Making an Emotional Connection with Distressed Homeowners

Would you call up a stranger and ask them if they have a drinking problem? Probably not.

On a national average, 15-45% of our Pre-NOD records have phone numbers compliant with the do not call regulations. In some locales, it’s much lower.

The reality is landlines are becoming increasingly obsolete as more and more people – especially younger people – use mobile devices. The overwhelming majority of those families that actually have a house phone are on the Do Not Call List. Of those that have a DNC compliant phone number, many of them are just bored people that like talking to sales people!  CDLData.com has cell phone numbers!

While the phone can be a good follow up device, I don’t think that the telephone should be used by itself as a stand alone marketing vehicle – our pre foreclosure list shouldn’t be a purely telemarketing list to be dumped into a dialer. At best, homeowners that have missed a mortgage payment are probably too embarrassed to admit that there is a problem over the phone to a stranger that they know nothing about. At worst, they might think that you are a vulture looking to swoop down and profit from their misery.

Would an alcoholic admit that they have a drinking problem to someone that calls them up out of the blue? It’s probably the quickest way to get the phone slammed in your ear. Call up a stranger and ask them if they are late on their payments and you will get a predictable response, I
guarantee it.

I’m not saying that there is no value to calling homeowners that need your help. I’m just saying that it is most effective when used in parallel with other marketing vehicles such as direct mail and e-mail.

Having introduced yourself through other offline and/or online media, you have more of a license to call a troubled homeowner to offer your help.

“Hello, Mrs. Smith?…”
“Yes, this is Mrs. Smith… who are you?”
“I’m Randy Jones… I sent you a letter last week…”
“Oh, yea, I got your letter in the mail…”

Since the distressed homeowner knows you, or at least knows of you, they are more receptive to talk to you over the phone.

In my view, the phone can be a great follow up device to warm a lead after your initial presentation, be it a post card, a free report, a knock on the door, or a fortune cookie that says “Save your home. Call me.” In my view, you should only call a distressed borrower after they are familiar with you. Familiarity builds credibility, and in turn builds trust.

Only when they trust you – or at minimum know of you – will they admit there is a problem. Marketing has never meant to be and never will be a one-step process such as picking up the phone and blowing through phone numbers.

Telling Distressed Homeowners they can Stop Annoying Collection Calls

Marketing to distressed homeowners is a process. The reality is, many homeowners do not want to part with their most prized possession – their home. At least not yet. At least not with one marketing piece.

In earlier posts, I wrote about calls to action, which is what you want the homeowner to do NEXT. “Pick up the phone to schedule a personal consultation” is one obvious call to action, but let’s face it – many of these defaulting homeowners are gun shy and may not immediately warm up to a stranger.

Try experimenting with different calls to action. For example, one call to action might be, “Call me” or “Visit my website” for a free report on “how to stop annoying collection calls using the Fair Debt Collections Reporting Act.”

If there is a hardship, these homeowners are likely getting hounded by bill collectors. Many that would otherwise not pick up the phone to short sale their home, would reach out to you to learn how to stop annoying collection calls. You are adding something of value – they can have a peaceful evening without interruptions. This call to action – reduce the calls from bill collectors – is a much lower risk than “let me sell your house.”

Once they make contact with you, in this case to learn how to stop the nonstop collection calls without unplugging the phone, you have the opportunity to nurture the lead along towards a completed transaction. Remember, before you can sell their home, they have to first agree to work with you. In order for them to agree to work with you, you must first have a dialogue. Make it easy for them to enter into this dialog… don’t ask for too much at first. Take baby steps.

Just ask yourself what you would do if you were in a bind and were about to lose your home… what would be the easiest call to action?

1) Call for a private and confidential consultation;
2) Call me to sell your home;
3) Call or e-mail for your free report on how to stop harassing collection calls.

Hands down, I pick number 3. Do you agree?

Now, once they respond, you have their attention, and the opportunity to build trust and rapport.

Do the do not call Regulations have any teeth?

