Marketers Find Their Niche in Real Estate Lending

By Kate Young

Try casting a wide net in the open ocean. If you wait long enough, you’ll probably catch something. Will it be enough to merit the cost of the net, the boat, and the wait time—not to mention the risk? Maybe.

Maybe might also be your best answer to the question of whether you can succeed in mass marketing your real estate loan products. That’s why targeted and niche marketing campaigns are becoming the standard at many banks for real estate lending.

Finding your focus

Craig Rodenberger, marketing director at Ephrata National Bank in Ephrata, Pa., describes an early attempt at marketing the bank’s home equity line of credit product through mass media advertising. “We found that 85 percent of our loan applications were coming from our own customers,” he says. In hindsight, it made sense. Those applicants were people who already knew and trusted Ephrata (and who could take advantage of account-holder discounts). But he thought to himself, ‘Wow. That’s wildly inefficient.’”

So Ephrata shifted its campaign focus to existing bank customers, then narrowed it further by asking how people tend to use HELOCs. With that newly honed focus, some appended data, and an MCIF, Ephrata targeted customers who were likely preparing for home renovations, education expenses, large lifestyle purchases, debt consolidation or refinancing a higher-rate HELOC at another institution

The result? “We were able to cut our bill for advertising in half and increase the volume of approved loans by 20 percent,” Rodenberger says.

Targeting vs. niche marketing

Targeting and niche marketing are terms that are often used interchangeably. But it may help to draw a distinction here. If targeted marketing involves identifying a specific customer segment with a particular set of needs, think of niche marketing as developing a sustained set of specialized resources to serve that segment over the long term.

Ephrata National Bank, for example, successfully targeted customers who are likely to need a HELOC. But on an entirely separate track, the bank provides niche services to the local Plain community, a term that encompasses Amish and Mennonite customers. “We don’t do a lot of targeted marketing for Plain customers,” Rodenberger says. They don’t have appended data, and their borrowing needs tend to center on ag lending. However, Ephrata has invested heavily in staff training and branch facilities that demonstrate the bank’s grasp of the Plain community’s values and traditions.

A target audience doesn’t have to unusual to make a niche program effective.

With its Her Traditions program, York Traditions Bank, in York, Pa. has developed a robust niche offering for professional women. Providing networking and educational opportunities, scholarships, and sponsorships—and maintaining an advisory council—the bank has built a brand around understanding and meeting the needs of professional women. And while Her Traditions is a copyrighted bank-wide program, it’s proven particularly effective on the residential real estate business line.

For a bank like Ephrata, headquartered in the heart of Lancaster County, and surrounded by Plain community farms, location may prove to be the key determiner in finding your ideal niche. But professional women can be found everywhere. How did York Traditions choose that as their niche?

“Make no mistake,” says Teresa Gregory, president of Traditions Mortgage, a division of York Traditions Bank. “It’s about building a business.” Eighty-seven percent of women are responsible for overseeing the household budget. Women hold 30 percent of private wealth in the world. And from a referral perspective, Gregory noted that 63 percent of all Realtors are female. Simply put, professional women were identified as important to the success of York Traditions.

Narrow focus, broad commitment

Of course, with any niche market, meaningful branding hinges on demonstrating that you understand the needs and values of the niche.

Ephrata is deliberate about the way it represents and practices community values of hard work, faith and integrity, avoiding scandals and lawsuits—and providing sheltered hitches and water sources for horses in the bank parking lot. “For the Plain community, water for horses is like gasoline for cars. They need a place where they can fill up.” Rodenberger explains. “By providing it at our branches, it demonstrates that we understand their needs beyond simply saying so. It’s an extension of our brand.”

York Traditions brought in an artist to create the imagery for the Her Traditions logo—and worked with a researcher to help women identify their “unique financial personalities” as a starting point for talking about money. “Then the door opens,” Gregory explains. Clients can say, “Here’s something about me that you can look at and see my relationship with money.” Instead of trying to address the presumed needs of an entire gender, bank staff can zero in on the strengths and challenges of the individual.

In banking circles, the word “omnichannel” continues to be a popular buzzword. But to develop a successful niche market, Gregory recommends that you concentrate on the channels that will be most effective. For the Her Traditions program, that means a mix of digital, print, support of local women’s organizations—and especially networking events that bring professional women together.

For the Plain community, on the other hand, a digital or social blitz would be a wasteful. “A lot of our marketing for this group is done by word of mouth,” Rodenberger says. Community picnics, print advertising in Amish publications and radio ads on a nonprofit Christian station are also effective. And while “we do a lot of rural images and photography,” he explains, “anyone can do that. We follow through on what’s necessary to demonstrate that we really get this.”

That means bank staff learn the intricacies of how personal finance in the Plain community intersects with community and church finance—plus working with examiners and regulators to help clarify these distinctions. It has also meant buying a remote branch building that had become available in order to keep its buggy-friendly drive-through open—a critical resource for the nearby farmers.

‘They sell for us’

To communicate the value Her Traditions to its clients and prospects, networking has been the linchpin at York Traditions Bank. However, echoing Rodenberger’s observation, Gregory is quick to add that “the key is follow-through. Training the staff on the back end is what makes this effective.

Finally, one of the most compelling reasons to focus on a niche in real estate lending is that you’re working with a community that supports and shares information among its own members. That’s an opportunity to build a cadre of brand ambassadors. At Ephrata, Rodenberger notes, the endorsement of a community leader or church bishop is more effective than a celebrity plug could ever be.

And Gregory reported that one reason Her Traditions has been so effective on the mortgage side is that it has an engaged—and growing—number of fans. “Our fans sell to non-customers and non-referral sources,” she says. “They sell for us by speaking to the service.”

About Kate Young

Kate Young
Kate Young is a senior editor at the ABA Banking Journal and editor of ABA Bank Marketing.
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