On this episode of Expert Insights, Tony Thompson, founder and CEO of the National Association of Minority Mortgage Bankers of America (NAMMBA), talked with our host, Joe Welu, for an enlightened conversation on marketing to a multicultural audience. Tony founded NAMMBA with a vision to increase the engagement of minorities and women in the mortgage banking industry at the local and state levels.
In this week’s show, Joe and Tony address the nuances of marketing to minorities and women and why the practice needs to be rooted in the community. Here are some of Tony Thompson’s insights:
Multicultural Market Poised for Growth
One encouraging trend in the home lending space is that the diversity of who is financing these loans has broadened in recent years, with a greater number of women, people of color, millennials or members of the LGBTQ+ community financing home loans than ever before. Tony said these groups are the greatest market for growth in homeownership and that lenders need to look beyond the traditional home buyer persona. These multicultural home buyers are the audiences that lenders need to communicate with to fulfill the mission of growing homeownership. However, each group has its own preference regarding how to best engage with them.
Logically, lenders recognize that each buyer has a unique customer journey. But many still assume that there is one “African American market” or a single message that will resonate across all members of the LBGTQ+ community. There is not. Tony said that these audiences are often less forgiving of communication that seems cookie cutter or inauthentic. Lenders looking to help these audiences attain homeownership and grow financially need to change their mindset. Rather than thinking about how they, the lender, can educate the consumer, lenders need to start thinking about building trust before engaging, educating, and, ultimately, winning their business.
Part of his group’s mission, Tony said, is to help the marketplace understand that there are different journeys within each of these groups. This type of personalized activity represents the next level of sophistication in marketing for lenders. Those who can execute these campaigns effectively will have a higher connection and penetration rate.
Multicultural Market Goes Beyond Entry Level
A common misperception of the multicultural lending market is that it is just the first-time entry buyer. While first-timers and low-income buyers entering the market through CRA initiatives do comprise a significant segment of this market, many multicultural buyers do not fit this profile.
Many multicultural Baby Boomer and Gen X homeowners are looking to scale up to a larger home to accommodate their families – or looking to downsize their empty nest – representing a robust and growing market. Existing homebuyers across generational lines also make up a sizeable market for mortgage refinances. Tony said that lenders who can establish customer loyalty through relevant, targeted communications to existing borrowers and previous clients would be well-positioned to grow their market share among multicultural buyers.
Tony said that, through his conversations with consumers, real estate agents, loan originators, and others in the industry, loan applicants want to feel that the lender they work with is genuine, understands their circumstances, and cares about them and the community they come from. In Tony’s words, lenders “should aspire to be the hometown lender in their neighborhood,” but actions need to support – and precede – marketing campaigns. For example, erecting billboards in an African-American neighborhood claiming to be “your hometown lender” without first attending community events, conducting educational seminars on homeownership, and participating in local organizations rings false in the eyes of the target audience. “If you’ve never been in my neighborhood, then, technically, you’re not my hometown lender.”
Raising the Next Generation of Lenders
In addition to helping lenders understand multicultural markets, Tony said another part of NAMMBA’s mission is to help them bring in knowledgeable talent that represents those communities. “I don’t speak Spanish, but if I have people around me who can understand how to connect” and engage with the Spanish-speaking homebuyer, Tony said, adding that it’s another way for lenders to demonstrate their understanding of the local community.
Tony said his organization has piloted a program in Houston that places NAMMBA chapters on college campuses, designed to introduce students to the lending industry, provide financial education, and who they are and their role in growing homeownership. Reception has been very positive. The goal, he said, is to raise the next generation of lenders in the image of the communities most poised for homeownership growth in the next 10 or 20 years.
“I’ve got news for our industry,” Tony said. “It’s going to take more than two or three years to go from 42% of African Americans (who own a home) to parity with 72% of whites. It’s going to take a decade-plus, and we’ve got to have a long-term strategy for that.”For more of Tony Thompson’s insights, listen to the full Expert Insights episode.