Michigan Mutual, Inc. New Construction Loan Program

New Construction Loan Marketing/Communication Proposal

Grace Deyermond

Stephens College Senior Capstone

2013

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Table of Contents

EXECUTIVE SUMMARY 3

SITUATION ANALYSIS 4 SWOT ANALYSIS 5 RESEARCH 6-‐13 MESSAGING STRATEGY 14 TACTICS 15 BUDGET 16 TIMELINE 17 EVALUATION 18 REFERRENCES 19 APPENDIX A: PRIMARY RESEARCH SURVEY 20 APPENDIX B: PRIMARY RESEARCH HOME BUILDERS SURVEYED 21-‐22 APPENDIX C: DIRECT MAILER: TARGET AUDIENCE 1 23 APPENDIX D: DIRECT MAILER: TARGET AUDIENCE 2 24 APPENDIX E: MONTHLY NEWS LETTER: TARGET TUDIENCES 1 & 2 25-‐26 APPENDIX F: BLOG: TARGET AUDIENCE 1 & 2 27 APPENDIX G: FACEBOOK PAGE: TARGET AUDIENCE 2 28 APPENDIX H: TWITTER FEED: TARGET AUDIENCE 2 29 APPENDIX I: FLYER: TARGET AUDIENCE 1 30 APPENDIX J: MAGAZINE ADVERTISEMENT: TARGET AUDIENCE 2 31 APPENIX K: EMAIL CAMPAIGN: TARGET AUDIENCE 1 32

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Executive Summary Michigan Mutual, Inc. is a leader in the mortgage lending industry. Based on a

core set of values, Michigan Mutual, Inc. strives to continuously improve. The

newest improvement that is being made is the addition of construction loans to

the company’s repertoire. This proposal will provide a realistic and measurable

objective that is supported by sound research, messaging strategies, and tactics.

Michigan Mutual, Inc. is one of the most trusted mortgage lenders in the industry.

By creating a new construction loan program they are creating hope in those who

dare to dream of building a new home. Those who dream of building a home

need a lender they can trust. They can trust Michigan Mutual, Inc. with their new

construction loans.

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Situational Analysis

Background Mark and Hale Walker founded Michigan Mutual, Inc. in 1992. Established in the community of Port Huron, Michigan, Michigan Mutual, Inc. started off small and has grown into one of the most trusted mortgage banks in the industry. “The Walkers founded their business on commitment and community, and their shared fundamental belief in the importance of professional responsibility and customer service”

Michigan Mutual, Inc.

Values Michigan Mutual, Inc. is a family oriented company. The company mission is “Great people, building a great company, serving our communities.” They believe that customer service and professional responsibility are the keys that set them apart in the mortgage industry, with core values of Commitment, Integrity, Problem Solving, Family and Fun.

Audience Demographics There are two specific demographics that pertain to Michigan Mutual, Inc.’s new construction loan program. These include custom homebuilders and men and women with a single or combined annual income level of $150,000 and above. Custom homebuilders are looking for companies that are giving great customer service and have a speedy turn around time on loans. New construction single-family homebuyers with a single or combined annual income level of $150,000 are looking for something totally different. These people are financially smart. They are looking at several different companies and using the knowledge which they gain to make an informed decision on which of said companies is best suited to meet their specific needs.

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SWOT Analysis

Strengths When analyzing the various ways in which Michigan Mutual, Inc. operates, three obvious strengths have been uncovered. These are incredible customer service, competitive rates and quick turn around times.

Weakness The main weakness of Michigan Mutual, Inc. is that they have never before offered construction loans. This is a weakness because they have no prior experience dealing with this specific type of loan. However, Michigan Mutual, Inc. has several other types of loans and will learn to deal with the new loan program.

Opportunity The big opportunity for Michigan Mutual, Inc. is being able to have a piece of the pie. This means construction loans are like a pie. This pie is made up of all of the companies that offer construction loans and are making money from said loans. The opportunity to be a part of this industry segment is a big deal for Michigan Mutual, Inc.

Threats The biggest threat to the new construction loan program at Michigan Mutual, Inc. is their competition. Competitors include JP Morgan Chase, Wells Fargo, CitiMortgage and Bank of America, as well as other large and mid-size lenders.

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Research

Primary Research To begin the process of primary research it was recommended that a stratified survey be sent to custom homebuilders who are members of the Homebuilders Association of Columbia, Missouri. The decision was made to use the members of the Homebuilders Association of Columbia because they are knowledgeable of the industry at hand and accessible to the researcher. A total of 17 responses were recorded; the gathered information from these responses is shown below. Survey Results

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What current benefits do your customers receive from a mortgage lender when you refer them a customer?

