Best practices when calling distressed homeowners

Using telemarketing as a channel to reach out to homeowners 30, 60, or 90+ days late on their mortgage payment.  Many marketers prefer to make contact with distressed homeowners over the phone, but in my view, that’s analogous to calling up a stranger and asking them if they have a drinking problem. Would they admit to a total stranger that they have an addiction?

I believe that the phone can be a good follow-up device once a distressed homeowner knows you, or at least knows of you. If you’ve made initial contact with distressed homeowners through other channels, you have more of a licence to call them. Of course, it is not “cold calling” if the homeowner volunteers their phone number through a web-based form you can drive them to in order to download a free report, video, or other snippet of information – more on that later.

First off, when identifying homeowners in pre-foreclosure, phone numbers are in short supply because of two dynamics:

1.     Land lines are becoming obsolete, as more and more homeowners – and particularly younger homeowners – are using mobile devices.
2.     A staggering amount of homeowners that do have a land line are registered with on the Do Not Call List.

We can only obtain phone numbers from the credit reporting agencies that are compliant with the DNC regulations. They are real legal sticklers when it comes to that. Now, certainly no responsible marketing company would advocate looking up the homeowner without regard to the do not call regulations and we stop short of that. It is, however, noteworthy that most agents and others in the distressed property industry don’t seem to care about the DNC. Their sentiment is, “I’m not really selling anything”, and in fact, they are reaching out to help. It’s not as if they are selling steak knives or peddling a magazine subscription – it’s almost as if they are conducting social work. Says one subscriber of our pre-foreclosure data: “I’m not bothered by the do not call list, because if it wasn’t for me, these families would have their belongings on the curb”.

The appeal of calling distressed homeowners is obvious. There is little cost to getting the conversation rolling on the phone – the biggest cost is the time associated with making the calls. Moreover, there is an immediate response if you can get these homeowners on the phone, right? In my view, there is a fallacy in this thinking.

•     For one, financially distressed borrowers are getting deluged with collection calls and so many of these homeowners simply are not coming to the phone or they change numbers.
•     Second, many homeowners that are not paying their mortgage are not paying other bills, including their phone bill, and so the phone company disconnects their number.
•     Finally, working with distressed homeowners is a process and requires a concerted, multi-pronged approach through multiple channels. It is not going to be a one-call close. While there is a perceived sense of instant     gratification in using telemarketing, this is not the case from my experience.

Direct mail needs to be part of any successful short sale acquisition program. Direct mail leads convert a higher rate than telemarketing due to the self-selected nature of the responder. Direct mail leads have consciously made the choice to respond. Unlike a telemarketing lead where the choice to respond may be a concession, the choice to respond to direct mail is based on a genuine interest from the homeowner that wants to explore what their alternatives to foreclosure are.

During an age where marketers are zipping tweets and pulling in fans for Facebook, direct mail can seem decidedly old school. Yet direct mail should not be dismissed as too pricey or passe, and can be combined with online marketing to create synergy. Direct mail and online marketing are not mutually exclusive, but compliment one another.

For instance, you can use direct mail to drive a distressed homeowner to a landing page, where they can get access to a free report such as “10 things you should never do if you fall behind on your mortgage payment”. In order to obtain the snippet of information you are offering, they must fill out a form, including their phone number. Caution is an order, however, in asking the homeowner to fill out too much information. Pry too much and you guarantee that the homeowner will be scared away. A phone number and e-mail address should suffice.

It should go without saying (but it’s said because some agents do this) that if you elect to call distressed homeowners, you should never profess that you have any inside knowledge that they are falling behind on their mortgage payments. This will only alienate them at best, or at worst, lead to a mouthful of expletives.

I hope you found the article useful.  Give me a call if you have any questions.