It is clear to all reverse mortgage participants that something has to be done to improve our image. It was the reoccurring theme at the recent NRMLA conference. But talk can be cheap and without a coordinated, concerted effort to take control of our public perception, we may struggle to convince lawmakers, regulators, seniors and their caregivers that this product provides the benefit we believe.
The conversation should now proceed past the initial concern (and too often complaint), of nothing being done and examine the options that lie before us. All agree that a public relations campaign of some sort is the best move forward. Though, there are two major issues yet to be resolved; how to deliver an effective message and equally important, how to pay for it.
First, what does this PR initiative consist of? Other industries and groups have used public relations initiatives to get their point across for years. Pharmaceutical, oil, agriculture, food, beverage and alcohol industries, lobbying groups, charities and even government programs have all employed this kind of approach to improve the public perception of their respective industries. We acknowledge that we are not the same size, nor have the same buying power as some of these groups, though, we can learn from the results these campaigns have produced and modify them to best suit our situation.
To promote more discussion and further debate, the following are some ideas of how to first source, and then deploy, the message:
1.) First, I would propose the formulation of a white paper conducted by a third party organization focusing on the many benefits of a reverse mortgage. It would highlight the enormous customer satisfaction that already exists and take a quantitative approach to consumer attitudes, knowledge, experiences and behavioral trends. It would give the industry a clear and independent appraisal of the product as well as useful results and responses to assist in developing the message.
2.) With the white paper in hand, we could then begin a two pronged approach using different bodies for each strategy. One, a lobby group (working hand in hand with NRMLA) to approach lawmakers and regulators and secondly, a PR firm to get started on the consumer side. These could also be viewed as long and short term strategies respectively.
3.) The lobby group and NRMLA could then consider strategies such as:
a. Promoting the creation of a Congressional Research Committee to independently research and analyze the benefits of reverse mortgages.
b. Coordinating a Congressional Hearing on Reverse Mortgages where industry representatives can testify.
We need the lawmakers to come up with a consistent position on the HECM program. We all know the facts cut in our favor and this product is helping thousands of seniors. It’s damaging if we don’t help them get the facts straight.
4.) On the consumer side, a radio, TV, and print campaign should be employed utilizing the messaging resourced from the white paper with a careful budgetary eye on where and how seniors are currently using the three mediums.
5.) Finally, combine the media campaign, the white paper and lobbying efforts with strategic press releases and partnerships with senior organizations.
One industry campaign worth examining because of its effectiveness is the California Milk Processor Board’s “Got Milk” campaign which began in 1993. It is one of the most successful and recognizable industry campaigns of recent times. Studies showed the campaign achieved 90% awareness levels in California and household penetration of 70%. The campaign won a ton of marketing and advertising awards and has become the benchmark for many others. The Milk Board was facing similar problems; declining acceptance (sales for them) and a lack of relevance in the marketplace. Although they didn’t have the added burden of some negative press, they changed the way people perceived and ultimately consumed milk. The creator of that campaign, Jeff Manning (who also wrote a book about it), learned some important lessons from the experience:
1.) Leverage strategic publicity – Once your message is up and running, make sure you consider the journalistic media as an “audience” in addition to your target market. They need to be approached, marketed, lobbied and convinced to do stories just like your customer – sometimes in very different ways.
2.) Don’t try to do it alone and look to create association assets – Consider participants with similar interests to assist and provide added value and industry buy in. If you can also create partnerships and associations with other groups within your industry, it provides increased awareness and added credibility.
And there is this most important cautionary note from Mr Manning; “…the alignment of goals and budgets is absolutely crucial to the success of any campaign or organization.”
Which brings me to the other issue of financial resources and how we pay for such a campaign? What is the best approach and strategy to employ according to the capital resources we can procure? The best suggestion I’ve heard is a little “Back to the Future” by adding a small fee to each closed loan to build a campaign fund. How we charge servicers, title agencies, appraisers, or even Wall Street participants is up for more discussion. The other problem is time. How long before we can hope to achieve something as we build a fund worth deploying? Of course, that also leads to more questions; who controls the fund, the budget, the creative, the message and its delivery? The obvious answer to many of these problems is NRMLA. Though, as a paying member of our industry organization who is also paying to subsidize this marketing effort, how much control does each of us get in what the message is and what strategies are employed? I suggest we form a sub-committee under NRMLA that is comprised of fifteen or so veterans in our industry that can take on this challenge. We need more representation for an undertaking like this than just a few companies or individuals.
The cost for a campaign like this? Probably between $1 million and $2 million annually. If funded by a $10 – $20 unit tax, we can fund the initiative indefinitely or until we feel we have achieved our goals. I think we may also want to consider asking for start up contributions from some of our larger industry players.
This is not going to be a small undertaking and its going to take a lot of participants in the industry and money to get it off the ground. But the alternative is worse. If we don’t do anything, every facet of our industry will be negatively impacted – lead cost, marketing budgets, closing ratios, secondary and investor comfort and interest, legislative changes and further federal and state oversight. The list goes on but it’s not difficult to understand how important this kind of public relations effort is for all of us – the sustainability of this industry may rest in our very own hands. Why shouldn’t we get involved and make something happen? I am hoping this will start a productive debate and discussion to get things moving forward. This is the first step of something much needed – an industry campaign that galvanizes us and creates an environment where all the credible, reputable players can prosper and help thousands of more seniors live a better life.
Written by Reza Jahangiri, CEO of American Advisors Group
