In the thralls of the go-go 1990s, young professionals seemed to have it all. Flush with college degrees and the cash from good-paying jobs, the generation not only embraced the American Dream—they built it bigger and better than any previous generation had before. Not content with the quaint Cape Cods and split-level colonials inhabited by their parents and grandparents, the group sprung for McMansions in sprawling suburbs or sophisticated condos in the city.
Then the housing market crashed.
In one fell swoop, the Great Recession dashed the hopes of millions of would-be first-time homebuyers. As businesses dealt with the blow from constricted budgets, some college grads were forced to forego a promising career for low-paying service jobs. Others had no choice but to move in with their parents just to get by. Thousands of young professionals could scarcely pay their rent, let alone invest in a mortgage.
To make matters worse, the constant coverage about predatory lenders tarnished the reputation of the mortgage industry. The reports swayed even those young professionals who managed to escape the woes of the downturn. Despite their footing, the group consistently turned to more malleable living options, like renting and rooming.
Today, the housing industry is experiencing a venerable recovery. But, the young professional remains elusive.
It’s no coincidence that the recession happened at the same time that social media, and other digital communication channels, began to take the world by storm. Outside of their novel features, perhaps the biggest lure of these new mediums was their inherent sense of transparency—a facet that had long been lost on the nation’s marketers in the decade’s prior.
Social media allows its users to “get behind the Man” and get right to the point. It also provides a constant stream of information—social channels are literally built so users never miss a thing. The way that information is presented is engaging, simple and straightforward. When its not, users can instantly provide feedback and demand a response.
Many mortgage companies are “on” social media. But, this isn’t a column about social media or digital marketing. It is about how mortgage companies can use the lessons learned from social media companies to attract young professionals back to the housing market.
Understanding the social shift
The numbers speak for themselves. First-time homeownership is at an all-time low. According to a fall 2012 survey conducted by Campbell/Inside Mortgage Finance, the first-time homebuyer share of home purchases fell to 34.7 percent.
To understand why young professionals are eschewing homeownership, mortgage professionals must first try to understand the social shift that has occurred in this group. For example, young professionals are more likely to feel “tied down” rather than liberated by owning a home. Studies also show they are waiting longer to “settle down,” get married or start a family. Others are simply “turned off” to homeownership by what happened during the housing crisis. While rising home prices and tighter lending is certainly to blame, mortgage lenders possess the capabilities to reel in a greater share of these customers.
“How so,” you may ask? Consider this … despite could-be homebuyers’ hesitations, a 2011 Pew Research study on homeownership reported more than 80 percent of current renters expressed wanting to own a home and agreed that “buying a home is the best long-term investment a person can make.”
Young professionals want to buy homes. Mortgage lenders can make that happen. Yet, first time homeownership is at an all-time low. There’s a disconnect occurring here, and it is up to mortgage professionals to fix it.
So, how does the mortgage professional heal the wounds left behind by the recession? It all comes down to trust.
Social media companies have grown in-step with the millennial generation, so it’s not hard to understand why young professionals prefer the digital landscape. This is a generation that was raised on the Internet and technological expansion. The rise of technology has brought down the walls of hierarchy, in many ways, and social media found a way to capitalize on that.
As virtual as the world of social media may appear, it works by building relationships—online and offline. In the social world, the number of users matters, but it is the effectiveness of those relationships, often corroborated by distinguishing the levels of “user engagement,” that bring a user back to the business, time and time again.
User engagement is about a lot more than “Likes.” It’s about the information sharing, the commenting, and the “IRL” (in real life) word-of-mouth buzz. In the mortgage industry, we can compare “Likes” to leads. At some point, we want those “thumbs up” to turn into conversions, and eventually, into real-life customers.
At its most basic level, social media really isn’t all that revolutionary. But, what sets social media companies apart from traditional corporations is that they not only tune in to their users’ habits and wants, but they listen to their needs. Then, they deliver and delivery fast. Social media communication cuts through the “red tape” and bureaucracy that many companies refuse to let go of.
In many cases, users are receiving information from and directly communicating with the higher ups of an organization. Then, they provide the platform for users to speak for themselves. If a company is lucky, users will also speak on behalf of the business, and create a buzz.
Embedding interactivity and providing personal access to superiors within a company isn’t a new concept. It’s the very lifeblood of old time Ma and Pop shop business models, and other successful ventures. But, it is a notion that many industries have lost along the way.
Mortgage companies cannot compete with the broad appeal of social media companies, like Facebook or Twitter. But, they can heed some lessons from this group of successful marketers. There are reasons why social media channels make young professionals tick.
Here are some tips to get you started:
►Be an information generator: Young professionals demand a constant stream of information—it puts them at ease. Information should be presented clearly and simply, and available in a variety of formats, including print, on the Web, on social media and on mobile and tablets.
►Mix-it up: Social feeds are popular because they contain a variety of content. Embed videos, images, glossaries, audio programs, news articles, industry updates and blogs on company Web sites and on social channels.
►Respond to feedback: Avoid automated voice systems and placing customers on hold. Customers should have direct phone access to the business, as well as the tools to reach out to mortgage pros via social media, e-mail, commenting boxes or online chat. Mortgage professionals should do their best to respond to customers within 24 hours.
►Be transparent: Young professionals want the truth—not fluff. Clouding promotional materials with empty promises and marketing jargon isn’t going to result in sales. Give it to them straight.
►Embrace technology: Young professionals often equate a trustworthy business with a tech-savvy one. An outdated Web site or a site with slow page load time may turn off a potential customer. A small or ineffective digital footprint makes the young professionals of today wonder if a business is sketchy or out of touch.
►Show your value: If Facebook’s $40 billion IPO was any indication, a company’s value is about more than just money. Prove your worth by providing excellent customer service, following up with a client, or by anticipating their needs.
In the mortgage industry, that also means reminding young professionals about the importance of homeownership. This group is reachable, but mortgage professionals have to be willing to go where young professionals go—mentally and digitally.
Chad Jampedro is president of GSF Mortgage Corporation. With more than 20 years of experience, GSF Mortgage has embraced the next generation of homeowners with its GOGSF brand, continuing its dedication to flexible and transparent lending. He may be reached by phone at (262) 373-0790.