What is lending really about?
In its most general sense, lending is a business that allows for temporary giving of money to another person known as a borrower with the expectation that it will be repaid with interest. What a simple concept! The lender is paid interest on the loan as a cost of the loan and the higher the risk of not being paid back, the higher the interest rate.
In Nigeria, micro-finance banks and niche Fintech startups are the prominent go-to places for getting personal and SME loans but as opposed to large commercial banks, loans from Fintechs are quick, easy and accessible. Due to the potential of massive growth in the lending industry, platforms like Lendsqr have created an opportunity for individuals to invest in lending and also earn for themselves an extra income. It is a lending as a service (LaaS) tool for lenders to run their own lending business, a first process is to create an account.
Intend to invest in lending? This is why you should define your target market.
According to Investopedia, a target market refers to a group of potential customers to whom a company wants to sell its products and services. Target marketing would revolve around deploying marketing techniques for a particular segment of markets which could be key to attract new customers, expand business opportunities across geographies and expand distribution network to widen the reach. Remember, not all products or services are meant for everyone.
As with every other kind of business, identifying a target market in a lending business is very crucial. It’s among the most crucial elements to be considered. As a lender, the lack of knowledge of your target market results in unrealistic expectations.
Also, to promote your lending business using digital channels, you need to first identify your target market which also includes identifying your target audience.
Lenders who know how to identify their target market and audiences stand a better chance of having a successful lending business because they lend to the right consumer. Target audience data is important to lending business. It’s the key document that lenders use to determine which borrowers they want to lend to.
Learning to distinguish between different target markets makes it easier to determine what market segment or niche you want to invest in. There are different kinds of lenders; some invest in agriculture, e-commerce, technology, etc. It’s very important to define your target market.
These are a few steps to define your target market:
· Understand the customer problems that you solve
· Paint a picture of your target customer. Which specific customers will benefit from your offer?
· Choose specific demographics to target (age, location, gender, income level, education level, marital status, occupation, etc.).
· Check out your competitors. Who are your competitors targeting? Who are their current customers?
Having a well-defined target market is more important than ever. It’s quite impossible to target everyone and this is why lending businesses can effectively compete with traditional banks by targeting a niche market.
Why should you promote your lending business using digital channels?
Gone are the days when people would consume most of their information solely from offline channels like newspapers and magazines. Now, it’s a different experience. You’ll most likely see someone on a desktop, smartphone, tablet, or any number of devices, catching up on the latest news headlines, shopping online or checking email.
For a lending platform like Lendsqr that allows you to invite borrowers, there’s a need for you to create awareness about your lending business on digital platforms. There are different digital channels you can use to promote your lending business. They include social media, content marketing — blog/vlog/podcast, display advertising, SEO and PPC search ads, etc. For the sake of this article, there’ll be more focus on social media, content marketing and PPC.
Let’s start with Social Media.
Did you know that social media is a world of its own? Social media is powerful and it has changed the way we live our lives and interact with others. Social media statistics from 2019 show that there are 3.2 billion social media users worldwide, a massive 42% of the global population. This data is an evident reason why businesses are promoted on social media. Create content that’s educative and entertaining around lending and build a brand name for yourself. An example is Money Africa on social media who educate people on financial literacy. A budget can be created for simple Facebook and Instagram ads that’ll help boost the reach of your content.
The next to be discussed is Content marketing.
I bet that when you hear “content marketing,” you think about blogs, Twitter, Facebook, and viral YouTube videos. The goal of content marketing is to stimulate interest from a targeted audience. It’s a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action. It’s a type of marketing that involves the creation and sharing of optimized online materials that informs, educates, entertains, etc. To promote your lending business using digital channels, consider these consumable formats:
· Blog articles
· Memes, etc
Content marketing is all about storytelling. Tell your lending story in creative ways.
Now, let’s talk on PPC.
According to Wikipedia, “Pay-per-click (PPC), also known as cost per click (CPC), is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher (typically a search engine, website owner, or a network of websites) when the ad is clicked.” It is commonly associated with first-tier search engines (such as Google Ads and Bing Ads).
In using search engines as a digital channel to promote your lending business, you typically bid on keyword phrases relevant to your target market. Strategically crafted PPC campaigns provide traffic, leads, and customers almost instantly once the ads start running but PPC campaigns are a bit more complex and require careful planning.
Use this guide to help ensure your first PPC campaign is a successful one:
Every successful AdWords campaign starts with research. Before launching an AdWords campaign, you need to know what your customers want, what they’re looking for, and how they’re searching for it. As a lender, you’ll need to research on the niche that needs more loans, how they’re getting the loans, etc. You could load up a campaign with whatever keywords you like but if your customers aren’t searching for your product using the phrases you target, then your campaign will be a failed one. Also, if you target the wrong keywords, you could wind up spending a lot of money with little to no conversions. So, it’s important to research.
- Use keyword tools to check the demand.
Google AdWords Keyword Planner provides options for validating the keywords you’ve found by showing you search volume data and trends, cost per click, and competitive data. It will also provide keyword suggestions so you can expand on the most effective keywords. Ask yourself, ‘what keywords are borrowers searching for and how can I target them using these words?’
- Structure and organize your PPC keywords.
Once you have data on the keywords you want to target, you want to organize those keywords into a more targeted group of keywords that are related to one another. The more relevant your ad groups are, the easier it is to measure the performance of your keywords.
- Know your budget
It’s important to ask yourself: “Can I afford to advertise for this keyword?”
- Research the competitive landscape
If you’re not aware of who your competitors are and what they’re doing, it’s time to get familiar. There’s a lot you can learn from analyzing their PPC campaigns if they’re running them.
- Write a great ad copy
A great ad copy is relevant and communicates your business’ unique selling points. Create a convertible call to action. An example can be: borrow now, click here, buy now, send messages, etc.
Lending is a profitable endeavor, and the good news is that digital marketing and technology has helped create new opportunities for you to attract and engage individuals who need to borrow. It provides room for lenders to not only reach consumers but also deliver a message that resonates and encourages them to take action. Interestingly, Lendsqr allows you to acquire borrowers yourself.