have already transitioned into another new and ever-changing marketplace. The companies who survive in a competitive environment understand the needs of the marketplace, focus their activities o­n meeting those needs at a profit, align their marketing mix and organizational activities with the needs of their target Customer The last originator standing will be a marketer Those who survive the refinance burst will be the o­nes who successfully adjust their vision from production and sales perspectives to a strategic marketing perspective. Becoming Mortgage Origination Marketers, the survivors will understand the needs of the marketplace, focus their activities o­n meeting those needs at a profit, align their marketing mix and organizational activities with the needs of their target Customers, and implement marketing and communications tactics that appropriately position their organizations in the minds of their target Customers. In short, Mortgage Origination Marketers will stop pushing product against a tide of increasingly fierce competitors, and will start establishing long-term relationships by satisfying Customer needs at a profit. About the author This article was adapted from Brent Duncan's seminar titled "Evolving into a Mortgage Origination Marketer." Brent Duncan is an adjunct professor at the University of Phoenix School of Business and Management where he teaches organizational psychology, organizational behavior, management, and marketing. Mr. Duncan specializes in developing strategic marketing functions for organizations in the high tech and mortgage industries. He also provides a free o­nline resource center for Mortgage Origination Marketers at RealMarCom.com. Contact Mr. Duncan at brentad[at]realmarcom.com.     Written by Brent Duncan Related links: Download the presentation "Marketing Fundamentals for Mortgage Origination Marketers" > Download Scotsman Guide article [PDF]: "Align Mortgage Origination Activities With Customer Needs For Long-Term Competitive Viability"