Every business can thrive, even when the environment they operate in is challenging. There’s little doubt that the current mortgage landscape has its challenges. According to UK Finance, mortgage lending fell to the lowest level since Covid in the first three months of 2023.
However, where there’s challenge, there’s also opportunity. The ongoing cost-of-living crisis is encouraging more households to reconsider how they structure their finances, with more looking at debt consolidation through a remortgage or a second charge. According to Mortgage Broker Tools, in the 30 days up to 4th October, Debt Consolidation accounted for 15.6% of all remortgage cases researched through the platform.
A weakened property market may be bad news for homeowners, but it offers a glimmer of hope for those hopeful homeowners who want to take a first step onto the property ladder. And, of course, the economic environment is driving a larger number of customers whose circumstances fall outside of the criteria of mainstream lenders.
The most up-to-date Pepper Money Specialist Lending Study, which will be published soon, has found that 60% of mortgage customers would find a mortgage broker through online research – the joint top response alongside recommendations from friends and family. Nearly a quarter (23%) said they would be influenced by advertising in their search for a mortgage broker.
For those brokers who proactively seek out new customers, particularly in areas of growing market opportunity, there’s a great chance to build their business and potentially win new customers for life.
However, a broker survey by FSE last year found that the biggest challenge cited by brokers was sales and marketing. So, what steps can you take to market your business to thrive in the current environment?
Getting started
First, it’s important to note that marketing also doesn’t just mean advertising. It’s much broader and may include lots of things you’re already doing on a daily basis:
• Market research – What type of customers are you targeting?
• Product design – What services do you offer?
• Pricing – Do you charge fees, and if so, how much?
• Promotion – How do you raise awareness of your brand and services?
• Distribution – How do you deliver your service to your customers? In person, online or over the phone?
In this article, we are going to focus primarily on promotion.
The first thing to think about is who are your customers. Knowing exactly the type of people you are talking to and what you want to say to them is the most important element of any marketing activity.
At Pepper Money, for example, we segment our target customers into the following groups, and we use these personas to help us more accurately target our product development, marketing and customer communications:
- Hopeful Homeowners
Younger couples in their first home, starting a family, and others who are at an early stage of their career.
- Recent Recoverers
Couples, families and individuals who may have had difficulties with money in the past and could well have County Court Judgements (CCJs), but they have since turned the corner and are on their way back. They’re likely to believe their financial history will stop them getting a mortgage and would benefit from professional mortgage advice.
- Almost Primers
These customers may have stretched their finances in the past but have learnt a lot about managing credit since then and they haven’t had any record of missed payments for a number of years.
- Affluent
These customers may have benefited from significant increases to the value of their property in recent years. They may be exploring the possibility of taking out a second mortgage to finance home improvements, help one of their children get on the property ladder or to purchase a holiday home.
- Comfortable Consolidators
Young or settled families who are living comfortably but may be managing several credit card balances and unsecured loans. By consolidating their debts into one monthly payment, they can get to grips with these additional costs by leveraging the potential of a larger mortgage and higher LTV.
Think about your customers and what segments they might fall into. For each of those segments ask yourself:
• What makes your customers tick?
• Where are they?
• How can you reach them?
• What can you offer them?
• What makes your business different or better?
Ways to promote your business
Once you know what you want to say and who you want to say it to, you have several different channels that you can use to get your message out to potential customers:
- Advertising
- Billboards and outdoor advertising
- Banner display advertising
- Press advertising
- Search engine advertising
- Direct Mail
- Leaflets and door drops
- Social Media
- PR
Before investing in any of this activity though, it’s crucial to ensure your website is up-to-date.Your website is your shop window and, as demonstrated by our Specialist Lending Study, most mortgage customers start their journey by carrying out research online. So, make sure you’re happy that your website sells your business as well as you can.
Compliance
Compliance is an important consideration, and you should ensure that you understand and apply the relevant rules in the Mortgage Conduct of Business sourcebook (MCOB). It’s recommended that you seek professional advice to ensure your promotions are compliant. If you’re a member of a network or mortgage club, they may be able to offer help or guidance.
Here are some general points to consider:
• Is the promotion clear, fair, and not misleading?
• Is the name of your firm and the address of a point of contact included?
• Have you used plain language and is it easily legible?
• Are all statements of fact accurate and can they be substantiated?
• Are any assumptions clearly and prominently disclosed?
• Does the promotion include details of any fees charged?
• Does it include the required health warnings?
Taking your next steps
At Pepper Money, we understand the important role that Marketing plays in helping broker businesses thrive. So, on top of offering lending that supports growing sectors of the market, such as Free Legals on debt consolidation cases and an Affordable Home Ownership proposition for first-time buyers, we have also invested in the development of an online Broker Marketing Hub, which includes more detailed tips and advice, as well as amendable Marketing assets that you can use for your business. These assets target different customer groups with messages designed to appeal to those groups. All you need to do is add your logo.
Take a look at our Broker Marketing Hub and learn more about how you can help your business thrive in the current environment.
https://www.pepper.money/intermediary/broker-marketing-creative-top-tips/
Paul Adams is sales director at Pepper Money
