Marketings Impact on Loan Officer Acquisition

Surveys of loan officers had shown that a leading reason for joining the mortgage bank was the Media Center. Loan officers saw the automated marketing system as a way to gain an advantage in the competitive marketplace, because the system freed them to focus on closing deals.However, the marketing group had to express this competitive advantage in financial terms. For example, how much less did the bank pay to recruit new loan officers, compared with what rival companies paid? The marketing team quantified the advantage in two ways: First, it determined that rival companies paid an average signing bonus of $10,000 per officer; second, it calculated the Centers cost savings in executive recruiter fees, which came to roughly one-third of the officers average annual compensation.

Marketings Impact on Loan Officer Productivity

Were the loan officers who used the Media Center more productive than officers who didnt? That is, did they sell more mortgages?An analysis of production by Media Center usage confirmed that the answer was "yes." In fact, loan officers using the Media Center closed, on average, one loan per month, or 12 per year, more than non-members. By taking the average profit of an average loan officer, the marketing group was able to express its impact on loan officer productivity. The higher productivity of Media Center members generated another benefit as well: increased end-customer satisfaction (a marketing metric). But increased end-customer satisfaction alone did not express the impact in financial terms. Marketing had to link the marketing metric to a financial metric.The marketing group maintained that this increased satisfaction in turn led to increases in referrals and repeat end customers. The team easily translated the additional referrals and repeat customers into profits. Even Wall Street, the marketing group knew, takes notice when a mortgage companys loan officer production (or velocity) is higher than the industry average.

Marketings Impact on Loan Officer Retention

The retention rate for loan officers who were Media Center members was 25% higher than that of non-members. Clearly, marketing had exerted a significant impact on this key metric. Once again, however, the marketing team still needed to articulate the impact of the higher retention rate in financial terms. To that end, the SVP expressed the Media Centers cash-flow value as 25% written over the course of the year by members, multiplied by a 10% margin on each loan. Thats the revenue contribution from increased loan officer retention.He then applied the retention rate over several years to derive the lifetime value of a loan officer. Of course, this analysis assumed that the Media Center caused retention rates to improve. An alternative theory could hold that more ambitious loan officers were drawn to the Center, and were more likely than less ambitious loan officers to stay with the company.

If this were the case, top management might reasonably have discounted some of the financial impact the marketing group had calculated. Nevertheless, the SVPs analysis went a long way toward establishing one significant element of the financial value that the marketing team had generated.

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