Two Ways Lenders Should Elevate Multicultural Marketing
Speaker 1: Welcome to the Expert Insights podcast. Each week, we sit down with executives and leaders in financial services to discuss industry trends, challenges, and strategies, creating a playbook that upcoming leaders can follow to drive revenue and find their own success in the market.
Joe Welu: Hello everyone. Joe Welu here with another episode of Expert Insights, where we tackle the growth and customer loyalty playbooks for modern banks and lenders, and some of the other top issues facing our industry. Today, I'm joined here by Tony Thompson, founder and CEO of NAMMBA, National Association of Minority Mortgage Bankers of America. Tony, it is great to be with you. NAMMBA is on a mission to increase engagement of minorities and women in the mortgage banking industry at the local state and national level. Tony, I'd love to get a little bit more about your background. Tell us the little bit about NAMMBA.
Tony Thompson: Absolutely. First of all, thanks a lot, Joe, for you and the team having me on today's podcast, I'll tell you what I've had a long day, but this is one of the most important, really parts of my day that I was looking forward to in terms of sharing time with you and our team over at Total Expert. I'm a mortgage banker for life like everyone in this industry or shall I say most people in this industry, Joe. I fell into the industry prior to the, my 18 year career in mortgages. I was really in HR. So HR guy who learned how to originate mortgages, went up through management. And then now, the next thing you know, we're leading the charge in a movement to really take our industry to the next level.
Joe Welu: Tony, we spend a lot of time as a company talking about sort of the engagement, the education that needs to happen in our industry. First question coming off of a huge wave of mortgage refis. And in the age of digital marketing, maybe talk to us a little bit about what do you think, and what's your perspective on what a lender needs to understand about connecting with the multicultural market to fulfill on that mission of growing home ownership.
Tony Thompson: When you think about the consumer behavior and most importantly, the impact of the future demographics of those individuals who will be making home purchases. Mainly we're talking about single women, Joe, millennials, communities of color, Asian, Latino, African American, as well as the L G B T community. If I'm a lender today, I really would be focusing on how do I connect, engage with that marketplace? And then most importantly, when we do connect and engage, how do we make sure we communicate and give them a journey that really, that they want to have versus a journey that we've given to clients in the past. And so that's one of the things that I'm really helping leaders in the industry understand the consumer preference on how they want to interact with lenders. And most importantly, the experience that they want is going to be radically different in the purchase centric market versus the last two to three years.
Joe Welu: Where do you think that a lot of lenders just simply drop the ball when it comes to really connecting with the multicultural market? I mean, I share your passion around what we see as this broader opportunity around home ownership.
Tony Thompson: Well, first of all, I think lenders are missing the boat in two areas. The first boat is the market opportunity. Whenever we talk about multicultural or L M I C R A, the first thing that most lenders think about is just that entry consumer. When in fact there are a lot of baby boomers, there are a lot of professionals who are looking to move up, as well as there are a lot of high net, affluent, many what I call multicultural buyers that really lenders need to understand that is a powerful growing market. And it's only going to grow bigger and better. The second piece of that though, is what I always like to say is broad stroking meaning at the end of the day every lender really misses the boat in marketing to the consumer. That's one of the things that I love about Total Expert. I know I'm on a podcast, but I would be saying this if I wasn't on the TE( Total Expert podcast). You understand the consumer's journey and that every consumer has a unique journey. And so what we try to help lenders understand is that all African American consumers are not the same. And you've got to understand and recognize that there is segmentation in that there's a different journey for each one of those segmentations, as it relate, relates to how they want to engage, connect with lenders and for lenders who can get that, man, they've got a huge market opportunity ahead of there.
Joe Welu: I think so too. I want to kind of start at the top of where I think oftentimes I personally see lenders maybe not execute as well. And it definitely falls into, each one of these types of consumers have a unique journey, that is, they're going to identify with the process they probably want to go through. And what we see as kind of an entry point into a lot of these home ownership journeys, that's a critical entry point, is the education process around home ownership in general. And how do you think lenders should approach really being an authority on, and taking a responsibility to educate in the right way, these different groups of potential homeowners that we agree is a great opportunity.
