Launching or expanding a mortgage advice business necessitates minimising uncertainties to maximise the probability of success.
August 20, 2024
In an environment where political, economic, social, technological, legal, and environmental factors complicate forecasting, one certainty should be firmly established from the outset: the business’s target audience.
A common refrain among mortgage advisers is, “How do I get more leads?” This question often overlooks the critical importance of identifying a target audience. It suggests a transactional mindset, focusing on customer acquisition rather than fostering a client-centric, service-oriented relationship.
A more strategic approach involves asking, “How can we help 27-35-year-old working professionals understand how they can get on the property ladder?” This shift underscores the necessity of specificity in defining the target audience as part of the broader marketing strategy.
These two queries drive markedly different marketing tactics. The former implies a scattergun approach, while the latter enables precise, targeted messaging through carefully selected media channels. Historically, targeted marketing communications have proven far more effective in optimising resources and enhancing return on investment.
Effective leaders excel at asking the right questions when making decisions. A robust list of pertinent questions can sharpen strategic focus, guiding the brain toward factors that positively influence business performance. For advisers aiming to start or grow a mortgage advice business, the following considerations are crucial when defining the target audience:
1. Audience Identification: Who constitutes the audience for the services? What segments exist within this audience, and what are their specific needs?
2. Profitability and Capability: Which segments can the business profitably satisfy to a high standard, considering location, knowledge, capability, budget, resources, and skill set?
3. Market Segmentation and Strategy: Which market segment(s) will the business target? How will the business shape its strategy—encompassing product, price, promotion, people, processes, physical evidence, and place—to meet the target audience’s needs, deliver customer value, and distinguish itself from competitors and substitutes?
4. Capability Development: What capabilities must be acquired to serve this audience effectively, such as regulatory knowledge, digital proficiency, technology, professional development, and human resources?
5. Media and Messaging: Which media channels does the target audience use, and what messaging will resonate with them?
6. Introducers and Budgeting: Which introducers or affiliates could help promote the services to the target audience? What budget is required to effectively target the chosen segments?
Many mortgage and insurance intermediaries struggle with defining a target audience. There is a prevalent belief that focusing on one or two segments will alienate broader audiences, leading to an ineffective strategy that essentially targets no one.
The critical question here is, “Does the company have the capability and budget to create messaging that will resonate with every single person in the country?” Realistically, the answer is often no. Therefore, it is vital to select a specific target audience that the business can effectively communicate with and serve.
Targeted marketing is fundamental to success. Attempting to target everyone equates to targeting no one. Adopting a market-oriented approach, starting with the audience, must permeate the entire organisation. This philosophy should not be confined to a document in a desk drawer but must be embedded in the very foundations of the business. Business leaders must champion and integrate this approach to ensure sustained growth and success in the mortgage advice industry.
By focusing on these strategic elements, mortgage advice businesses can navigate the complexities of their environment, optimise their marketing efforts, and achieve their goals more effectively.
Martin O'Callaghan is Head of Marketing at HL Partnership