If you totaled the amount of money you spend on marketing, including advertising, how much of it is spent pursuing new clients? If it's the majority, you're missing valuable referrals and overspending at the same time.
I've learned many loan officers have their marketing budgets allocated backwards. They spend more money hunting for new business instead of using it to harvest referrals.
To learn how to use your marketing dollars, you need to understand the marketing food chain. Basically there are four groups: leads, prospects, clients and loyal clients. Many loan officers pour most of their budget trying to persuade the first two groups; leads and prospects - people who hardly know you. And ignore your most valuable asset; your clients - people who trust you and are willing to promote you to others.
The following example delivers a clear perspective. Last week I was with a loan officer visiting her client, a real estate agent with Coldwell Banker, to discuss marketing. I asked the agent about his past efforts. He shared that last year he advertised his name to the tune of $35,000.00, or in his own words, "I spent what I could have bought for a new car." But what he said next was the real bombshell. After inputting client information into a database, his analysis revealed that 85% of his sales were referred. Wow, that's an expensive marketing lesson, isn't it?
The example is typical of many loan officers, who neglect the people who trust you to pursue strangers. It doesn't make the best sense on how to spend your money when you think about it, does it? Logic says if you need more clients, spend money finding new ones, but many fail to realize that your next sale is more likely to come from someone who has been referred, not from someone who you are a stranger.
That's what the agent learned. This year he's spent less (considerably), and at the same time increased sales in a downtrodden market and earned more per sale. He recognized that giving more attention and more of his budget to existing clients added to his income, lowered marketing costs and reduced stress.