In an earlier post, I said that the availability of phone numbers is limited because of the staggering number of families on the Do Not Call List.

We include phone numbers when available, only if they are scrubbed against the do not call regulations. We cannot obtain a phone number from the credit bureau unless it is ok to call at that point of time (keep in mind, some phone numbers that are not on the do not call list today can be added to the do not call list in 30 days – a SANS number is required to cross check your database of phone numbers with an updated Do Not Call List).

Yet we encounter many clients that look the phone numbers up anyway, without regard to the Do Not Call List. One client even hires a computer wonk to take our list of defaulting homeowners and somehow gets the phone numbers automatically by comparing it to an internet yellow page directory (don’t ask me how to do it).

Among many clients, the sentiment seems to be, “I’m not really selling anything”, and so they think they are impervious to the do not call regulations.

Says one mortgage broker we work with in Southern California, “I don’t care about the do not call list. I’m not selling them a magazine subscription. If it wasn’t for me, they would be kicked out out
to the curb. I save their home.”

Another client memorably stated, “If they are heading for foreclosure, they are in a big mess. They have more to worry about than suing me for calling them.”

Points well taken, but it’s a slippery slope, and certainly we cannot advocate looking up phone numbers if they are on the do not call registry. There are potential consequences to calling homeowners that have explicitly banned telemarketing calls. For more information on these regulations, visit www.donotcall.gov.

How colors can influence your direct mail campaign to Distressed Homeowners

If you are using direct mail, the fashion police won’t come looking for you if don’t choose the right color for your next mail out. But your clients may not either.

Colors aren’t as clear cut as words, but there is a meaning for most. Although it’s not an exact science, Cynthia Cornell, a color researcher with Color Communications Inc, says hues can influence the outcome of a direct mail campaign. It’s important, then, to be conscious of the message you want to convey to the recipients of your mail piece. It’s no coincidence that Campbell’s soup has used the same four colors on their labels year after year after year.

I’ve seen a lot of people using the color blue when marketing to distressed homeowners, because it conveys calm, trust and dignity. A majority of people will report blue as their favorite color. Much of the world is blue – blue skies, blue seas. Seeing this color, in fact, produces a chemical that is calming, but that’s not true with all shades of blue. Some shades has the tendency of conveying a cold, uncaring message. Why are so many bedrooms blue? Because it’s a calm, resting color. Why are so many uniforms blue? Because over time, blue has been associated with steadfastness, dependability, wisdom and loyalty. People tend to be more productive in a blue room because they are calm and focused on the task at hand. In fact, nearly all sports are enhanced in blue surroundings.

I’ve also seen black when mailing out to distressed homeowners because it invokes strong emotions. Black conveys seriousness, power, stability and strength and the ability for high contrasts. It has the ability to create drama, as captured by this postcard that depicts a troubled girl: At www.CDLDATA.com, we provide early, accurate and exclusive pre foreclosure data for real estate professionals. To bounce some ideas around and get a count of distressed homeowners in your area, call 866-377-4599.

What can a REALTOR or investor learn from the diamond industry?

The diamond industry are masterful marketers. Think about it. Who would spend thousands of dollars on a little rock that comes from the earth, and a rock that is actually pretty abundant?

The answer is no one. The answer lies not in the gemological properties of the rock, but what that rock conveys.

What would be a better way to sell diamonds?

“This ring features a 1.4 carat, pear-shaped cut white diamond with a SI1 clarity grade and an H color rating.” Unless your a gemologist, this ad is pure gibberish. Compare that ad to this:

“Imagine that special evening when you gently slide this on your finger and stare intensely into her eyes. She peers at this symbol of your devotion, the promise of your future together, and tears begin to glisten. An adoring smile spreads across her face, and at that moment your love is sealed forever.” Which is a better way to sell diamonds?

Benefits are the language of emotion. Features are the language of logic. As world renowned sales trainer Zig Ziglar explains, “People buy on emotion and justify it with logic.”

For a distressed homeowner to work with you, they must first like you and trust you and so intellectual features will not win them over.

