View more on these topics

Presence of mind

A marketing presence is increasingly important for firms but it can do more harm than good if the strategy is not properly thought through, says Christine Toner

With the recent influx of new entrants, the mortgage industry has never seen so much competition. Companies are battling for recognition and it seems that when the going gets tough, the tough get branding.

Marketing has hit fever pitch and anybody who’s anybody is developing their brand. But how easy is it to establish a brand and does the strategy work?

“A brand is a company’s face to the world,” according to business resource website “It is the company’s name, how that name is visually expressed through a logo and how that name and logo are extended throughout an organisation’s communications.”

A brand equates to a company’s reputation. If you have a recognised brand consumers are more likely to trust your products. From a lender’s point of view the brand must be recognisable to and trusted by brokers so they promote it to their clients. But can having a fancy advertising campaign and quirky logo help you attract more business?

Paul Hunt, marketing director at Platform, believes it can do even more than this. He says a good brand can help a company make more profit and attract better employees.

“By having a successful brand it may be possible to command premium prices, pay less for purchases, entice top talent, enjoy greater loyalty among clients and employees, enjoy stronger distribution, have more stable revenues, face fewer crisis risks and be given the benefit of the doubt when things go wrong,” he says.

But there’s a difference between establishing a brand and establishing a good brand. Look at groceries. Tesco, which is easily the biggest supermarket in the UK, has fantastic advertising, creative marketing, a massive brand and makes huge profits. Compare this with WebVan. The online grocery store had some advertising, a little marketing, a modest brand and went bust.

So what’s the difference between good and bad branding? And how do you avoid the fate of WebVan?

Jeff Knight, director of marketing at GMAC-RFC, says the key to creating a good brand is to understand how your clients see your company.

“What makes a good brand?” he asks. “One that over delivers on its promises. The name is irrelevant and marketers must be aware of the importance of perception. It’s no good thinking you are good if your customers see you in a different light.”

Factors that companies must consider when building their brand are what it will be built on and what values it will promote. Your brand can only be built on what you have to offer and if you don’t select the right features to promote you could be missing a trick.

Alex Hammond, PR manager at Kensington Mortgages, says choosing the values to base your brand on takes a lot of thought.

“The values on which you build your brand should not just be throwaway ideas attached to a marketing campaign,” he says.

“A brand is not built on a marketing campaign, it is built on everyone who works at a business and the experience customers have. So your brand values should be intrinsically linked with the way you run your business.”

The most common way of promoting a brand is advertising. The revenue stream of advertising affects – some say controls – the media. But even with a big advertising budget there is plenty of room for failure.

Alan Cleary, managing director of edeus, thinks many players get it wrong when it comes to advertising.

“The UK mortgage market is not characterised by great marketers,” he says. “When you pick up the trade press you will find it is full of ads but most are only advertising a lender’s rates. A lot of lenders seem to think that rates are the only important thing, but they confuse marketing and price.

“To succeed in this market a company must stand for something special and rates can’t deliver that unless its whole strategy is price-led. Good marketing adds value and helps develop a strong brand.”

The emergence of new lenders such as edeus and DB Mortgages has seen branding become more important. Not only are these companies going all out to push their brands into the limelight but the extra competition has also prompted existing lenders to revamp their marketing.

Knight says the new entrants have made existing lenders sit up and take notice of the benefits of marketing.

“The driving force has been change,” he says. “Marketing is essential for any business but for more than 100 years it was not seen as necessary for many established lenders.

“The new kids on the block know otherwise and have stolen market share through great marketing.

“Others have now woken up to this, which is why we are seeing more marketing activity. But a lot of this is poor and misdirected. Good marketing is about anticipating and satisfying the needs of clients while making a profit. And these needs keep changing so you can’t stand still.”

Branding is not just important for lenders, it is also vital for brokers. It is down to brokers to suggest lenders for clients and if a lender does not have a good brand, brokers have their work cut out. Promoting an unknown brand to a client who wants the reliability of a household name is tough. But Ray Boulger, senior technical manager at John Charcol, believes as long as a broker’s brand is known, whether a lender’s is or not is irrelevant.

“If a client buys into a broker they will trust their decision,” he says. “We have to recommend the most appropriate mortgage to a client. If the client has no affiliation with a broker it’s hard to sell them a lender they have not heard of. This is why a broker’s branding helps. If a client trusts a broker they are likely to trust its advice.

“Whether a lender is known to a client or not is not that important, as the reasons clients want to go with known lenders are usually invalid. Part of a broker’s job is to educate clients.”

But while having a brand may be a saving grace for brokers when it comes to promoting lenders, how easy is it for brokers – especially those of the one-man band variety – to build brands?

Andrew Montlake, partner at Cobalt Capital, says the size of a company and its advertising campaign are irrelevant when it comes to branding.

“Brand building is misunderstood – people think it is only about how much a company spends on advertising campaigns, sponsorships and generating PR but it’s not,” he says.

“While these factors enhance a brand, things aren’t that simple. Your brand is what your customers think about you and whether or not they stay with you. In this sense, for a small brokerage to build a brand it should concentrate on keeping its customers happy. This in turn will generate new clients. The rest will look after itself – you’ll have a strong brand.

“If a broker spends 1m on promoting its brand in the national press and television but then doesn’t meet the expectations of customers it has wasted its money,” Montlake adds.

“If you sell yourself as a company that can arrange an offer in a week and then take three you are doing your brand more harm than good. In this sense, brand building is about following up on promises. It’s no more complex than that, whatever brand con- sultancies tell you.”

Even when a good brand is established things can go wrong. Building a brand is one thing, protecting it is another.

Matthew Russell, PR manager at DB Mortgages, says even with a big marketing budget one misguided comment can destroy everything.

“With big budgets, an expectation can be set that is difficult to live up to, and not delivering the experience associated with the marketing has a huge adverse affect,” he says.

“You have to be careful what you say as you can kill off a brand with one comment. Think Ratner.”

When Gerald Ratner owned a chain of jewellers’ shops, he famously slated his products in a speech, saying the earrings were “cheaper than a Marks & Spencer prawn sandwich – and probably wouldn’t last as long”. It cost Ratner his job and the company 500m.

Branding can be the most important factor in your business. If you get it wrong it can kill it. Taking the risk of launching a marketing campaign can cost more than just the marketing budget but not taking that risk could cut you out of the industry reckoning altogether. As a wise man once said: “You’re nobody without your identity.”


IFAs are best when planning for IHT

Poor Inheritance Tax planning will cost UK adults £1.3bn this year, research by reveals. Although the research also finds people are improving the way they plan when it comes to IHT liabilities, it warns that because house prices are rising at a much faster rate than the IHT threshold, any gains from this improvement […] fears for market’s future says the Bank of England’s decision to rise the interest rate could prove bad for the market.David Bexon, managing director of, says: “The 0.25% rise was a dangerous decision and could prove extremely detrimental to the market. The Bank of England would have been well advised to listen to recent calls from industry […]

Mortgages Direct questions base rate rise

Peter Gladdy, director of Mortgages Direct says the current economic situation is not strong enough to justify a rise in rates. He says: “The housing market is stable and currently showing modest overall growth but the latest rise in interest rates could cause a substantial change in homebuyer attitudes and significantly dampen activity in the […]

Leeds launches long term fixed rate product

Leeds has launched a new 10-year fixed rate mortgage of 4.99%.The mortgage has no higher lending charge, is available up to 90% LTV and allows 10% capital repayments each year without penalty. There is also a fee free version for customers who require help with fees.Karen Wint, head of marketing and PR, says: “With market […]


News and expert analysis straight to your inbox

Sign up