Financial Marketing Systems Has developed two marketing programs designed to market home equity loans to your existing customer base.  The results are dramatic.  Below is a summary of both programs.  For more information contact:  Bob Singer, 815-398-2474,  Bobsinger@bankmktg.com

The BorrowingPowersm direct marketing program is designed to help banks maximize the profitability of their mortgage base by facilitating the cross sale of home equity loans.  We enable our clients to leverage the valuable information in their mortgage database by generating a highly personalized “good news” message to their mortgage customer.  A typical letter often starts out:

     “Based upon your original home appraisal of $151,209 in October, 2001, and your

       first mortgage balance of $66,027 as of March 6, 2006, we estimate that your      

      borrowing power may be as much as $64,000 or more!  The chart below

      demonstrates just how affordable borrowing can be.”

Homeowners intuitively understand that they may have built up equity in their home, but typically they’re not sure of how much or what the monthly payments might be.  That’s the reason we provide monthly payment information similar to the example above.

After reading our “good news” letter, customers start thinking of how they can take advantage of their new found borrowing power.  For some, it’s debt consolidation.  Others embark on a “mental buying trip”.  In both cases, they call the bank.

The key to this program is the highly personalized nature of the message.  We actually compute an estimate of BorrowingPowersm for each and every one of your mortgage customers.  Our estimates take into account the potential appreciation they may have experienced since originally financing their home.  More importantly, we translate the estimate of their BorrowingPowersm into monthly payment information.  It is the monthly payment that drives their increased interest and high response rates. As a result of this unique approach, it is common for our bank clients to experience 3% to 4% and even greater loan acquisition response rates.  

Harvest Bank (Dubuque, IA) achieved a 5.88% (loans booked) response rate.  St. Francis Bank’s (Milwaukee, WI) response rate was 9.7% (loans booked) with telemarketing by their loan officers.  AMCORE Bank (Rockford, IL) has achieved over 10% (documented in Consumer Lending News, Novmeber, 1997).  We are proud that our clients find the results of our program so rewarding that they frequently repeat the mailings.  We suggest multiple mailings throughout the year in order to “be in the customer’s face” when the customer is ready to borrow. 

Our clients include small banks, regional banks like Fifth Third and Mellon, and ABN-AMRO, the eighth largest banking conglomerate in the world.

BorrowingPowersm Lite utilizes the equity loan estimates we calculate for each of your mortgage customers in the course of conducting our BorrowingPowersm program. These estimates become the basis for a direct mail solicitation targeting your deposit customers, who are homeowners. The first paragraph typically starts out:

        "We thought you would be interested to know, that our mortgage customers, who

         live in your neighborhood, have on average $54,000  worth of home equity                       

         borrowing power."

By beginning the letter referencing your customer’s neighborhood, we make a “reader connection” which grabs their interest and causes them to read on.  Next we inform them of just how affordable home equity borrowing can be by providing monthly payment information.

It is the inclusion of the payment information that enables the prospect to fully appreciate the usefulness of their new found opportunity.

Although the BorrowingPowersm Lite  marketing program does not achieve the high response rates of our BorrowingPowersm program (3.5%-4%), we would expect to achieve .75% to 1.5% response, loans booked.  Best of all, we would expect to achieve these results at efficiency ratios of better than 14%.  That is, every $ .14 spent on our BorrowingPowersm Lite program can be expected to generate $1.00 of income.  That’s impressive!