“We’ve helped 28 clients this month avoid foreclosure” is a feature, not a benefit. “We’re a member of the Better Business Bureau” is another intellectual feature that will not compel troubled homeowners to work with you. Are you a Certified Distressed Property Expert or have another four-letter acronym that gives you special training to resolve problems with real estate loans? That’s great, but the distressed borrower won’t initially care. They will make their decision to work with you based on emotion, and justify it with your credentials later.

Some examples of benefits might be, “Get a good nights sleep for the first time in six months”…. “Move on to build better memories”…. “Relieve the uncertainty”… “Help your family”…. “Save your credit”… “Return to the normalcy of your day to day affairs”… “Stop the harassing phone calls”, etc.

When putting your message out to distressed borrowers, it’s important to know that it’s not about you, or your realty, or even your expertise. It’s about the troubled homeowner that needs your help.

How you will help them solve their problem, make their lives better and most of all, how you will make them feel good.

When writing to Distressed Homeowners, include a P.S.

While other parts of your letter may be perused more thoroughly, studies show than nearly 4 our of 5 people read the P.S. first, because it’s viewed as a more intimate message. That’s right, they will read the P.S. before any other part of your mail package.

Your P.S. can be a hard or soft sell, or in the event of a mail piece to distressed homeowners, provide a sense of urgency to act now. Perhaps this is the best use of the P.S – to create a sense of urgency to act NOW. The time is ticking for a distressed homeowner, and you can avail the P.S. to remind them that time is running out. Another use of the P.S. is to send them to a website to download a free report or snippet of information. (you might consider prompting the user to enter their e-mail address to access the information, so that you have their e-mail address for repetitive messages).

You can also offer something of value in exchange for a personal consultation. For example, you promise the homeowner that if you cannot provide the most viable financial solution that is legally available, you will receive a $100 gift card. I have rarely seen these gurantees or perks in real estate, but they work well with other products and services. Am I alone here in suggesting that?

You can also repeat your key benefits in the P.S. Help your family, move on to build better memories, save your credit, stop harassing phone calls, etc. I’ve wrote at length in earlier posts
about articulating these benefits.

Avail the P.S. as a powerful, eyeball gripping tool to resonate with the reader.

P.S. Your letter needs to be opened before it is read. Consider handwriting the address to guarantee it is opened!

At www.CDLDATA.com, we provide early, accurate and exclusive pre foreclosure data for real estate professionals. Be the first to reach homeowners at the first sign of hardship, before an NOD or Lis Pendens is filed.

Are you measuring the effectiveness of your social media?

By definition, if you are reading this, you are engaged in social media. Yet according tostatistics by Mashable, the social media guide, 84% of professionals do not track the return on investment of their social media efforts.

In other posts, I stressed the importance of measuring ROI of your online and offline marketing campaigns using specific metrics and tools. In light of this staggering statistic – the overwhelming majority of people do not track their social media efforts – it begs the question of whether you can take a methodical approach to measuring the ROI of social media.

This has a personal relevance to me because I landed my first sale from Twitter. As a relative newbie to Twitter, it was intriguing. Someone had re-tweeted some snippet of information I tweeted, and their associate found it interesting, called me for more information, and it led to a new account. This sparked many questions. What information did they find gripping? Should I spend more time on Twitter? What metrics indicate a successful social marketing campaign – is it new followers on Twitter, or hard and fast sales? I knew this was a topic that I needed to explore.

There are standard engagement metrics for driving visitors to your website, such as unique page views, how many pages your visitor viewed once on your page, the amount of time they spent on your site, the total time spent by each user, how often they came back, conversion, etc. ( earlier entry on using Google Analytics>

Yet how to you measure social media?

Content Consumption: Measure engagement by monitoring who is reading your content, where they are coming from and exactly what it is they are reading. What’s the most popular content on your site or blog? You can also ascertain the bounce rate – the percent of traffic that left your site after visiting a certain page.

