Editors Note: This article was originally featured in the July edition of MReport, available now.
The topic of diversity has become an emblematic cliché of political correctness. It is often broached in terms of workplace racial and ethnic diversity with special programs and initiatives to encourage career opportunities for underrepresented populations in the workplace. But in business there is so much more to focus on when it comes to diversity. There are plenty of articles to read about how to encourage more workplace diversity. Let’s consider diversity in a broader sense by looking at the diversity model your company has chosen. Make no mistake about it—diversity or lack thereof in a successful business is a choice.
There are various types of diversity to consider. Knowledge of them will help a company determine where they are so they can either accentuate or modify their efforts.
Diversity in the Workplace
The obligatory discussion of workplace diversity will be brief as we move on to diversity in business. Companies tend to ignore workplace diversity or focus on it in terms of racial and gender in context of career opportunities. When such a focus is misguided or borne out of fear or guilt, it reveals itself as forced and unnatural. Let’s look at an example. In the popular television comedy “Black-ish,” the main character, Andre, is excited to be named the first senior vice president of his marketing firm who happens to be black. Then he finds out his promotion was to become the first black senior vice president. This was evidenced by his new title of senior vice president of the Urban Division. The show cleverly examines the misguided focus on diversity in his firm in a way that is both funny and relatable. This is not an uncommon theme with crude diversity initiatives. But workplace diversity is nonetheless an important issue that executives should focus on, particularly in our industry, which tends not to reflect the diversity of our society at large.
Homebuyers nationwide have significant generational diversity in today’s marketplace. The National Association of Realtors’ data indicates that in 2016 The Silent Generation (born prior to 1946) accounted for 3 percent of home sales, baby boomers (born 1946 to 1964) accounted for 24 percent of home sales, Generation X (born 1965 to 1982) accounted for 44 percent of home sales, and millennials (born 1983 to 2004) accounted for 29 percent of home sales. Consider the effect of this: 71 percent of homebuyers are millennials or Gen Xers.
Why does knowing this matter? Because generational diversity affects how we market, communicate, and use technology with our borrowers. It’s a good idea to run a report from your closings last year and determine how your market share stacks up to the homebuyer generational stratification at large. Understanding who your consumer base currently is is important to determine where you are currently successful. You may be surprised to know you are attracting the burgeoning population of young homebuyers at a pace vastly different that the overall market. If you want to then attract a specific generational demographic more than you are now, you will likely need to consider how you interact with them.
A 2013 PricewaterhouseCoopers study revealed that 75 percent of consumers want to communicate in a multi-channel manner, meaning digital and traditional communication methods, such as in person and by phone. The same study revealed that 28 percent of consumers wish to communicate only digitally. It’s important to understand the diversity and segmentation of your clientele and tailor your business toward the diversity or narrowly focused generational population you most want to attract.
A recent Zillow study broke down the decision-making resources used by and communication preferences of each generation of mortgage customers. As expected, the younger the borrower, the more they rely on social media influences, the internet, and digital communications. But the study is also quick to point out that “millennials consider live dialogue an important part of the borrowing process.”
All this data suggests that it is important to diversify your communications and marketing efforts to address the needs of the various generations of customers with whom you transact. The new buzz term for this is “omnichannel,” which essentially means having diversity in your sales approach.
Geographic Marketing Diversity
Mortgage companies tend to be large or small with few true regional players. Smaller locally focused operators understand their geographic nuances and tend to address local needs quite well. For example, a South Florida-based mortgage company is going to be well-versed in condos, a Baltimore lender will focus on row homes, a New York lender will focus on co-ops, etc. That regional focus will reveal itself in many ways, including the visual cues in marketing material. National lenders may have regional specialists, but they often create their messaging around their corporate headquarters’ regional nuances and forget to deregionalize their communications or elect to segment their communications by region. We have all seen this with brochures and marketing material that have a very specific architectural style, such as adobe Southwest-style homes, saltbox New England-style homes, a cactus in the yard, Spanish tile roofing, or waterfront homes in brochures. This works well if you are a local lender or if you are segmenting your marketing by region. But if you present a marketing piece to a New Englander with an adobe-style home pictured, you will quickly convey that you are an outsider and likely eliminate yourself from consideration. Be careful to decide what cues you want to convey with the visuals in your marketing, and go local or go generic with styles to avoid alienating your customer base.
People in Marketing
Fair lending is a hot topic in today’s environment and many mortgage bankers are interested in capturing market share of all well-qualified borrowers, irrespective of what they look like, who they vote for, who they love, or who they pray to. But as an industry, the subtle messages we send in our marketing often tells a different story. How many marketing pieces do you relate to when you look at them? Now consider a different perspective: Consider yourself as a different race or a different gender. Do those same marketing pieces seem as appealing and relatable?
Ensuring that the visual cues are relatable to all well-qualified borrowers means you must make a conscious commitment to diversify the imagery with inclusive photos of all kinds of people (race, sex, profession, etc.) in your marketing. Remember, a picture is worth a thousand words, so make sure those thousand words tell the story about your company that you want to tell.
Define Yourself and Your Audience
Let’s look at how two well-known companies have approached the diversity in the markets they want to reach. Five Guys Burgers has defined itself narrowly, and they attract a diverse customer base seeking reasonably priced, consistently and quickly prepared burgers and fries. The company’s marketing and messaging are void of images and therefore do not alienate anyone who wants burgers.
Retail chain Target has an extraordinary variety of products that appeal to nearly anyone of any race, gender, social status, and economic status. It’s clear the company has set out to appeal to all and offend none and in turn has achieved great success with that strategy. Look at their marketing and the visual cues they send. The advertisements are relatable to folks from all walks of life. The marketing focuses on people. It’s hard to look at Target’s marketing and not find an image that resemble yourself.
Like Five Guys, which has narrowed its product focus, there are successful mortgage operators who have a narrow product set and market with laser focus on a specific target consumer. They want to be the best at working with those consumers, whether it is veterans or first-time homebuyers or other segments. It’s intentional, and it can be a winning strategy. A strategy not to be diverse is a strategy. But many companies seek to have broad appeal to their community with a broad product offering, like Target. Unfortunately, they inadvertently alienate themselves or their prospective customers by how they communicate (think of generational communication preferences) or in their messaging (think of the adobe house on a brochure in Boston) and struggle to find success.
If companies make a concerted effort to focus on these essential elements of diversity in business, then they will be able to optimize their business. These successful strategies start with intentionality and an understanding of the company and whom they want to appeal to. So, thinking of diversity in terms of business strategy instead of political correctness will help lead to broader success.