The discounted paper, or note business is an opportunity to make money. Vending machines, 900#’s, multi- level marketing and widgets are also opportunities to make money. The commonalities of all business opportunities is that most people fail, some do O.K., but very few experience overwhelming success. Those who succeed understand the tremendous importance of Marketing. Marketing is something those successful in business, at all levels, understand. It is clear to me that most folks who try their hand at “discounted paper” give little, if any, thought to this most critical ingredient. People will take course after course on the technical aspects of the note business, but spend almost no time at all in putting together a marketing plan. To be successful, you must get your phone to ring a lot- that is what marketing accomplishes. McDonald’s doesn’t sell all those burgers because theirs taste the best (do they?) but they sure know how to get people into their stores.
In the note business, you do not have to be the most knowledgeable, the best negotiator or have the fanciest office (or any office at all). What you need to do is get the phone to ring. Which, on the surface, doesn’t sound all that difficult. Of course, we know better.
Competition in the Note Business
Competition seems to be the excuse for many failures today. I do not buy that. I have been involved in discounted paper for over twenty years (that’s a statement not too many people can make) and hope to be involved for (at least) another twenty years. Something remains in my memory that I would like to share with you. It was a statement made by an experienced paper player at the first seminar I ever took. He said something like this, “There’s getting to be too much competition in this business; I’ll have to start looking around for something else.” That was said at a time when to my knowledge I was the only player in town, and my town is Chicago.
The point I am trying to make is; there was competition then and there is competition now, and there always will be competition. The quantity of competition in the market place today is enormous- that’s the bad news. The quality of that competition is weak, and that is the good news. I believe that the competition today is actually a benefit. A lot of note sellers are being discovered by the neophytes in the business, but because of their incompetence and/or greed, no business is transacted. If you market properly and professionally, you will get your fair share of this business.
I revealed to you how long I have been involved with discounted notes and mortgages.
What I neglected to tell you is how long I have been making money. I am sure you can see the important difference. Come up close and let me whisper in your ear; I do not want anyone else to hear this. Starting about ten years ago I started doing O.K. You see, when there was no competition, I was not making any money, and when the competition heated up, things began to get better. I do not want you to think that the correlation to success is competition. That is incorrect, as there are many other factors.
Making the Quantum Leap
Let me take this a little further. About five years ago, I made what I like to refer to as the quantum leap. That’s when you go from making nice money to making great money. It is not my intention to bore you with my personal story. I would prefer to help shortcut your success or hasten your departure from this business. The former, of course, would be preferable. However, if you are not ready, willing and able to do what needs to be done, then you would be better off packing it in and doing something else.
My quantum leap occurred (and so will yours) when I developed a long range, professional marketing program. The note business is long term; it is not a get-rich-quick scheme. For you to be a success, you must also think long term.
I would say that 75% of my closed transactions are with note holders who initially refused to sell. If you continue to market to these people in a professional and consistent manner, when the time comes for them to sell you will get your share of business. If you stop contacting the note seller, they will forget who you are and someone else will make the transaction. Every marketing piece you use must look professional. Some of the mailers I receive from “note buyers” are an absolute disgrace. This is a business you can run from a card table in a rented room. However, the material you put in the hands of note sellers must look and feel as if they came from a successful, professional source.
Here is an abbreviated list of the materials that make up my marketing program. In future articles, I will expand on these tools and how you can incorporate them into your own program.
Letters- Professional looking and sounding. Some targeted to individual note sellers, others directed to the professional market (This is ultimately where you want to focus your attention). Most unsuccessful paper players never enter the professional market.
Flyers- These are attention-getting and easy to use. I coordinate these with my other marketing tools.
Post Cards- Similar to the flyers. Send them out as you leave the courthouse.
Advertisements- not my favorite, but they have their place.
Brochures- A must. Done properly, they serve many purposes. I have seen many amateur brochures that look good but badly miss the mark. (I have also seen many that not only miss the mark- they also look bad).
24 hour info tape- An unbelievable winner. Works when you do not, and attracts many note sellers who will not respond to anything else. Very few paper players are using this powerful tool.
Note Owner’s Manual- This is something that I spent a lot of time and money to do but it has paid off big time and absolutely will set you apart from the competition and help you close more transactions. In addition, it can be used as its own little profit center. (More about this important concept in future articles.)
Mass exposure-This is an area that very few people ever take advantage of, and that is a huge mistake. If you want your business to accelerate rapidly, this is where it can happen. Do some or all of the following:
Radio & TV Interviews
Some of this is much easier than it sounds, and you do not have to use all of these tools. The addition of any of these to your marketing plan is a huge help for many reasons. There are many tools you can implement easily and immediately. I will discuss them with you in a future article.