Target Marketer of the Year: Rich Smith
Now Rich Smith is the old guy in the suit.
A quarter-century ago, Smith was an intern standing in front of a group of MBNA executives, challenged to tell them how to market to college students like him. Fast-forward to present day, and the 2015 Target Marketer of the Year is CMO of Ditech Financial in Fort Washington, Pa. The entity nominating him credits Smith with leading the successful rebranding of Ditech post-mortgage crisis, and presiding over direct marketing campaigns that brought the mortgage lender from zero loans in its 2013 relaunch to nearly $19 billion in 2014.
Still, Smith, who joined Ditech in April 2013, thinks back to the “fun challenge” at MBNA that got him addicted to the direct marketing that earned him this year’s honor. Then a junior majoring in economics at Pennsylvania State University, he wasn’t yet planning on spending a career giving back to the marketing profession and creating an exemplary record that would earn him this award. However now, his nomination from Berwyn, Pa.-based ad agency Quattro Direct stands out from an exemplary field of marketers nominated by Target Marketing readers and contributors, then evaluated by magazine editors — perhaps even more than how the 20-year-old Smith stood out in an executive conference room filled with “old people in suits.”
Then, as he does now for Ditech, Smith spent time poring over MBNA’s data and understanding business operations before suggesting a marketing plan.
“I enjoyed all the aspects about putting that project together,” Smith says of the MBNA internship challenge. “That was really my absolute first introduction to what marketing was all about. I think I was hooked.”
Since then, he’s accepted challenge after professional challenge in financial service marketing, including working to bolster marketing efforts as SVP and CMO at the beleaguered AIG Bank brand all the way through the banking crisis and out of the Great Recession. Then he joined Ditech as the second member of its marketing team and worked to rebuild the brand from scratch.
“I should be tired and ready to go to sleep, right?” Smith jokes. “Some days I feel like that. I really do enjoy working with big brands and big challenges. I think it was one of the things that always drew me to marketing.”
“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.
The Early Years
Smith says the financial services marketer that got him started in the profession still holds a spot in his heart.
“I think that I was very fortunate to start my career at a place like MBNA America, which was a credit card company, [and] is now the credit card division of Bank of America,” Smith says. “MBNA, at the time in the 1990s and the credit card industry, was definitely one of the thought leaders in direct marketing, particularly direct marketing financial services. It was largely the birthplace of affinity marketing in financial services and credit cards. [MBNA had] a lot of really amazing, creative work and quantitative work in direct mail, and in the area of financial services.”
So after his internship, Smith graduated from Penn State in 1991 and began working for MBNA in June 1991. By August 1995 he’d gained management experience, and from September 1995 to November 1998, he served as MBNA’s First VP of Product Development. “I would say that the end-to-end organizational, absolute, 100-percent dedication to top-notch customer service that company lived and breathed was extraordinarily unique,” he says.
Yet he left MBNA. While he was earning his mid-career MBA at the University of Delaware, he worked from November 1998 to June 2000 as First VP of Balance Build at First USA/Bank One’s Chase Card Services. Then came AIG.
Still, MBNA’s customer-centricity stuck with him.
“I tried to bring that mindset and bits of that culture to every place that I’ve worked since,” Smith says. “At the end of the day, that’s really the key. If we’re not efficiently, fairly and exceptionally serving our customers, they’re not going to continue to pay us to do what we do. Someone else is going to come along and do it better.”
He believes it’s important that every employee in an organization have that mindset, too. “Marketing is everyone’s job,” Smith says, “and the impression that you leave on someone who might be just stopping by the office to drop off a package could lead to a positive customer impression and perhaps a future consumer of your services.”
Giving Back to Marketing
Smith’s a member of the B-to-C branch of the North America Advisory Board for the CMO Council. He also serves on the Governing Body of the CMO Collective, and he frequently speaks at industry events and conferences.
“As I grow in my career, I enjoy spreading knowledge about how marketing works and what’s important about marketing,” Smith says. “We’re not necessarily saving the world. But again, in my biased view of the world, I think marketing actually provides a lot of benefits to economies, societies, to organizations.”
Rebranding continues as 2 million customers learn about their new mortgage servicer, Ditech. On Aug. 31, Saint Paul, Minn.-based Green Tree Servicing merged with Ditech under the Ditech brand.
“Ditech has always been a mortgage originator, meaning we lend new loans, but we don’t service the loans,” Smith says. “So Ditech, for the first time, will be both an originator and a servicer.”
As an end-to-end service provider, he says Ditech will disrupt the mortgage industry with its customer experience.
“We’re in the midst of an onboarding campaign for the Green Tree customers to welcome them to Ditech,” Smith says. “Mainly consisting of direct mail, statement inserts, email, website. ... We’re going to do some special ‘Welcome to Ditech’ campaigns involving a sweepstakes and a few other fun things ... Longer-term, our plan is to completely re-engineer the new customer onboarding process.”
The onboarding process displays Ditech’s multichannel capabilities, but Smith says the brand does have a couple go-to channels for its other programs.
“I’d say that … all of our customer loyalty and retention programs benefit from direct mail the most,” he says. “I’d say [for] new customer acquisition right now, digital marketing channels are our workhorse.”
For Smith “digital” means “mostly search, industry sites, rate tables, LendingTree. It’s a wide range of lead sources.” Content marketing on Facebook, Twitter, LinkedIn and Google+ even weigh into Ditech’s marketing mix.
That’s a lot to learn in 25 years. But it means during that time, he had the opportunity cost of not achieving his goal to become a professional surfer, as he states on his Twitter profile.
Still, Smith ponders how a 20-year-old intern, as he was at MBNA, would see him now. “Hopefully, [I’m] the coolest old guy in a suit that they’ve ever seen,” he jokes.