Tony Thompson: Well, first of all, I want to help change the mindset for lenders. Instead of them looking at and thinking about how they engage with the consumer from an education standpoint, quote, unquote, there Joe. What I want them to start thinking about is how do we build trust to ultimately engage with them and win them to do business with us. And so again, one of the things I love about Total Expert is, you guys understand the journey of the customer. You help lenders understand how to really connect and engage with those consumers. What we're trying to do now is also help the marketplace understand that there are different journeys within each one of those segmentations, that this is the next level of lending, and for companies that can go down to that level, they're going to have a higher connection and penetration rate at the end of the day.
Joe Welu: You talk about trust, how much do you think it impacts trust they either have, or don't have with a potential lender? How much does the way they communicate impact that level of that trust?
Tony Thompson: Well, when we talk to consumers, when we talk to real estate agents, when we talk to originators in the marketplace, the main thing that we hear from them that they share with us, Joe, from their consumers is really simple. Consumers want to know that lenders are real and that lenders get them and care about them and their community. We had a lender a couple months ago, one of our partners, they were looking at doing some billboard advertising out in the marketplace. And they wanted to put in on the billboard," Hey, ABC mortgage, we're your hometown lender". Well, you may be the hometown lender, but if you've never been in my neighborhood, then technically you're not hometown lender.
Joe Welu: If you don't have people around here that I recognize, that I know, you're not my hometown lender. Right?
Tony Thompson: Absolutely. And so, you know what we try to help our partner and that lender understand is you should aspire to be the hometown lender in their neighborhood, but because you're not that in their eyes yet, meaning, Hey, are you truly in that marketplace? Have you been marketing yourself before then? Two to three, four years ago on the billboards or other modes of advertising, could really demonstrate that you care about them, that you're here to help them. That's when you can claim you're the hometown lender.
Joe Welu: We talk about educating the customers and then engaging them and then advising them as part of the process. But really what you're describing to me is if you really want to win these opportunities and help us drive the home ownership in these groups, you really have to think about community engagement, in addition to just customer engagement, right? Like being present in these communities, doing educational seminars, things like that. I mean, those types of things. What do you think about that, Tony?
Tony Thompson: I think when lenders think about how do you take advantage of this growing segment. Which three out of four loans last year in 2020, according to NAR, were either financed by a single female, a person of color or a millennial. If you are a lender, building trust, connecting, and having a process to engage consumers how they want to be engaged. Which all three of those segments that I talked about, Joe are very different and unique in terms of how they want to be approached. So as a lender...
Joe Welu: You have to have a path for each one of those identify...
Tony Thompson: One as well, as well as you've got to understand that when that customer finally does reaches out and engage with you, you've got to then say," how do they want to go from here? What do they want that experience to be like?"
Joe Welu: And I think there's a lot of work. If you're really approaching these markets the right way, you really need to put the time and the effort into how you're putting out educational content, the types of campaigns you're running. There's a lot of foundational work that you have to do before you earn the right to have those conversations. Do you think a lot of lenders understand that today?
Tony Thompson: Yeah, I think Joe, we did a survey this year for the first time ever called the 2021 or the mortgage diversity survey. And then our friends over at Cultural Outreach did a survey with 1100 millennials who purchased a home last year in 2020. Do you know, out 1100 millennials, only one out of three said that they trusted the bank and/ or their mortgage lender, who they were doing business with, one out of three.
Joe Welu: That's [ inaudible ]
Tony Thompson: They're going to be buying homes for the next 20 to 30 years.
Joe Welu: We talk a lot about how important these segments are. And then also, if you think about how important customer loyalty is, to profit and growth as a banker or lender customer, loyalty is critical. That's a huge gap in the way that process went, probably from both the communication standpoint and probably some other things there if they really lacked that kind of trust.
Tony Thompson: One note, I just wanted to kind of go back into that stat, what really concerns me is that stat is based upon these individuals all ended up financing their homes. So they went through the engagement process. They went through the mortgage process and they closed on a home. And yet that entire process, how many steps, how many touches do we have an opportunity to connect with a borrower before we go to the closing table?
Joe Welu: Because high quality communication generally always improves that trust factor. And then also the way that we're educating people, not just about initially the process, but also as the process continues, right? If you think about once I'm in a home ownership, once I'm in a transaction, for example, how are you keeping me informed and kind of explaining things to me about what's happening. If I'm a lender and I want to serve these markets, which we think and clearly it's a massive opportunity and it's really important to our country as well, that I should be really also focused on hiring people that live and work in these communities. If I'm an organization that wants to lend in these communities. How do you feel about that?