Number of Responses Response

6 Lower Interest Rates

4 Great Customer Service

2 Not Applicable

1 Lower Application Fees

1 It Varies

1 Ease of Monthly Draw Payments

1 Having a Knowledgeable, Devoted Loan Officer that is Accessible

Name two strengths of current mortgage lenders to, which you give referrals.

9 Customer Service

7 Rates and Fees

3 Credibility

2 Knowledgeable about the construction process

1 Make the draw process easy for the builder

1 Mortgage Lenders refer business from others to me as a builder

8/17 Gave 1 Answer

8/17 Gave 2 Answers

1/17 Skipped the Question

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Name two weaknesses of current mortgage lenders, to which you give referrals.

8 Turn around times are slow

3 Custom home appraisals coming in too low

2 Lenders are too busy because of low rates

2 Application process is too complicated

1 Don't always approve the referral for a loan

1 Rates and fees

1 Over promise on time frames, lack of follow up with the client

1 Not Easy to Access For Individual Survey Questions please see Appendix A For a list of the members of the Homebuilders Association of Columbia please see Appendix B

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Secondary Research All secondary research was taken from the United States Census Bureau.

This chart shows that an average of 792 new home building permits were issued per month in 2012. The median number of permits issued was 784. The trend increase from year end 2011 to year end 2012 reflects a nearly 30% increase in new home building in the United States.

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Secondary Research Continued

According to the information above, it takes an average of 20 months from the date of a construction loan application to the end of the build. This provides Michigan Mutual with the opportunity to optimize the application process, to make the permit and the loan processes more functional for the homebuyer.

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Secondary Research Continued

This research shows that the average value of private residential single-family construction from January 2012 to October 2012 was $125,528.7 million. Also, it shows me that the median value of private residential single-family construction from January 2012 to October 2012 was $123,680.5 million, with a value increase of over 22% in new single family during this time frame.

This research shows that the average value of private residential single-family construction from January 2012 to December 2012 was $108187.33 million. Also, it shows the median value of private residential single-family construction from January 2012 to December 2012 was $107578 million. Comparison of new single family construction from year end 2011 to October 2012 reflects a value increase in excess of 25%.

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Messaging Strategy

Objective To initiate contact with homebuilders for the purpose of introducing them to Michigan Mutual, Inc.’s new construction lending program, with the goal of developing the sale of construction loans to borrowers who are purchasing new construction homes.

Audiences Target Audience 1 Custom Homebuilders in Missouri Target Audience 2 New construction single-family homebuyers with an annual income, either

single or combined, of $150,000 and above.

Goals Inform homebuilders in Missouri about the new construction lending program at Michigan Mutual, and the qualities that differentiate Michigan Mutual from its competitors. Increase referrals by homebuilders to customers by 2% by June 1, 2013.

Strategy Create an informative, visually appealing campaign that shows how the construction lending process with Michigan Mutual, Inc. is quick and accessible for consumers.

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Tactics Target Audience 1: Custom Homebuilders in Missouri

• Direct Mail • Email Campaign

This Email Campaign will focus on introducing the target audience to Michigan Mutual, Inc.

• Blog for Homebuilders The purpose of this blog is to give in-depth information to the target audience about the construction loan process at Michigan Mutual, Inc.

• Flyers • Monthly Newsletter

Target Audience 2: New construction single-family homebuyers with an annual income, either single or combined, of $150,000 and above.

• Direct Mail • Blog for the target audience • The purpose of this blog is to give in-depth information to the target

audience about the construction loan process at Michigan Mutual, Inc. • Facebook Page • Twitter Feed • Monthly Newsletter • Magazine Ad

This ad will be placed in Better Homes and Gardens and Construction Week.

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Budget

Overview The total budget for this campaign is $50,000. It will be broken down as follows:

• Direct Mail: $25,600 • Email Campaign: $2,000 • Blog for Target Audience 1: $200 • Flyers: $5,000 ($.005* 1,000,000 copies) • Monthly Newsletters: $5,000 • Blog for Target Audience 2: $200 • Facebook Advertising: $2,000 • Facebook Page: $FREE • Twitter Feed: $FREE • Magazine Ads: $10,000

25,600

2,000

10,000

5,000

200

2000 5000

200

Budget

Direct Mail

Email Campaign

Magazine Ads

Flyers

Blog: Target Audience 1

Facebook

Twitter

Monthly News Letters

Blog: Target Audience 2

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Timelines

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Evaluation Target Audience 1: Custom Home Builders in Missouri

• Direct mail will be evaluated by keeping track of how many we send out and how many responses it generates.

