The second charge sector has experienced monumental change in the last two years.
Regulatory shifts have resulted in a complete overhaul to the way businesses operate, affecting everything from fee structures to relationships with brokers.
Indeed, for many in the market, those huge changes are still being felt and even players who’ve been around for decades are still trying to work out where their place is in this new market.
And it’s not surprising heads are spinning. Because, alongside the changes brought about by a new regulatory regime, the sector has had to cope with the marketing revolution enveloping financial services as a whole – the world of social media.
Despite being somewhat slow on the uptake, compared to other sectors, the financial services market is beginning to recognise the need for an effective social media strategy, whether it be to engage with customers or create growth and find opportunities by connecting with industry colleagues.
“Social media is incredibly important,” says Rob Griffiths, director of White Dragon Communications, a PR and marketing agency that specialises in financial services. “I won’t bore you with the numbers but levels of social media use is pretty phenomenal and therefore having that presence has the potential to put you in touch, and in front of, large numbers of potential and existing customers. Not only does it do that, but looking at it from a PR perspective, it gives you another outlet of distribution in terms of your news and views, products and services.”
Griffiths says for financial services firms there is a great benefit to having a social media link with existing and potential customers, but that third-party relationships can also be forged.
“Plus of course there is a huge journalist presence online,” he says. “One of the great hashtags in use is #journorequest where journalists, unsurprisingly, post their requests for information and comment. Tapping into this can help firms establish their PR credentials, their voice of authority and help develop those journalist relationships in order (hopefully) to secure regular comment opportunities.”
Like much of the financial services market, the second charge sector has made great strides in recent years when it comes to embracing social media. It is now widely used by second charge lenders and a number of larger brokerages.
“Social media is such a powerful tool that it’s something that any company no matter what sector they are working in should be embracing,” says Sherry Goodchild, operations director, Colonial Second Charge Loans.
Goodchild says she primarily uses social media as a tool for connecting with the brokers who give the firm business, in particular using Linkedin adding “it’s nice to put a face to the name.”
Bradley Moore, head of second charge at Brightstar has two Twitter pages, (“One is my personal one and one belongs to my second charge team at Brightstar that all the team uses”) and says both are used for a number of purposes.
“It is a good way of introducing the Brightstar team and putting a human face to the people that our intermediaries talk to every day,” he says. “We also use it to talk about what we are doing at Brightstar on the second charge front, exhibitions and events we are going to and to share photos when we are there.
“Most importantly to us we use it as an educational tool. There are still many mortgage brokers who do not know why they should use second charges instead of a remortgage for example, so by including links to case studies on Twitter we can help brokers to access more information.”
Indeed, the benefits social media offers as an educational tool are countless. Brokers can follow lenders and masterbrokers to keep up to date with criteria changes and potential developments to be aware of as well as having access to unlimited industry opinion on any given topic.
Steve Walker, managing director of Promise Solutions, which recently re-launched its Twitter account, says the company plans to use social media as a business tool for sharing relevant information rather than getting involved in the more ‘social’ aspects.
“We want to use Twitter, in much the same way we use Linkedin – to share information and keep brokers up to date with developments that are relevant to them as opposed to information that is important to us as a company but is of no use or benefit to brokers. Team photos and staff achievements mean a lot at Promise but what our brokers really want to know is product information, market changes and insight into regulatory developments. I recognise the benefit in using social media to interact on a more social level but with time constraints a key factor we will focus on using it as a business tool in the first instance.”
Time constraints are not the only hurdle in embracing social media. For most companies, one of the biggest issues that arises when developing a social media strategy is how to deal with negative feedback. Social media by its very nature gives everyone a voice, and while that can be useful in engaging with industry colleagues or hearing from market leaders, it also means disgruntled customers have a very clear platform for sharing their opinions. Fear of this can put firms off social media altogether.
“I’m a great believer in focusing on the positives of social media,” says Griffiths. “For instance, a few years ago I had one client who was very suspicious of being ‘on social media’ because they were worried about negative reactions to their business being placed online. However, the point was made that those negative reactions will probably get posted somewhere anyway and wouldn’t it be better to have, for example, a Twitter or LinkedIn presence where you could engage with those opinions and potentially resolve those issues. Plus on top of this you have an opportunity to tell your story and another outlet with which you can show and tell stakeholders what you are doing and the benefits of your proposition.”
Of course, that’s not to say companies are not making mistakes when it comes to social media. Marketing and PR specialist Debbie Staveley, owner of BClear Financial PR and communications agency says the biggest mistake people make on social media is being too bland and not saying anything new.
“What we see so often is people just treating social media as another way of pushing their own
content out,” she says. “They might be putting out far too much content, or making it inappropriate for the audience ie. too work focused or inward looking. This is the equivalent of going to a party with a megaphone and only talking about yourself all evening.
“The most successful people use social media to really engage people; they share information, ask and answer questions and have conversations. They also have a good mixture of business and the more human side which enables people to relate to them.”