How Not to Find Loans w/Email Campaigns
Ok, admit it--at some point in the past 2-3 years, you had the bright idea of using emails to search for loan prospects, right? Or maybe that “marketing” person, who you never really understood what their job was, asked you for a list of your contacts so they could blast out messages regularly, and get more attention by strutting into 12,000 email addresses every week. How’s that working out for you?
Email marketing is free(!) and can be effective, but in reality, it’s not free and there’s a lot of art to the practice, which is constantly changing. Realistically, it can easily do more harm representing you than good if misused, which based on my mail box, is fairly often in the small business lending arena.
Yes, I get my share of emails from the community I write to, particularly one Southeast bank who have me on lists with about 10 different lenders, most of whom I’ve never met. I’m guessing a few dozen lending companies have “scraped” my email address from my newsletter or website, and now inform me regularly either how easy it would be for me to get a loan, or that a loan just closed for someone else. (“Scraping” is the term for manually acquiring information from sources without necessarily getting consent to use it for contacting someone.)
Most of these emails would be pretty good if I were desperate for a loan and didn’t know anyone in the lending business. For very qualified business owners or prospective business referral sources, they can be cheap, petty, or downright irritating several times monthly.
For the remainder of this article, I’m going to offer some advice actually on what not to do, by sharing a genuine email I received this week from a peer of yours that includes several mistakes, and can serve as a guideline of poor practices in email marketing. Next week, I’ll return with some best practices as to how you can develop a more thoughtful, effective email campaign to support your efforts to develop more business.
The subject letter is broken out into segments below in bold with parentheses to segregate it from my commentary in italics on its mistakes.
“Charles H.,”
Ok, so this email is coming directly from a LinkedIn connection who didn’t have time to edit out the ridiculous look of using my middle initial in the salutatory introduction, as is common when downloading in bulk from LinkedIn. How personal!
“hope all is well. Wanted to give you some background information on [Company name]. Let’s set up a time to catch-up. Have a great 4th of July weekend and let’s talk soon.”
This letter gets right to the point of what the writer wants, and demonstrates that have no interest in me or what I want. The pseudo ‘personal’ touch--“Let’s set a time to catch-up…” borders on insulting, since we’ve never actually met. Nothing to catch up on, right? That smirk is then doubled with “let’s talk soon,” as if this person is actually going to call or set an appointment--which is apparent they are not.
“Overview of [Company name]:
Enclosed below you will find a brief overview of [Company name] that highlights our 2nd lien term loan product and attached you will find a PPT that provides additional information. I would also encourage you and your colleagues to read this ABL Advisor article: https://www.abladvisor.com/etc,,, - as it speaks to our unique ability to work with senior lenders as our entire practice is focused on financing the risk that senior lenders are not comfortable financing. This includes stretch pieces to on-board and retain clients when extra capital is needed as well as exit financing to help them leave when needed. The real point of difference is being able to write small checks (under $3 mm) that are of course subordinated and being able do this quickly and professionally. We are trying to build an institutional product and national brand.”
How many errors can you make in one paragraph?
“Enclosed” I searched my envelope and couldn’t find….wait, this is email! There is no envelope, therefore no “enclosure.”
“Attached you will find…” If the spam filter on my mailbox didn’t stop and delete this message, I surely am smart enough not to open an attachment from someone I don’t know, particularly something promising to contain only self-aggrandizing content I’ve not been led to be the least bit interested in yet.
I’ll leave it to you to recognize grammatical errors and remainder of poorly worded sentences that continue and includes such (un)familiar industry slang as “stretch pieces.”
Finale: “We are trying to build…national brand.” As an anonymous recipient, ‘Why do I care?’
“[Company name], is a committed debt fund focused on filling the credit void in the lower middle market (senior and subordinated term loans between $500k and $3 mm with fully amortizing terms between 12-and-36 months). We provide senior debt, however, our mission is to become the market leader in lower middle market 2nd lien cash flow loans. 2nd lien debt is an alternative to traditional mezzanine as our loans are secured and fully amortize, but are shorter in duration, covenant free and do not require equity. We typically finance companies that generate less than $8 mm of EBITDA that are unable to access mezzanine capital, require less than $3 mm in capital or have shorter-term capital needs.”
Ok, at least now we can focus on basic grammatical style: the number of features and benefits in this paragraph would be better presented in a bulleted list, instead of in prose.
“We provide senior debt…” Why explain this fact when you’re emailing me to sell 2nd lien, subordinated debt? It serves to tell me that you are a competitor, maybe just trying to be introduced to my relationships through the 2nd lien….
Too many details trying to explain who/what they’re looking for…if I were wild-eyed enough to want a short term second lien lender behind my shaky first lien position, I’d be calling right away. The jigsaw puzzle description of the who-what they want just serves to slow down that call.
“Please click on this link: https://www.company-site-document for a PPT that provides an overview of the cash flow lending division and also highlights our unique 2nd lien debt product, which often times acts as a stretch piece behind ABLs, among other things”
Admitting failure--that you aren’t going to open the attachment--writer appeals to you to download it instead. It’s not likely to happen, and as a closing paragraph, I don’t think the final two lines are going to win any business.
I’ll bet I’m only 1/2,000 who actually read the entire message, and that a majority of others who did actually knew the writer. For me, it was just having to see how this train wreck ended.
At least the sender’s name, title and contact information were clear and complete at the footer--and mercifully deleted, bless his heart.
Watch for my article next week to provide a better way to convey this same message.
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Executive Director of Lender Development
8 年Charles, very good article!