People love free stuff, and even the mortgage industry can tap into that desire to draw people in. But isn't giving away free stuff expensive?
By David Lykken
Special to MPA
Lately, I've been discussing the power of giving away value in drawing in more business. People love free stuff, and even the mortgage industry can tap into that desire to draw people in.
But, isn't giving away free stuff expensive? Isn't it a waste of resources to give away products, services, or information that you could otherwise be charging for? It all depends.
First, you need to take into account how much business you're gaining from the services you're charging for because you have the free offering. Like any other marketing decision, you just need to determine if the added revenue exceeds the cost.
But you can also think of ways to spread the costs across customers. For example, if you purchase software that gives you financial reports you can give away to customers, the fee for the service can be spread across many customers. It's all about comparing the marginal cost to the marginal benefit. Just find something that works for you.
David Lykken is 40-year industry veteran who consults on virtually all aspects of mortgage banking. David hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals.
Special to MPA
Lately, I've been discussing the power of giving away value in drawing in more business. People love free stuff, and even the mortgage industry can tap into that desire to draw people in.
But, isn't giving away free stuff expensive? Isn't it a waste of resources to give away products, services, or information that you could otherwise be charging for? It all depends.
First, you need to take into account how much business you're gaining from the services you're charging for because you have the free offering. Like any other marketing decision, you just need to determine if the added revenue exceeds the cost.
But you can also think of ways to spread the costs across customers. For example, if you purchase software that gives you financial reports you can give away to customers, the fee for the service can be spread across many customers. It's all about comparing the marginal cost to the marginal benefit. Just find something that works for you.
David Lykken is 40-year industry veteran who consults on virtually all aspects of mortgage banking. David hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals.
