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The Hot Lead Machine Mortgage Newsletter

How Many People Need a Loan?

According to the National Board of Realtors, 16% of all Americans move each year.  This means that if you made a list of your 100 best past clients, on the average 16 of them will move within the upcoming year and require a new home loan.  It is essential that you capitalize on the past goodwill that you have created and provide the financing for these clients.  They know you, trust you, and are satisfied with the past service you have provided. Therefore, you should be able to capture at least 50% of these high quality prospects.  Assuming you earn only $1,500.00 per loan, this business would equate to the following:

(100 Past Satisfied Clients) x (16% move rate) x ($1500 per loan) = $24,000

Closing Only 50% of this business leaves you with an extra $12,000 in commission annually.

Referral Leads

The average person in America knows 150 people, including friends, family, and co-workers.  This means that your top 100 past satisfied clients personally and collectively know approximately 15,000 people.  A total of 15,000 people translates to approximately 3,500 households.  According to a White House press release in June of 2002, the "overall U.S. homeownership rate was at a record high of 68.6%."  Of the 3,500 households previously mentioned approximately 2,300 (rounded down) are homeowners.  Of those 2,300 homeowners, 16% will be moving over the next year.  This means approximately 350 (rounded down) of your 100 past satisfied customer's immediate referral base will be moving over the next year.  By developing an ongoing relationship with your past satisfied clients, our experience shows that you can realistically expect a 20% rate of referral which translates to:

(350 Potential Qualified Referrals) x (20% referral rate) = 70 Qualified Leads

(70 Qualified Leads) x  ($1500 per loan) = $105,000

Closing Only 50% of this business leaves you with an extra $52,500 in commission annually.

In summary, the right marketing program to just 100 past satisfied customers can result in an additional $64,500 annually ($12,000 + $52,500). 

ROI (even 1 lead per month would pay for the mortgage newsletter subscription)

LEGEND:
Past Satisfied Customers: Number of past clients you can possibly mail to at this time.

Move Rate %: Average percentage of people that move each year.

Conversion Rate %: The percentage of your past clients and their referrals, who are in the process of moving, and that you provide financing to.  For example: 50% here means you expect to close half of all prospects' loans presented to you.

Average Loan Commission: Expected average loan commission per loan.

Potential Qualified Referrals: This figure represents the estimated total amount of qualified referrals (that is, prospects that are homeowners and are also moving).  This figure is calculated by taking the number of past satisfied customers plus all the people they potentially know, adjusted down into number of estimated homeowners, and finally multiplied by the move rate %.

Actual Referral Rate %:  This is the percentage of potential qualified referrals that is actually being referred to you.  For example, entering 20% here means that you expect 1 out of 5 of all potential qualified prospects to be referred to you by your past satisfied customers.

Total Extra Closed Loans: This number is comprised of the new loans gained from referrals added to the loans of all past moving clients that have decided to use your services again.

Total Extra Annual Commission: This figure is based on the total extra closed loans multiplied by the average loan commission.

Return On Investment:  This takes the total extra annual commission and divides it by the actual annual cost of The Hot Lead Machine.

Yes, you're reading it correctly.  The Hot Lead Machine mortgage newsletter can actually yield you thousands of percentage points of return on your investment!  What other investment that you know of can do that?

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