Forty years ago, the streets still echoed to the growls of Triumphs, Vincents and Nortons ‘ the epitome of motorcycle high-tech and glamour. Yes, the vibration from their engines turned the riders knuckles white, and yes, many bikes handled like bad-tempered rhinos, but people put up with it. Why? Simply because in those days British customers were offered nothing better.
Over in Japan, designers were talking to bikers about what they wanted and manufacturers bent their skills to satisfying customer needs. Suddenly British buyers could choose smooth running machines that handled beautifully and did not dump engine oil on the tarmac. Within a decade, mainstream British bike manufacturing was dead.
The point is this: ignore the customer-focused principles of marketing and you could end up a Norton ‘ not forgotten, but certainly a thing of the past. Become truly marketing-orientated, and you get to be a Honda or Suzuki. It should be clear to most finance professionals which way they should go.
Some people still believe marketing is just another word for selling, but in fact it is a much wider concept of which good salesmanship is just one of several important components. There are as many definitions as there are textbooks, but for the purposes of the mortgage adviser, marketing is the process by which the group or groups who make up the target market are clearly identified. To be successful, the true needs of each of those groups need to be identified.
To do this an adviser needs to be in a position where they can answer those needs by sourcing packages of products and services that are better than those of competitors.
By showing clients their needs are understood, it is possible to build fruitful, long-term relationships, but these basic points need to be revisited on a regular basis to stay on top of shifts in market conditions. If these principles are adhered to then price wars can be avoided, ensuring there is sufficient ongoing profit to plough back into future growth.
So, how are these principles put into practice? As a master broker, the key market is other mortgage advisers, but what are their needs? They want mortgages that allow them to act as problem solvers for their own clients ‘ the only way they will continue to flourish in these increasingly competitive and regulated times.
‘The first marketing base is to check you have a solid core of products that solve real end-user problems,’ says David Copland, sales and marketing director of Pink Home Loans. ‘True flexible products, true self-certification, investment mortgages, credit repair ‘ all wrapped with great service.’
Another way to get ahead is to speak to a lender’s key account manager about setting up a deal to offer exclusive mortgage products and thereby gaining a marketing advantage. Provided the demands of a broker make commercial sense to the lender, they should oblige.
Once the best problem-solving products are available to a master broker the next thing to do is to make sure the market knows they are available. Any special benefits need to be flagged up strongly on rate sheets and the message needs to be pushed in newsletters, through advertising or editorials (a mortgage provider should be able to supply this material free of charge). Lenders should also have top-quality marketing resources to help get joint messages through to the target audience on a regular basis. Even something as simple as a change in criteria is a good reason to get in touch and remind customers of all the good things on offer.
If a lender is particularly helpful, then they may be open to discussing a pooling of resources. Richard Stokes, head of product development at TMO, says: ‘Joint roadshows, group presentations and even joint hospitality events like golf days and go-karting are very productive ‘ and all the more so if the lender’s account manager is prepared to work together on joint branded support literature.’
For an independent mortgage adviser the situation is slightly different. The recent downturn in the fortunes of endowments and other savings products combined with the housing boom, has made mortgages a far more significant income generator for independent advisers than they once were. Marketing the firm as a home loan problem solver should therefore be a prime objective.
The target audience
In defining the target market, it should not be so broad as to just say ‘anyone who needs a mortgage.’ It is a fair bet that many clients will be non-standard applicants in some way. Perhaps they are self-employed, have multiple sources of income or an irregular income, or have had credit difficulties in the past ‘ problems that mainstream lenders may shy away from. If this group provides 80% of the firm’s income, it makes sense to focus the marketing activity on them.
Marketing to these people means being ready with any kind of mortgage solution, including flexible products, investment and credit repair, with true self-certification (not the kind that promises true self-certification yet still demand bank statements or an accountant’s letter of serviceability) and also individual underwriting.
When communicating this message, keep in mind the oldest marketing maxim of them all: people do not buy products, they buy benefits. Whether putting together a mailing letter or press advertisement, think what the reader wants to hear and get that up-front. For example, a product-based headline would be: ‘Flexible mortgages available;’ whereas a benefits-based version could be something like: ‘Pay off your mortgage early and save thousands.’ The latter route will obviously receive a better response.
Contact the local business manager of a switched-on lender and they should be able to give strong benefit-led advertisements and literature ready for use in mailings or across the desk. All these items will have been compliance-checked for consumer use and, in many cases, everything will be free too.
The starting point for any communication will be the existing client base. How many have had the same mortgage for say, five years? It is probably time to contact them with the latest flexible story. Again a lender’s business manager should be offering lots of ideas like these, and may even offer written letters ready to sign and mail. Do not forget to ask about special Post Office rates for bulk mailings.
This can be a good investment and a cost-effective way of hitting the target audience. Contact the publishers of local newspapers and ask them for a media pack. This should contain everything there is to know about the people who read those papers. By reading these papers it should become apparent if there is any other financial adviser-type advertising. If it appears regularly, it is pretty clear the publication is pulling in a good response.
For even tighter targeting ask local publications for a list of forthcoming features. Look for home interest, financial subjects and also local business features (to catch the self-employed). If the price is right, book an advert ‘ remembering the vital ‘benefit-led’ headline rule and the positioning as a problem solver. Imagine, for example, an advert in a feature about new homes with a headline: ‘Refused a mortgage? We could help.’ There are many reasons why people may have been refused by mainstream lenders, from CCJs to less than three years in self-employment, but they will all be attracted to such an advert. Sales will follow because people are being offered a second chance they may not know existed. That is the secret of good marketing.
Another idea is to ring round the local press for last-minute space bargains. Again, if possible use artwork provided by a lender with space for the firm’s name and contact details. Generally speaking, tall thin spaces have bigger impact than flatter, wider ones. When a publication is found to trigger a response, remember that new prospects can come into the market at any time so budget to maintain a steady presence, at least when housing market activity is busiest. As a regular advertiser, it may be possible to get the paper to write a supporting feature article about the business.
As a general rule, advertising in regional editions of national press and magazines will be too costly with high reader wastage. Consider Yellow Pages and similar directories, but remember to use strong benefits-led headlines if the advert is going to stand out. Local radio may be a useful medium provided the station covers the defined market and the price is not prohibitive.
Finally, consider strategic joint marketing links with other organisations like an insurance provider or a local housebuilder. A lender’s business manager may be a good source of contacts in this instance
As demonstrated, there is much more to marketing a business than just selling. Get the mix right, using the help and resources of supportive lenders, and one day soon it will be possible to hop onto a Honda bike and ride off into the sunset to live prosperously ever after.
Lenders may be prepared to pool resources, as it is of benefit to them too.
Adverts need to focus on the benefits, not the products.
Media packs and lists of forthcoming features can help with the timing and placement of adverts.