Content Contribution: How many people are interacting with your content? This is a fast and easymetric to see how many people are exposed to your social media.

Social Bookmarking: Who is adding you as a friend, follower, subscriber?

Subscribing to feeds: You can determine how many of your readers are subscribing to your RSS feeds.

Emailing posts: How many times is your content being emailed to other people by your viewers?

Who is talking about you? Through analyzing links, you can see who is linking to your content.

Social media is not free. It demands time and inexorably, time is money. It makes sense then, to measure the effectiveness of it just as diligently as other investments.

At www.CDLDATA.com, we provide early, accurate and exclusive pre foreclosure data for real estate professionals. Be the first to reach homeowners at the first sign of hardship, before an NOD or Lis Pendens is filed.

Telling distressed homeowners what to do NEXT

When marketing to homeowners in pre foreclosure, you should stress the magnitude of what they are about to experience if they do not join you arm and arm.

Once the gravity of the situation is established, what should a troubled homeowner do next? The most likely call to action would be “call me to talk about the alternatives available” or “call me for a free consultation”, etc.

Yet I am of the view that many prospects need to be nurtured or “warmed” first, before they pick up the phone to call. This is even more true with homeowners that have defaulted on their mortgage payment, because they are at their wit’s end and feel vulnerable. They view you as a stranger and possibly a vulture looking to swoop down and profit from their misery. An adept investor will overcome this natural distrust by educating these homeowners on the alternatives available and become a personal advisor and coach with their best interest in mind.

So rather than “pick up the phone and call me” for a response mechanism or a call to action, how about something along these lines –

“Call or write for a free report on your credit reporting rights” or
“Call or write for a checklist of steps you can do if you are receive a certified letter from your lender” or
“Visit our website to learn more about new legislation”, etc…. the possibilities are left only to your imagination.

The concept is to nurture, inform, and educate a troubled homeowner before going in for the close.

Remember, before a homeowner in pre foreclosure can work with you, they have to TRUST you.

By providing some sort of white paper or snippet of information, you are doing 2 things.

1) You are asking a troubled homeowner to do something non-threatening by becoming better informed. There is little perceived risk with downloading a free report or checklist, etc.

2) You are building rapport and trust by educating the homeowners and conveying that you have their best interest in mind.

At CDLDATA.com, we provide early, accurate and exclusive pre foreclosure data on distressed homeowners before their hardship reaches any public file.

We’re often asked if our pre-public record list contains e-mail addresses of distressed homeowners. Although the answer unfortunately is no, there is a way to obtain their e-mail address.

Since our data is obtained through a “soft” credit inquiry when the lender reports a defaulted mortgage payment to one of the three credit bureaus, there is no opt in device for the borrower to volunteer their e-mail address. Yet you can prompt those defaulting homeowners for their e-mail address by sending them to a landing page and require them to submit an e-mail address before they download or view your free report, video, or other snippet of information.

In other words, you can offer the distressed homeowner something of value, in exchange for their e-mail address. By teasing the homeowner and piquing their interest by offering a free report, you can capture their e-mail address with a form as a condition to access the promised information.

Which credit bureau is the best to pull data from?

We’re often asked which of the three credit bureaus we get our data from. We can access from all three, but your choice of vendors will depend on which outputs are needed in your list of homeowners 30, 60, 90, or 120 days late on their mortgage payments.

For example, do you want to distinguish between FHA and VA loans? If so, only Equifax provides this filter. However, do you provide reverse mortgages and need the age of the homeowner? In that case, we would have to draw the data from Experian.

There are some other anomalies between vendors. To build a custom list that makes sense given your unique goals and niche audience, e-mail us at info@CDLDATA.com or call us at 866-377-4599.

The marketing secret every child knows

People respond to repetition. If you are a parent, you know how hard it is to refuse repeated requests for an ice cream or a desperately wanted toy.

If you are not a parent, you probably remember asking, even begging for a toy, a treat or permission to stay up past your bedtime, until your parents finally gave in.