• Email Campaign: We will evaluate how successful this tactic is by collecting the number of responses we get from the email campaign.

• Blog: This will be evaluated by tabulating how many page views we get per month

• Flyers: We will evaluate the success of this measure by keeping a count of how many calls and emails we get from people seeing the flyers

Target Audience 2: New construction single-family homebuyers with an annual income, either single or combined, of $150,000 and above.

• Direct mail will be evaluated by keeping track of how many we send out and how many responses it generates. Blog: This will be evaluated by tabulating how many page views we get per month

• Our Facebook page will be evaluated by how many likes we accumulate. • Twitter will be evaluated by how many followers we have at the end of

each week. • The effectiveness of our magazine ad will be measured by how many

people respond to the ad for more information.

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References "About." About. Michigan Mutual, Inc., n.d. Web. 08 Apr. 2013.

"Construction." Census. U.S. Census Bureau, 2012. Web. 8 Apr. 2013.

"Home." Home. Michigan Mutual, Inc., n.d. Web. 08 Apr. 2013.

"Private Construction." Census. U.S. Census Bureau, 2011. Web. 8 Apr. 2013.

"Private Construction." Census. U.S. Census Bureau, 2012. Web. 8 Apr. 2013.

U.S. Census Bureau. U.S. Census Bureau, 2012. Web. 8 Apr. 2013. Kelli Morgan, Director of Compliance, Michigan Mutual, Inc. Dawn Booker, Director of Marketing, Michigan Mutual, Inc.

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Appendix A

Primary Research Survey Do you ever refer your customers to any mortgage lenders? Yes No If so, are you open to learning about a new construction-lending program from a well-established mortgage lender? Yes No Undecided What is the most effective means of communication by which you would want to receive information regarding this new construction-lending program? Social Media Direct Mail Email Phone Calls Brochures In referring your customers to a mortgage lender, what matters most to you. Rank 1 to 5 (1 being the most important) Ease of application process Customer service Turn around times Rates and fees What current benefits do your customers receive from a mortgage lender when you refer them a customer? (Open Answer) Name two strengths of current mortgage lenders to, which you give referrals. (Open Answer) Name two weaknesses of current mortgage lenders, to which you give referrals. (Open Answer)

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Appendix B

Primary Research Home Builders Surveyed Anderson Homes Russ Anderson [email protected] Beacon Street Properties LLC Scott Linnemeyer [email protected] C & C Construction Kas Carlson [email protected] EnRich Construction & Remodeling, Inc. [email protected] Hansman Custom Homes John Hansman [email protected] In Black Development Tim Kuchta [email protected] J-Bar Construction John Page [email protected] Kliethermes Homes & Remodeling Inc. Dan Kliethermes [email protected] Majestic Homes and Remodeling LLC Charles Clark [email protected] McCray Builders, Inc. Dan McCray [email protected]

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Muzzy Builders, Inc. Doug Muzzy [email protected] On Point Construction Ed Berendzen [email protected] Pat Brady, Inc. Pat Brady [email protected] Pate-Jones Construction John Jones Contacted at www.patejonesconstruction.com Precision Construction Services Jim Pellock Contacted at www.precisionmo.com Smith Building Company Danny Smith Jr. [email protected] Spotts Design Homes Garry Spotts [email protected] Swift Companies LLC Terry Alfermann [email protected] Tompkins Construction Mike Tompkins [email protected]

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Appendix C

Direct Mailer: Target Audience 1 Custom Homebuilders in Missouri

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Appendix D

Direct Mailer: Target Audience 2 New construction single-family homebuyers with an annual income, either single or combined, of $150,000 and above.

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Appendix E

Monthly News Letter: Target Audience 1 & 2 Front Side

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Monthly News Letter: Target Audience 1 & 2 Back Side

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Appendix F

Blog: Target Audience 1 & 2

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Appendix G

Facebook Page: Target Audience 2

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Appendix H

Twitter Feed: Target Audience 2 Twitter Handle: @MiMutualCLoans

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Appendix I

Flyer: Target Audience 1

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Appendix J

Magazine Advertisement: Target Audience 2

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Appendix K

Email Campaign: Target Audience 1

Michigan Mutual, Inc. New Construction Loan Program

Documents

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