Welcome to Broker Roundtable, where each week we ask list brokers to give their opinions on issues that matter to the marketing community. This week’s question: With the housing market still in trouble, what are the prospects for mortgage/real estate lists?
Our panel includes Leland Kroll of Kroll Direct Marketing Inc.; Pat Leone, of Leon Henry Inc.; Stefanie Pont, of Pont Media Direct; Jay Schwedelson of Worldata and Herb Torgersen of DirectInnovations Inc. Would you like to be considered to be a member of our roundtable? Contact Larry Riggs (email@example.com).
Leland Kroll, president, Kroll Direct Marketing Inc.:
I hate to be the bearer of bad news but unfortunately the housing market will probably remain in a depressed mode for quite a while. But this situation might prove to be a windfall of sorts for direct marketers looking to target homeowners interested in home improvement, landscaping, redecorating or refurnishing projects. Many homeowners will want to make their current living environments as pleasant and enjoyable as possible, especially if they are unable to make a move. Additionally, an emerging market that has government funding in many states will be the “home performance” sector. This offers tremendous opportunity for contractors and marketers prospecting to homeowners interested in making their homes more energy efficient. This will prove to be a very competitive market with the added benefit of the homeowners having additional disposable income to spend on goods and services rather than utility bills. The mortgage refinance market will also continue to need qualified prospects to reach especially if interest rates notch upward.
Pat Leone, senior account executive, Leon Henry Inc.:
Even though the housing market is challenging, there are still many homeowners, not only new, who need products to enjoy, maintain and improve their homes as well as other who need help with financial matters or refinancing – either to tap into home equity or avoid foreclosure.
Stefanie Pont, managing partner, Pont Media Direct:
The data is useful for a variety of opportunities but I would be much more inclined to run them through some type of credit screen as well as obviously the U.S. Postal Service’s National Change of Address service before using them. Having a mortgage and being able to pay it can be two very different things these days and that homeowner prospect could very well now be a credit risk. I still think any confirmed new mover is a good prospect for a variety of products, but the quantity has certainly dropped and will continue to move lower as fewer people move voluntarily.
Jay Schwedelson, CEO, Worldata:
Two areas of opportunity exist. Unfortunately, one of the outcomes of the poor housing market is an abundance of contacts who have poor credit or are opportunity seekers. These are audiences that many marketers often look to reach with certain offers. On the other side, those new home buyers that are buying in these tough economic times represent a very desirable audience for those who want to reach individuals with strong credit and viable income streams. While the number of contacts available in this category is small the potential response rates targeting these audiences are very high.
Herb Torgersen, president, DirectInnovations Inc.:
Given the current economic climate and the prevailing wisdom that the real estate market has not yet bottomed out, the short term outlook for these files is not overwhelmingly good. Through the real estate downturn the last couple of years American homeowners have lost over $1 trillion of net worth largely because of real estate market conditions. That said, the activity I am witnessing in the marketplace shows that mortgage/real estate lists are useful for remodeling companies and do-it-yourself retailers targeting homeowners with positive equity. Additionally, based on home sales, one could surmise that targeting real estate professionals to offer business-to-business products and services would not be highly profitable.