Tony Thompson: I agree to disagree. And what I mean by that is, the first route of someone's assumption would be absolutely to say yes to what you just said. And to that part, I actually agree with, however, I also believe Joe, I coach still and to this day I have a number of successful loan officers who are not minority, but are doing multicultural business because they get it. They understand that if they build a minority multicultural team, I don't speak Spanish but if I have people around me that can understand how to connect. That is another way that companies can be able to really, at the end of the day, tap into the marketplace, help the consumer, put more people in more homes. So what I tell lenders is you can do both. And what we try to do here at NAMMBA is really help lenders understand that market. And then most importantly, how to position them and their organization to do both of those in terms of bringing in great talent that represents those communities, but also looking at unique ways to build a multicultural team that is still able to support those markets as well.
Joe Welu: And so NAMMBA has been an incredible advocate for enriching minorities and women who work in the mortgage industry. I'd love to hear a little bit more specifics on how NAMMBA is helping support lenders to be better advocates and serve their constituents in these multicultural markets.
Tony Thompson: Yeah, absolutely. First and foremost, our mission at NAMMBA is really a two part mission, Joe. The first part is, if you are a mortgage or real estate professional in this industry, we are just passionate about giving you the tools, the resources, and the education and training that you need to put more people in homes and keep those individuals in homes from a sustainable home ownership. The second piece of our goal is we believe also the future of our industry is tomorrow's buyers and today's college students. And with that, we have a goal and a mission to put chapters on college campuses so that we can talk to students about financial education, so that they can come out and own a home sooner than later, as well as let them know about the exciting careers that we have within the financial services and real estate finance industry. And then we use our NAMMBA family of companies to help companies such as our consulting services, cultural outreach, which does multicultural marketing. We're here to help companies understand how to create a playbook to really, at the day, maximize the opportunity. But the key to success the next three years, who has a playbook and at NAMMBA, what we are trying to do is create a playbook. We call it ASLE an Accredited Social Impact Lender, where we want to help lenders do good,( ie: make money because we understand the business) while doing good( ie: putting more people in homes and closing the racial wealth gaps in communities across the country).
Joe Welu: You touched on it, putting chapters in college campuses. And you mentioned that you have a mission around that. Anything you can share, like how far down that path are you guys?
Tony Thompson: Yeah, absolutely, Joe, Really at the end of the day, that's something that our industry has to have a rallying cry around because we believe there are currently about 583, 000 mortgage license, mortgage originators, bank and non bank in our industry. I'm projecting 200, 000 of those originators will lead the industry by 2025. And if you think about it, Joe, they just came off the best three years in the last decade. And many of them with the average age of a mortgage originator being 49 years old, are going to be opted to retire or move to Florida where I am today. Having said that, we also know that the growth is in millennials, communities of color, as well as the LGBT community. And so what we want to do is we've started a pilot in Houston this year, in the fall, where we have chapters on college campuses and we're working with students throughout the course of the year to introduce them to our industry, provide them with financial literacy, literacy education, talk about who we are, what we do and the role that we play in helping people. And what we've seen is once students learn who we are and what we do, they say I want to be a part of that. I want to help change my neighborhood. I want to help change my community. And those are the same people that are going to impact our industry as leaders over the next decade. And for years to come, I've got news for our industry. It's going to take more than two to three years to go from 42% of African Americans or 47% of African Americans own a home to parody with 72% of whites. It's going to take a decade plus, and we've got to have a long term strategy around that.
Joe Welu: We got to take action around it as an industry, right? The cool part is it also is a great opportunity for people that are still running a business, right? You can have an incredible impact by this. I think it's fantastic what you guys are doing. Thanks for all the amazing work that you do. Thanks for allowing us to be a partner and look forward to seeing some amazing results. We got a lot of work to do together as an industry over the next few years. So thank you so much, Tony.
Tony Thompson: Thanks, Joe. Take care. Great seeing you.
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In the age of digital marketing, what do lenders need to understand about connecting with the multicultural market to grow homeownership? On this episode of Expert Insights, Joe Welu and Tony Thompson discuss two ways can elevate their multi-cultural marketing in the purchase market ahead.