The digital world is ripe with marketing opportunity, affording brokers the ability to scale their business faster than through referrals. But where should they begin at a time when consumer trust is low? The Adviser finds out more.
Despite the scrutiny brokers faced this year through the Hayne royal commission and other regulatory inquiries, there is a silver lining: the declining trust in financial institutions means customers need the guidance of mortgage brokers more than ever, especially as lenders toughen expense and income verification processes, hike interest rates out of cycle, slow residential lending and introduce other potential surprises for borrowers.
But where and how should brokers engage with these sceptical consumers?
Sabri Suby, founder and head of growth at digital marketing agency King Kong, admits that a broker will “never get a hotter lead than what [they] get through referrals”, saying that “it’s a completely different type of prospect”.
However, it’s also an “unpredictable way to grow a business”, the founder says.
“What we see with a lot of brokers is that they get to a stage where they’ve run dry of referrals. Then they look at how they [can] create a system where leads [are] coming to them,” Mr Suby adds.
The marketing specialist suggests utilising platforms like Facebook, claiming that it is “the absolute best place by far to do lead generation” for brokers with high growth ambitions. At present, there are around 17 million Australians using the social network, meaning brokers could build up a waiting list of customers.
“Up until the advent of Facebook ads, there wasn’t any good way for local brokers to really generate leads. If you were doing a Google search for ‘mortgage brokers in Melbourne’ or ‘home loans in Melbourne’, the [businesses] coming up on [the first page] are the huge banks and massive conglomerate finance companies. That doesn’t make it easy for new brokers to get their foot in the door,” Mr Suby says.
“Whereas Facebook is like a lever that you can pull down and get as many leads as you want, depending on your budget... There’s a whole bunch of laser-targeted criteria that you can [use] to [target] people.”
He notes, however, that it’s important to keep in mind two things: Facebook is primarily used for socialising and entertainment, and it is saturated with content from countless businesses competing for consumers’ attention.
As such, the key to making the most of Facebook as a lead generation platform is by providing value to prospective customers up front “with no strings attached” before attempting to sell anything.
For example, rather than pushing out a blatant sales message, like a specific home loan rate that can be negotiated, Mr Suby suggests that brokers provide a “high-value content offer”, such as a free report that answers a specific “hair on fire question that’s keeping the market up at night”.
“If someone’s already got a mortgage with a big bank, they typically want to know if they’re on the best rate. These people might have been [with the bank] for five, 10 years, and they haven’t done a comparison to see [what] their rate could be, so they don’t know what the pit balls are,” the founder says.
“So, instead of going with a sales message, you might say something like: ‘Free report reveals the six fatal traps about your mortgage that you don’t know about. Find out more here’.”
The idea is to direct the customer to a page on the broker’s website that prompts them to provide their name and email address to download the free report or have it sent to their inbox, Mr Suby explains.
He adds that the broker should then get in touch with the prospective customer via email and present an “irresistible” offer.
The follow-up email could say something along the lines of: “If you found this report helpful, I would love to sit down with you and give you a free home loan health check. I’ll run through all the hidden traps in your mortgage and provide a detailed road map of everything you need to know and do to leave you in a better position.”
While marketing investments vary depending on the business’ position, Mr Suby recommends that a broker spend at least the value of an average customer (e.g. $2,000) on lead generation per month, including on split testing different messages and designs to see what resonates best.
He notes that a Facebook lead will probably cost brokers between $6 and $100 depending on the offer and target market, but he points out that not every lead is going to convert into a customer immediately or at all.
However, brokers will be able acquire three or four times the volume of clients by adopting this approach than they would by pushing out overt sales messages or relying solely on referrals, according to Mr Suby.
“As long as you’re making more money than what you’ve put in, then you’ve won. If you’re putting $1 into the advertising machine and you’re getting $2 of net profit back out, then your business becomes really scalable,” the founder says.
5 Common Marketing Mistakes
There are five common marketing mistakes businesses make that can impede growth, Deena Janes, managing director of marketing agency Your Client Matters, told delegates at The Adviser’s Business Accelerator Program.
Tip: Tell Stories
Brokers should leverage storytelling in their marketing efforts, says Ray Bowring, marketing consultant at Mortgage Broker Solutions, because the human brain is programmed to process information through storytelling.
Speaking at The Adviser’s Business Accelerator Program earlier this year, Mr Bowring said: “Human beings love stories. We take in stories before we take in
statistics. The reason for that is when you are listening to a story, both sides of your brain are engaged, whereas often it’s just one side [when you’re taking in] numbers.”
Brokers could tell stories about how they started their business, how they helped happy customers, as well as share achievements such as winning awards, the marketing consultant suggested.
“We all have so many stories we can tell; it’s just remembering to share them and make them work for you,” Mr Bowring said.
Tas Bindi is the features editor for The Adviser magazine. She writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.
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