Your prospects – homeowners that are 30, 60 or 90 days late on their mortgage payment – are similar. They may need to be asked repeatedly, too. The reality is marketing has never meant to be and will never be a one-time shot. It may take more multiple “touches” to create the trust and rapport necessary for a homeowner to work with you. It’s a well established rule of marketing that any communication is most effective when it is repeatedly brought to the attention of your target market.

Armed with an exclusive list of borrowers in pre foreclosure that recently missed a loan payment, you can send one message out and get a response. One transaction will pay for the cost of your campaign and put a lot of money in your pocket. Yet the best results come from using your database for repetitive marketing.

This principle of repetition is especially true when contacting distressed borrowers because many homeowners in preforeclosure are in denial, or may not warm immediately to a stranger. It’s worth repeating that homeowners must trust you first, before they give you permission to work with their lender. Familiarity builds credibility, which in turn builds trust. Your initial message should stress the magnitude of what will happen if the homeowner chooses to do nothing. Each subsequent message should escalate in tone and urgency.

We’re often asked what the best marketing vehicle is to generate a response. Is it a post card, a phone call, a letter, a knock on the door, or is it best to drive them to a website? The answer is all of the above. There is no silver bullet. Rather, it is constant exposure to your service that is the biggest determinant of success.

The more touch points you set up with distressed borrowers, the easier it will be for them to contact you and trust you. If you are persistent, you will have a smile on your face just like the kid with a belly full of ice cream that he/she convinced mom to buy.

For more insight into marketing to distressed homeowners, visit us at www.CDLDATA.com, call us at 866-377-4599, or e-mail us at info@CDLDATA.com.

Making an emotional connection with Distressed Homeowners

Adept investors that can empathize with a homeowner’s hardship and help them through this difficult period in their life will undoubtedly be successful. To make this connection, focusing on the emotional benefits of your service is more important than features.

A distressed borrower that is falling behind on their mortgage payment feels vulnerable. While they are eager for options and hope, they may be leery of a stranger and potentially, a vulture looking to swoop down and profit from their misery. How do you overcome this distrust? The answer is to appeal to the homeowners emotion, not their intellect.

Emotions are the gateway for a distressed homeowner to make a decision to work with you. World renowned sales trainer Zig Ziglar explains, “People usually buy on emotion and then justify it with logic.” Sure, a short sale carries less consequences than a foreclosure, but this is an intellectual feature, and does not speak to their emotion.

Benefits are the language of emotion. Features are the language of logic. Even people who insist they make logical decisions based on features do so because that’s what makes them feel better. All benefits are emotional.

What would be a better way to sell diamonds? “This ring features a 1.4 carat, pear-shaped cut white diamond with a SI1 clarity grade and an H color rating.” Unless you’re a gemologist, this ad is gibberish.

Here is what might sell diamonds better: “Imagine that special evening when you gently slip this on her finger and stare intensely into their eyes. She peers at this symbol of your devotion, the promise of your future together, and tears begin to glisten. An adoring smile spreads across her face, and at that moment your love is sealed forever.”

The upside down or late paying homeowner has only one question to be answered, “What’s In It For Me?”. It’s not about you, or your realty, or even your expertise. It’s about them – the distressed homeowners that need your help. How will you help them solve their problem, make their lives better and most of all, how will you make them feel good?

Some examples of benefits might be…. Move on to build better memories… Get a good night’s sleep for the first time in six months… Return to you normal, day-to-day affairs… Stop the harassing phone calls…. Save your credit… Help your family… Relieve the uncertainty…

“We’ve helped 28 clients this month avoid foreclosure” is a feature, not a benefit. “We’re a member of the Better Business Bureau” is another intellectual feature that will not build emotional rapport. If you’re a Certified Distressed Property Expert or have another four-letter acronym that gives you special training to resolve hardship situations, this is another feature that will not provide tangible benefits to the homeowner. Credentials are fine, but the distressed borrower will justify their decision to work with you on emotion first, and come back to your credentials later.

