We have been hearing recently about people being advised on market segmentation.

There are reasons TO and reasons NOT TO segment.

Firstly, if you have completely different businesses and different target markets then it can make sense to segment.

For example, I used to own the Australian and New Zealand distribution for a company called ElliptiGO (stand up bikes) while also running Your Client Matters.

Now while some brokers I knew rode bikes and liked to run and could definitely use this new awesome product I was selling, it did not make sense to randomly market to them with my normal ElliptiGO marketing PLUS I would not have had their permission to do so for that business anyway.

If it came up in conversation, then of course I would get their permission and send them details.

What constantly frustrates me in the marketing industry and in our finance industry is the segmentation advice people are receiving without thinking it all the way through.

  • Segment your first home buyers
  • Segment your investors
  • Segment your business owners
  • Segment, segment, segment…

Let me give you an example of WHY SEGMENTATION DOES NOT WORK.

YCM was extremely excited (or perhaps it was just me – lol) about the new First Home Loan Deposit Scheme (FHLDS)rolled out in January. Mainly because I have a 23yo step son in my life and I was excited that he might be able to purchase his first home (or I should say a very small apartment being based in Sydney).

We also have the young Georgia in our office who has been thinking of getting an investment property in the last 12 months AND NOW was a really good time to consider it before the low end of the property market becomes unaffordable.

I sent them both to one of my favourite local brokers in January to obtain their finance capacity.

Since then, they have both been exploring properties within their borrowing capacity and I am pleased to say that Kurtis received his loan approval on Friday and secured an excellent one bedder over the weekend. No, not using the FHLDS but with a family pledge, (yeh – I should have checked his savings first – oh well) but at least he’s in market and well on his way to a great future of playing the property investment game.

No doubt Georgia will follow through soon.

Why am I telling you this?

Who refers First Home Buyers to their broker?

  • Mums and dads do.
  • Step parents do.
  • Employers do.
  • Friends do.

Who should you market to and communicate with to attract First Home Buyers to your businesses?

Those above of course.

And your potential first home buyers.

YCM released our First Home Buyers DIY and a DFY (Done For You) marketing packages over the last few weeks to the broking community and the first comments from those who have invested in this product was they would send the campaigns to their first home buyers.

Well of course that makes sense, but when most brokers have a client list full of parents, bosses and family friends, doesn’t it make sense to let them know as well to encourage their young adults to get in touch with you???

It’s a no brainer to us. Why would you only educate FHBs? It’s the parents that need the education as well.

We also hear a lot that many brokers don’t like working with FHBs.
???

FYI – both Kurtis and Georgia will turn their property into an investment once their due time is up as a First Home Owner. Kurtis was so excited on Saturday he called us back asking us how he can get his next one!

(Steady mate – give it time… you haven’t even settled on this one yet!)

So key learnings here?

  1. Market and communicate to everyone who knows your target market (that’s everyone!)
  2. Do not judge our young adults and only see them as FHBs.
    They ARE your next investor – perhaps 3-5 years away, but as you already know… it’s easier to find more business from existing clients than to find new ones.

Another tip!

Put all your NEW LEADS onto your database…
Georgia has been talking with 3 brokers and an insurance broker for income protection.
Not one of them have her on their marketing list…
What’s with that?

I know you guys are very busy at the moment, but you should never be too busy to pop your closest next client on your marketing list to remind them of your service.

I can’t even begin to tell you how I feel when I write about this…

Kurtis has told about 25 people over the weekend that he’s bought his first unit.
What was their first question?
How did you get the finance for that????

Quote of the month…
“Find me an investor who has not also purchased a first home, and I’ll find you that needle in the hay”
D Janes.

So something that ‘triggered’ an interest for two young adults I know through the FHLDS has ended in two solid referrals to a broker (and they won’t even use the FHLDS).

That’s called marketing.
And not by segmenting .

But wait…
Just one more quick story…
On why NOT to segment.

Eg. A fairly ‘young’ and astute business owner/entrepreneur has a few investment properties (including commercial) and owns her own home. She has a few young adult children in her life and 16 employees…

So as a business owner, she may get overlooked to receive information on property and finance and perhaps either receives a regular update from an asset broker or not at all. (Actually it is highly unlikely as many asset brokers do not communicate with their business owners either).

If we categorise our business owners to ONLY asset finance content, you too will miss out on the valuable residential and investment opportunities they may offer you.

If you only communicate your resi offers, you could lose her directly to a bank for her business and commercial requirements.

So my final message is something that I have been saying for over 15 years now…

“Everyone knows someone in a 12 month period who needs finance…”

 Make sure they are on your list!

 My suggestion after delivering marketing for over 15 years…

DON’T segment!

Good luck with your marketing strategies this month.

Remember, if you need help delivering quality content to your clients to improve your retention, re-engagement AND to generate more business for you then…

Think of us at
Your Client Matters

We welcome your call.
02 9526 9999
From your dedicated Marketing Specialists for the finance industry.
Residential and investment | Financial Planning & Insurance | Asset finance
Marketing specialists for over 15 years…