Compliant Segmentation for Mortgage Marketers
Market segmentation is a cornerstone of marketing but in the mortgage industry it can be a maze of potential compliance violations.
Marketing in the mortgage industry requires something of a recalibration for marketing personnel. In almost every other industry good marketing begins with finding out exactly who your ideal target customer is: how old they are, what nationality and race, how much income they generate, what their political affiliation are, and other variable can be very helpful metrics in the effort to make sure your marketing impressions are as impactful as possible.
However, if your mortgage origination operation is segmenting your market and delivering or not delivering marketing messages based on any of these factors then you are looking at a potential compliance violation.
And because detailed market segmentation is so core to marketing ideology, you should use great caution in selecting marketing or advertising vendors. Many digital advertising tools are delivered based on complicated algorithms that take into account some of these noncompliant segmentation factors. If a marketing vendor cannot explain exactly how its algorithm works and what datapoints it utilizes, it would probably be best to avoid working with them.
This creates some challenges for mortgage marketers. Without any segmentation your cost-per-conversion will skyrocket. Luckily there are still some ways to divide up your audience and deliver relevant information in a compliant manor.
Behavioral and psychographic segmentation are usable in your marketing provided there is no disparate impact to any group occurring as a peripheral result of these targeting methods.
Behavioral segmentation refers to grouping consumers based on their attitudes toward your product or brand, their use of your product, their knowledge of your products, and their purchasing tendencies. Because these categories do not necessarily indicate any specific age range, income level, nationality or any other risky metrics, they will not entail any violations
Psychographic segmentation refers to grouping consumers on the basis of their beliefs, values, lifestyles, opinions, etc. Digital marketing tools are becoming adept at identifying segments in this way. You might be able to target only local NFL fans with a specific advertisement that uses in the launch of the new football season as an indicator of a coming real estate market downturn and advise them to take steps to get their house ready for sale come spring. Football related content might help this target audience engage with the advertisement more than if their own interests were not mentioned in the ad.
Maybe through your marketing research, you find that an inordinate number of your clients enjoy bird watching and hate crowded places, you could send out digital advertisements to IP addresses within your geographical footprint that have a high probability of fitting this profile. There is no community of people or minority group that is inherently excluded with this targeting method so you will have found an efficient way to get your brand in front of the exact consumers with whom your brand resonates most.
So, you can divide your audience up into groups or personas in order to better tailor your marketing messages, but you should be very careful about how you do so, and you should also take great care in selecting marketing partners, as this kind of thinking is not the norm in the world of professional marketing.
SCA is here if you would like a to schedule consultation to determine the effectiveness and compliance of your mortgage marketing program. For a free consultation, contact Bill Dolan, Director at (617) 694-2617 or wdolan@scapartnering.com
