This past summer, the Consumer Financial Protection Bureau (CFPB) published a report that took a close look at the advertising landscape of the reverse mortgage industry, with a particular focus on direct mail.
Direct mail has been used by the industry for years, but with the rise of social media, smart devices and a desired shift by some toward video, RMD sought out input from a major lender in the space alongside an industry advertising veteran to learn if direct mail remains — or should remain — an important reverse mortgage advertising tool.
A ‘place for physical marketing’
Despite the fact that new media is becoming more pervasive and ubiquitous in daily life, even for seniors, the place that physical marketing materials have in a larger outreach strategy is not going away anytime soon, according to Alec Hanson, CMO of loanDepot. But the way such tools are used needs to be of a high quality, and engaging for the consumer, he said.
“I think there’s absolutely a place for the physical, still,” he said. “We all get junk mail, of course, but I really think there’s going to be a place for the physical marketing that will continue to be relevant. It’s going to take creativity in what you send somebody, that can help break through the noise of just all the junk that also shows up there.”
Hanson cited the re-emergence of quick-response codes, otherwise known as “QR codes,” as an example. QR codes can be scanned by the camera on a person’s smart device, and immediately direct them to a particular website or other piece of content.
QR codes seemed to fall out of favor in the late 2010s, but came roaring back after lockdowns were imposed as a response to the initial spread of COVID-19.
“QR codes made a dramatic reemergence during ‘COVID land,’” Hanson said. “I was laughing, [thinking about how] ‘it’s a dead technology, it’s gone.’ And then COVID came, and QR codes [came] back then.”
Making novel use of something like a QR code in a direct mail advertising piece can help direct potential customers to things like educational video content, Hanson said.
“Someone can immediately look at their phone, and now they’re on a journey of understanding,” he said. “Whereas traditional postcards [ask someone to] call [to find out if they] could be eligible for this. Now, we can give them something else, too. So I think it’s going to continue to play a significant role, but it has to be done well.”
Remaining conscious about how to use direct mail
For Eddie Herda, who also recently joined loanDepot as VP, creative director and brand strategy, direct mail has been an important part of the industry’s marketing tools for a long time, including at other major reverse mortgage lenders he has worked with.
But considerations about how and when it is deployed should be made that are sensitive to the needs of the senior demographic, he explained.
“I think that direct mail is and will always be a critical piece in anyone’s marketing quiver,” Herda said. “Right now, I do believe folks need to be conscious about what they’re sending out and how frequently they’re sending it out.”
As an example, just picking a timeframe in October or November for a direct mail advertising piece could seem arbitrary to some, but for seniors, that proves to be a month where they typically receive a higher volume of solicitations.
“If I’m sending out mail to someone over the age of 60 In October or November, well, guess what? They’re also getting a lot of Medicare stuff,” he said. “So, now you’re just getting lost in the fold. But I do believe it is critical and relevant.”
Here to stay, for now
Whether or not it is as critical or relevant as it may have been in the late 2000s, however, is another story, he explained.
“The purchase experience has been turned on its head,” Herda said. “If we look at COVID, just as an example, I would say it forced migration or evolution toward digital platforms for seniors. Oftentimes, marketers think, seniors [are] not on technology. Well, how do grandma and grandpa talk to the grandkids? FaceTime with an iPhone, right?”
Seniors are also an increasingly important part of the user base for Facebook, the social media platform owned by Meta. The result for the reverse mortgage business is that digital platforms will play a more important role in the future, Herda said.
“I do believe that they will dwarf direct mail, maybe not in the near term, but they will,” he said. “Over time, direct mail won’t be as effective or necessary, I believe.”
At the end of the day, the strategy and a clear-eyed vision of what your marketing intends to accomplish is critical to the eventual success of whichever platform or medium you choose to employ, Herda said.
For right now, however, “direct mail is here to stay,” he explained.