Data Facts Lending Solutions Blog

Actions Lenders Can Take to Increase Millennial Market Share in 2019

by Julie Wink

Oct 11, 2018 10:27:06 AM

Millennial group on phonesMost of us have followed them to some degree for years: those sassy, intriguing Millennials. How they are educated, activities they enjoy, what they won’t abide, and their expectations on life in general have fascinated us for the past decade.  

Now, however, we must look at them in a different light, because they’ve jumped feet-first into the home buying arena. According to the National Association of Realtors, Millennials have been the largest generation of home buyers for the past five years. Lenders who want their business to flourish and their market share to expand now (and in the next few years) must figure out how to market successfully to this generation.  

And there lies the problem.  

Millennials are unique from any other generation, so traditional campaigns and advertising that has brought in strong ROI in the past just aren’t going to work as well on them. The good news is that there are easy ways for lenders to adjust their strategy, so they engage Millennials and turn them into borrowers.  

Millennial woman unsmiling

After closely studying this home buying segment, we have found 5 actions lenders can take now that will increase their Millennial market share in 2019, and beyond.  

#1: Embrace Alternate Credit Products 

Other generations haven’t faced the obstacles of building credit that plagued Millennials. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD) made it significantly more difficult for 18-21-year-olds to open credit cards. In addition, the mortgage meltdown in 2008 tightened credit standards for several years and blocked many opportunities for this generation to gain access to credit.  Both events worked against this generation in building their length of credit history and increasing their credit scores.  

Download the Ultimate Guide to Understanding Credit Scoring

Marketing mortgage lending products to Millennials means digging deeply into products that may not be as familiar as the popular 30-year fixed mortgage loan. Lenders need to check into loan programs that accept non-traditional forms of credit, such as cell phone bills and rental history. Stepping out of the mortgage box we are used to when working with other generations and getting creative with products outside the normal lender “comfort zone” is essential in successfully working with this segment.  

#2: Strengthen Mobile Capabilities 

It’s no secret this generation does everything from pay their bills to find a date to get their news on their mobile devices. Their phones are in front of their faces all the time it seems! They are demanding that their mortgage loan experience be the same.  

It was predicted recently that Millennials would originate nearly 30 billion in mobile mortgages this year alone! Lenders can either be part of this huge shift and industry increase, or they can miss it completely. It all depends on the actions taken now.  

First, lenders must make certain their websites are mobile capable. The last thing a Millennial will abide is a slow, unwieldy experience. They will click away before you can say “hashtag unhappy”.

man unhappy with phone 

Next, there should be a place for them to enter their financial information and pre-qualify for a loan. Millennials who are looking for a mortgage at midnight on a Wednesday night will be irritated if they must wait until the next morning. This is the “got to have it right now” generation, and they won’t settle for less. Lenders who add a pre-qualification button to their website will increase their Millennial borrowers exponentially. Think of it this way: Won’t it be nice to have borrowers initiating the contact, rather than beating the bushes for customers? 

Remember, however, that this generation doesn’t only want automated engagement. That’s why lenders must… 

#3: Bolster the Customer Experience  

Millennials expect to have it all, and they want it now! Lenders who take steps to deliver both exemplary electronic and human service will be the winners. Keep communication lines open with them from the beginning of the purchasing process past closing, and you’ll build a strong Millennial base of customers.  

Here are 4 ways to do it.  

  • Be authentic. Millennials aren’t aliens. Talk to Millennials like real people, because that’s what they are. Opening conversations that foster questions is the way to communicate with this generation.  
  • Be transparent. If there’s a hiccup or obstacle, let them know as soon as possible. Inform them and walk them through their options. Trying to sugarcoat or skate past issues will make them suspicious. With Millennials, it’s all about trust.  
  • Meet them on their home turf. Adapt away from picking up the phone or dashing off an email. Millennial borrowers may want you to text them or send them a message across social media.  
  • Remember their reach. The power of social media is unmatched. They will share a positive customer experience far and wide, and you could receive tons more business. But, they also post about negative experiences. Make every effort to capitalize on their positive references.  

#4: Create Ways to Let Them Drive 

As we mentioned earlier, Millennial refuse to be pigeonholed into the traditional business hours of 8-5, or the normal mortgage loan products, and other perceived written-in-stone rules. For example, they are the generation most likely to negotiate with realtors about their commission. The more lenders can offer ways for Millennials to maintain control of the process, the more successful they will be at marketing to this generation.  

Lead Gen Infographic

  • Craft an online presence. It takes some time but building a few social media profiles puts you where the Millennials hang out seemingly All. The. Time. Follow groups that cater to these buyers and be willing to share information about loans and finance that help them educate themselves and understand their options. 
  • Give them choices. Instead of a big scary lender, function as a helpful partner. Let them choose how you communicate. Let them choose from the mortgage products available to them. The more options you offer them, without overwhelming them, the more in control they feel, and the more positively they will view their resulting experience is with you.  

#5: Prepare to Educate  

Perhaps the biggest expectation Millennials have of the lender, and the one to focus on, is they expect lenders to be the experts. Lenders who convey and present their knowledge in a way that Millennials relate to will be miles ahead of their competition.  

Here’s how: 

  • Did we mention social media? Engaging with the Millennial audience on social media helps solidify you as an expert. Posting happy borrower homes on Pinterest or tweeting quick credit score tips can spark their interest more than a hundred unread advertisements or flyers.  
  • Remember their thirst for knowledge. This generation loves education. Provide them with information on credit scoring, down payments, budgeting, and mortgage options.  
  • Give them access. Be available to promptly answer questions as they arise. Lay out and explain their loan options in terms they understand. This may mean lenders must step out of their comfort zones into products they would have never considered selling ten years ago.  

Young woman thinking about houseIn conclusion, Millennials are not the mortgage borrowers of old. They are unique from any generation that has come before them. To successfully market to them, lenders need to take a close look at their current actions and see where they could be missing the boat. Avoid focusing only on a high-tech experience, or a warm and fuzzy one. Millennials demand both from the people and the companies they do business with and won’t settle for less.  

By acknowledging this and evolving out of the comfort zone, lenders can easily transform into the Millennials’ mortgage originator. Taking these steps now ensure that 2019 and beyond will be chock full of happy Millennial customers and a boom in business.  

Topics: Millennials, mortgage trends, mortgage education

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