The marketing of home equity loans and lines of credit is no longer a spring and fall affair.
Rather, banks are increasingly running their marketing campaigns beyond the traditional seasons for home equity lending, say banking professionals and consultants.
The change highlights the increasing competition for home equity loans and the shifting uses of second mortgages by borrowers.
"Seasonality is blurring," said James D. Monteleone, president, Leadsource Inc., a Pittsburgh marketing consultancy. "It is becoming less of an issue."
What that means for banks are longer - and more expensive - marketing campaigns.
Mr. Monteleone explained that borrowers are no longer looking for cash only during the spring, when home improvements are taken on, and in the fall, when school tuition bills put a strain on family budgets. That also has a lot to do with the new ways borrowers are using the loans, he said.
"I don't think it is to be strictly interpreted as a loan for home improvement anymore," added Linda Waldman, president of Waldman & Associates, a Chicago advertising and marketing firm.
Home equity lending continues to be an aggressively marketed product, said Patrick H. Seroka, president, Seroka & Associates, Brookfield, Wis.
"It is one of the most competitive things out there in the banking industry," he said. "Today, I see it as one of the two or three most competitive products in financial services."
He said most banks look at home equity loans as a first step to cross- selling other products.
One of the banks that is spreading its marketing campaign beyond the spring and fall seasons is Firstar Bank of Minnesota, based in Minneapolis, to spread out.
Donna M. Conners, the bank's marketing director, said that although marketing campaigns go beyond the hot seasons, special offers are still promoted in the spring and fall. "That is when financial institutions put their ad dollars to work," she said.
"Banks in general have really emphasized the home equity product more and more over the last five years," she said. "I don't think that the dollar amount being spent is any more. I think the specials are getting more attention."
Mr. Seroka warned that banks do not look at the marketing of home equity lending from the correct standpoint. He said banks are more interesting in maintaining market share, or "defending their turf," than in selling new ways to use home equity loans.
Banks are using direct mail marketing of home equity loans effectively, said Leadsource's Mr. Monteleone. He said the better spreads in home equity lending make direct mail an even more natural fit for direct mail than it is for credit card lending.
"It makes a great deal of sense to" use direct mail, he said.
Ms. Waldman, the Chicago advertising and marketing executive, said that home equity marketing is moving away from mass market advertising and towards methods that allow for direct communication with customers.