The property market’s long-held norms are transforming with a new generation of home-buyers breaking into the market. Disruption to the process is shifting how marketers can win over millennials, with new technology and buying behaviours at the forefront.
Millennials are about to become the most important consumer segment the world has ever seen.
This is particularly true for the finance sector, with millennials projected to represent over half of the mortgage market by 2026 - with the millennial mortgage balance forecast to increase from $621bn to $1.3 trillion[1].
Clearly growth in this sector is going to be driven by this generation. However, the jury is out on whether current marketing efforts are meeting the behaviour, demands and expectations they have.
“Research shows that millennials look to build trust and gather information from multiple digital sources. They expect open communication and value flexible solutions that suit their changing needs,” says Alex Boorman, Managing Director, Consulting, at RFi Group.
One in three Australian Millennials surveyed by ING think it would take them more than a decade to save for a deposit, whilst 69 per cent of Millennial homeowners said it took them under five years to get onto the property ladder.[1] The consumer journey is long, so it's crucial to engage along the way, and in particular, be front of digital mind.
For example, when it comes to home buying, 34% of Australians aged 18-34 surveyed said mobile plays a role in the application process[2]. Just over half (55%) said they would prefer to open a mortgage online.
These differences in customer mindset, and as we will see a marked change in the customer journey to a more mobile-enabled path, are a great opportunity to win and retain millennial customers.
But, to get breakthrough, marketers need to step away from traditional tactics and tap into the millennial mindset and reset how they approach the whole marketing funnel. As you start optimising your strategies and plans for 2020 here are four key areas you can address to augment your customer strategies.
Be more than just another mortgage offer
Millennials interact with and discover bdifferently to Gen X and Baby Boomers, who would traditionally view these transactions as being enabled by face to face interactions.
Around 42% of Australian millennial mortgage customers use the Facebook family of apps and services to discover and evaluate mortgages[1]. So how can marketers take advantage of this to drive brand consideration, not just lead generation?
One method is to deliver consistent, engaging, relevant and useful content that builds not just awareness, but a stronger connection with millennials.
For the millennial home buyer, it’s more than just a mortgage, it’s part of a journey in building their dream home. While lead generation and tools are useful, meaningful storytelling forges long-lasting impact.
This approach of building an emotional connection with its target generation was taken by Brighthouse Financial, which wanted to win the hearts and minds of customers for its life insurance and annuity products.
They created videos showing kids giving advice to their grandparents on where they should retire to, followed by serving people who had seen the ad hand-drawn pictures from the children
of those places, creating an emotional response in the target market. The result was an overall 10 point lift in brand awareness and 22 point lift in its target market.
Make the experience seamless when it comes to research
When researching mortgages, millennials tend to shop around and compare. Millennials consider 4.4 lenders vs other generations which consider 2.5 on average.[1] To make content that connects it’s important to understand what this cohort are looking for. Research shows they want content around making life easier (21%), helping achieve goals (21%), inspiring stories (18%) and new product launches (18%).[2]
According to RFi’s Alex Boorman: “Interactive tools are a great aid in immersing customers during the evaluation process, and 51% of millennials used an online tool or calculator to understand how much they could borrow[3]. Making these assets easily accessible is a great way to connect with customers efficiently.”
Mortgage provider Lendi did just this by removing the friction for prospective customers wanting to use its mortgage calculator tool. Rather than running an ad for the tool and then asking people to click through to a website which would take a few seconds to load, Lendi embedded the calculator in the platform using the Facebook Playables ad format.
This resulted in a 20% increase in incremental leads and a 7.8 point lift in brand awareness.
Let customers convert where they like and offer frictionless onboarding
Millennials expect a seamless and transparent application experience. According to research by RFi’s recent research, those who took out a loan in the last three years said the speed of the application process, ease of obtaining pre-approval, and updates on the status were the key pain points[1].
A simple way to improve the application process is to allow people to contact you in a fast and frictionless manner, in person, over the phone or through messaging apps - the method they prefer to use.
Mobile, unlike other channels, can be both the medium and the gateway to the product. Facebook’s Store Traffic Objective ads enable customers to find the nearest branch, whilst Call-to-Action ads with a "call now" button allows them to phone your customer service. And with 88% of millennials comfortable having interactions over a messaging app[2], lenders can automate the lead generation process through Messenger ads.
Learn how customers want to engage with you to improve retention
“Gone are the days of people keeping their mortgages with the same provider for life out of habit. Now marketers need to work after the contracts have been signed to ensure millennial customers are engaged and loyal to your brand,” says RFi’s Alex Boorman.
Millennials value personalisation. Nearly three-quarters (72%) of millennial retail banking shoppers are willing to share any form of data in order to receive a personalised experience[3].
This personalisation drives loyalty, with over half of the respondents to a KPMG study saying they would feel greater loyalty towards brands that know who they are and treat them differently.[4]
By using your CRM data to segment and target existing customers, you can then use channels like Facebook to augment existing retention strategies and communicate with people where they are already spending time.
As we enter an ever more competitive environment for financial brands it’s important for marketers to drill into the market segments which are going to give them the most opportunity, and start connecting with those consumers in meaningful ways.
I predict it’s the brands which adapt their methods to a more millennial mindset which will be the biggest winners over the next decade.
I predict it’s the brands which adapt their methods to a more millennial mindset which will be the biggest winners over the next decade.
Download the guide on “How to Connect with the Millennial Home Buyer” from Facebook here.
Sources:
(1,5,7,8) RFI Group Data, Sep 2019
(2) "First Home Dreams Now A Reality for Young Aussies" by ING, Oct 2019
(3,4,6,9,10) “Retail Banking Consumer Journey Study” by Accenture (Facebook-commissioned online study of 1,001 respondents, ages 18+, Australia, Feb 2019)
(11) “Building customer loyalty in banking”, KPMG, Nov 2018
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