Advertising in a recession and a lesson in history

There’s been a lot of realtors that have fallen on tough times like everyone else. Many of them haven’t survived this climate, while others have thrived.

When people tell me that they are waiting for commission checks and deals to close and they cannot afford marketing, my response is “you can’t afford NOT to market your realty.” If you want to grow, you need to get your message out. It’s like gas in your car – without it, it won’t run.

In fact, I think it is even more imperative during recessionary periods to promote your business than in the good times. This is because with fewer dollars to go around, prospects are more selective in who they do business with. Advertising in a recession pays more dividends because you can separate your real estate business from the rest of the pack.

We can learn from history.

Not everyone went under during the depression. David Chase wrote a brilliant article about economic history during the depression, and how some businesses accelled. He cited three corporations that are still here today because they chose to amp up their marketing budget during this devestating time, while others cut back and fell into the ash heeps of failed businesses. For example,

Procter & Gamble: To this day, P&G embraces the philosophy of not reducing advertising budgets during times of recession.
Chevrolet: During the 1920s, Fords were outselling Chevrolets by 10 to 1.
Camel Cigarettes: In 1920, Camel was the top-selling tobacco products

The companies above had products across the spectrum from essential consumables to deferrable purchases to non-essential products. ”Procter and Gamble represents essential consumables, Chevrolet represents deferrable purchases, and Camel represents non-essential products. As you can see, the so-called hierarchy of necessity and want was sidestepped by those who had the marketing chutzpah to ignore such distinctions,” Chase wrote.These companies were in for the long-haul and they took marketing actions to ensure longevity. Today, they are alive and well.

American Business Media states that history has shown that businesses that have steadily continued or increased their advertising efforts during times of economic hardship experienced an overall spike in growth, at the expense of their competition.

What to say about direct mail? Is it here to say, or will it fall to the wayside as social media becomes more and more popular? Direct mail is here to stay. One thing you can say about direct mail is that it is measurable. David Chase put the nail on the head when he pointed out that when budget cuts are hacked, the advertising media with the least ability to measure ROI will lose revenue to measurable marketing channels.

In fact, Invest Bank Cowen and Company found in their research that spending on direct mail actually grew during all of the recessions since 1950. During tought times, will you survive?… or will your realty thrive?

At CDL Data, we provide early, accurate and exclusive pre foreclosure data to real estate professionals.

Good real estate marketing has clear call to action – it tells the prospect what to do next and creates the sense of urgency to act NOW. This can be pick up the phone, fill out a response card, go to a website, etc. While the call to action is often overlooked, it is critical because the only objective to your marketing is to get someone to respond, period. In this post, I’ll focus on marketing to distressed homeowners, although these principles can be applied to other audiences,
be it a prospective homeowner, a FSBO, expired listing, etc.

The most desirable result of your marketing to distressed homeowners would be the homeowner calls you to list their home, but we all know it’s not that easy! There may be people that want to pick up the phone to call and but they are just not quite ready yet. They are on the emotional roller-coaster of shame, embarrassment and panic, and they don’t want to warm up immediately to a stranger, especially when the entire media has been telling them that if someone offers foreclosure avoidance help, it’s probably a scam or a vulture looking to swoop in and profit from their misery.

To overcome this mistrust, experiment with some different calls to action. “Pick up the phone and call me” will not work with a great number of leery homeowners that don’t want to divulge their problems, much less to someone they don’t know from a can of paint. However, those homeowners that would not ordinarily pick up the phone might respond to getting a free report. Some possible report titles:

• A checklist of steps you can do when you receive a certified letter from your lender…
• Five things you should never do if you fall behind on your mortgage…
• How to stop annoying collection calls using the Fair Debt Collection Practices Act…
• Etc

At this point the homeowner isn’t thinking, “I want to list my home with this agent”. They are merely thinking, “I just lost my job and am falling behind on my house payment – I don’t want to make those five mistakes”, or they are thinking, “I am bombarded with calls from collectors, it would be great to have some piece and quiet”. Now, the conversation begins.