This week I continue my series of columns focused on maximizing conversion, but go way back to the beginning of the lead generating cycle and talk once again about marketing.
Last time, I talked about Underwriters, and now I am back to the beginning of the process? That is not moving to closing. That is moving backwards! Well, I want to take some time out to discuss the biggest opportunity that the mortgage industry has generated since that crazy period when every loan was a no doc and the investors bought them all anyhow.†
I am not referring to the amazing technology solutions that I went to see at the MBA Tech show in Los Angeles last week. I am referring instead to what one of our industry's leading tech companies is doing to make one lucky person very wealthy. Of course, I mean Quicken Loans teaming up with Warren Buffett to offer $1 billion to someone for picking the entire NCAA championship bracket correctly. That truly is March Madness.
Of course, Buffett is no dummy, and surely neither is Dan Gilbert, the owner of Quicken Loans. Buffett surely knows that he is not underwriting a very high risk, with the chance of winning like 1 in a 9.2 quintillion if you guess on each game, and 1 in 128 billion if you actually are an expert in basketball prognostication. In fact, the numbers being thrown around are so crazy, I think we need Dr. Evil and his little pinky finger to properly enunciate the amounts. But everyone loves March Madness, and Quicken is generating a lot of attention for itself with this low risk gambit.
Now, full disclosure: I am a March Madness expert, having nearly won a pool several years ago that was being run by some friends of mine who work at a well-known government agency. These guys were hardcore geeks, but I nearly stole the pot by picking the winners for each game based on a very simple formula Ė I used SAT scores as an inverse predictor of athletic success. You see, I picked the team with the lowest SAT scores in each matchup, and watched with excitement as certain subpar schools swept aside Duke, Georgetown, UVA and others. Heading into the Final Four weekend, I was leading all others in my non-government-sanctioned pool, just by betting on the dumb kids. Despite this secret formula, I still had no chance to get every game correct, with teams like Stanford and Michigan as bracket busters. And I donít think that anyone is smart or lucky enough to get the Gilbert Bracket Buster challenge correct either.
Now, let me discuss Dan Gilbert's marketing plan for March Madness, which is certainly not a dumb move. In fact, itís pretty smart, and itís actually a good story about lead generation, marketing and conversion. Quicken is getting a lot out of their challenge to give away a billion dollars. First, they are getting huge brand recognition for their offer, getting huge publicity because the headline is so audacious and the topic is so top of mind. Everyone is talking about March Madness, and a subset of them are taking about Quicken too. That is great PR, and it's helped by the association with Warren Buffett and others. So, for branding reasons alone, Quicken is getting a lot out of this marketing campaign. In fact, this is such a big story that I was interviewed about it by NPR to offer my opinion about the marketing impact of this approach. When NPR is talking about the mortgage industry in a positive way, we know itís big news. I am just upset that I was interviewed for 10 minutes about this and they never offered me a free tote bag. (If you donít get that joke you have never sat through an NPR fund drive - lucky you.)
Itís hard to measure the benefits of branding campaigns, although Quicken sure seems invested in such approaches, as they also have a couple spokesmen touting their capabilities -- which apparently include playing a set of ďbucket drumsĒ and rescuing Ben Franklin from bad guys on speedy trains (watch the commercials if you donít understand this reference). However, the March Madness challenge is more than branding; itís also a direct response campaign that teaches us a lot about how mortgage marketing works.
Quicken has participants answer a series of questions as they opt in to participate in the Billion Dollar Challenge. These questions form two functions Ė first, it creates an opt-in scenario for Quicken where they have an option to contact the consumer through the mobile number or email provided. Now, the consumer can choose not to opt in, but many will not, and the act of opting in is very valuable. Quicken is a direct lender, which does a lot of direct mail, outbound email campaigns and outbound phone calling on mortgage prospects. The challenge of trying to get consumers on the phone is that most potential mortgage borrowers either do not have easily identified phone numbers or have opted into Do Not Call lists.†
My firm's research on this topic shows that over 80% of potential mortgage leads do not have phone numbers that can be contacted by the marketer unless the phone number is provided as part of an opt-in process. Quicken has good technology, and they likely have built a huge database of possible mortgage leads, perhaps by using advanced lead generation techniques including database, online and offline marketing. However, if they can get millions of March Madheads to suddenly opt in for contact, then perhaps some of those hard-to-contact leads will become easier to reach, driving up conversion (that word again).