Greenlight Looks to Shine Beyond California

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Greenlight Financial Services Inc., a midsize direct seller of mortgages to bigger banks, is using direct response radio and television to expand its footprint in Texas, Florida and Pennsylvania.


The Irvine, CA, firm also is testing for the first time a mail drop to existing customers and prospects, hoping to push more loans beyond its California base in market conditions ideal for home refinancing.


"The California real estate market is hot, but there are other markets that are just as hot," said Jeff Lisinicchia, chief financial officer of Greenlight. "The areas we picked are experiencing good growth in terms of appreciation of home values and refinance activity. So we feel comfortable going into these markets."


Indeed, the company has sold loans worth more than $5 billion since its September 2001 founding. Of that, $3.1 billion alone has come this year.


Both new marketing efforts, started this month, are created by Greenlight agency Kovel Fuller, Culver City, CA. For both, the intent was to generate calls to Greenlight's toll-free number at 866/66-FASTER or visits to the site at www.greenlightloans.com.


But beyond that, the marketing had different agendas. The mail push to 12,000 six-month customers, for example, thanked them for getting their mortgages from Greenlight. They also were encouraged to initiate their home improvement projects with a second mortgage.


To that end, copy in the letter and buck slip offered to waive the $495 home equity loan closing costs. Approval was promised in minutes and cash in days. And borrowing of up to 100 percent of the customer's home equity was allowed.


Similarly, the letter contrasted Greenlight's lower interest rates with the typical fees charged by credit cards. Also, unlike credit cards, the interest on a home equity loan is usually tax deductible.


A separate postcard mailer to 10,000 prospects in Arizona and Washington touted Greenlight's one closing fee of $995. The names were rented.


"Even if you've recently refinanced, you may save even more money," the card said. "Call now, with no upfront cost or obligation."


Lisinicchia is waiting to see the fruits of the mail effort.


"We've shied away from doing direct mail advertising because the conversion rate, according to the industry average, is less than 1 percent," he said.


So it is logical for Greenlight to rely on direct response radio and TV as it enters Miami, Philadelphia, West Palm Beach, Dallas and Houston.


Of the two spots, one called "Smart Guy" is humorous. At a backyard barbecue, the Smart Guy -- British, by the way -- asks the owner whether he refinanced his home last year. To an affirmative answer Smart Guy responds, "Well, if your rate is higher than this, you'll save even more money." A daily rate then pops up on the screen.


The owner says, "Re-fi again?" adding in a whiny voice, "What about points and other fees?"


"There are none," Smart Guy says.


"I should probably call," the owner says.


Smart Guy takes over the tongs on the grill and says, "I'll cook."


Two radio spots take off from the TV commercials.


The TV spots run 30 seconds and radio 60 seconds, both in the new markets as well as old. TV time typically is purchased for the morning, midday and evening news feeds. Examples are local spots on "Good Morning, America" and "The Today Show" and the 11 a.m., noon, 4 p.m., 5 p.m. and 6 p.m. newscasts. Business news spots also are bought.


The broadcast spots herald Greenlight's second marketing rollout beyond the California home market. The company already runs ads in Phoenix, Seattle and Orlando, FL.


Though the plan is mostly local spots, a smattering of national ads appears on CNN and Fox News for branding purposes.


Lisinicchia claims direct response broadcast media typically yields a 20 percent conversion rate for his company. This means that 20 percent of the calls received by the company's 200-strong Irvine and Green Brook, NJ-based contact center staff are converted into applications.


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