Target Marketer of the Year: Rich Smith
“Rich has been the driving force in resurrecting the Ditech brand and restoring it to prominence in today’s highly competitive mortgage landscape,” says Scott Cohen, managing director and partner at Quattro. “As Ditech’s agency partner, Quattro has helped Rich and his marketing team forge a rock-solid national brand and become a true market leader in only two years’ time — an incredible accomplishment. It could not have happened without Rich’s brand vision and deep understanding of the consumer lending marketplace.”
Quattro’s nomination credits Ditech’s marketing efforts, led by Smith, with making it the fifth-largest non-bank home loan originator in the nation.
It helped that rebranding reintroduced the “pop culture brand” Ditech that Smith says Americans recognized from pre-mortgage crisis “Lost another loan to Ditech” commercials and NBC’s “Saturday Night Live.”
“The overall brand awareness wasn’t very high, but favorability amongst people who were aware of it was good,” says Smith. “There wasn’t really a lot of negative sentiment around the brand, unlike some other large financial brands that had really taken a beating though the financial crisis. The Ditech brand had been retired just prior to the financial crisis, so it didn’t have a lot of those negatives.”
From late 2013 to May of 2015, American consumers’ familiarity with the Ditech brand increased from 30 to 48 percent, Quattro reports; positive opinion of the brand (among those familiar) increased from 63 to 80 percent; and likelihood to consider the brand as a mortgage provider increased from 33 to 55 percent.
Within 12 months, Ditech went from no consumer lending ranking to No. 15, and reached No. 11 in correspondent lending in 18 months, Quattro says. (Correspondent lenders underwrite loans then sell them to a secondary market.)
The Gramercy Institute decided the re-launch was so successful, it earned Smith the 2015 Gramercy Strategy Award in the consumer lending category. But it wasn’t the final honor Smith would receive this year — he’s also the winner of the 2015 Benjamin Franklin Award from the Philadelphia Direct Marketing Association and, ahem, Target Marketer of the Year.
Makes Marketing Sound Easy
“Marketing is ... ” Smith says, “ ... this is going to sound a little bit funny, but it’s not that hard. It really comes down to finding out — identifying — what customers want, and what they need, and supplying it to them.”
Maybe the art and science of marketing is a bit easier for an economics-trained CMO. Smith says economics taught him a way of thinking — applying principles of opportunity cost, marginal revenue and marginal cost, for instance — to apply “hard data” to problem evaluation, while using a scientific decision-making framework. That’s especially important in a business where consumers only want the benefit of what Ditech offers — home ownership — and not the monthly mortgage bill.
“It’s up to you,” he says, “to think through what’s possible and come up with solutions that a customer might not have even known that they needed to a problem that they know that they have.”
The AIG Years
While Smith says he would never want to repeat the experience of helping lead a financial services brand through a financial crisis, he does value what he learned at AIG.
Beginning work there in June 2000 as a retail marketing director, he rose to SVP and CMO of AIG Bank in January 2006.
“AIG is made up of lots of different legal entities,” he explains. “The bank was not the source of the problem within AIG, it was a different business unit. But all of AIG was really tarred with the same brush, fairly or unfairly.
“Overnight during the financial crisis, we were faced with the complete breakup of our business,” he recalls. “Depositors were leaving AIG. There was the point where I wasn’t certain that anybody anywhere in America would put even a single dollar into an entity named ‘AIG.’ We really had to transform our business just to remain solvent.”
Gone were the affiliates AIG Bank relied upon to distribute its products, so he says the bank had to convert to a direct distributor. The crisis allowed him to experiment as a marketer and to focus on the short-term.
“We became an online bank,” he says. “Within 30 days, we launched our first online banking website. Not only were we able to remain in business — that was certainly a big risk at the time — we completely transformed the business.”
The tactic worked.
“We were out of the financial difficulties within a period of about 18 months and went on to have a successful organization,” Smith believes. “I was part of re-launching the AIG brand worldwide. … It’s definitely gratifying to see how it’s come back today and it’s kind of a large, global, gaining-respect financial brand.”
Then a funny thing happened.
“There were times during the financial crisis where, pre-crisis, I remember our problem had always been brand awareness,” Smith recalls. “Nobody knew who we were. ... Then the financial crisis happened, and all of a sudden, overnight, our brand awareness was like 97 percent. It was off the charts.
“You would never want to go through what we went through to get there, but that’s actually become an asset now,” he continues.
The AIG experience emphasizes one of Smith’s favorite sayings: Marketers can’t fail their way out of bad situations. That’s why he told his team to do the best they could.
Quattro’s figures reveal that Smith’s approach worked.
“He increased the company’s loan portfolio 10 percent and retail deposits 150 percent,” Quattro says of AIG Bank.