How Inflation is Changing Consumer Habits, Challenging Lead Generators

In the ever-evolving lead generation industry, marketers continue strategizing ways to keep pace with competitors as inflation and rising interest rates affect the spending habits of cost-conscious consumers and businesses. We’re all seeing the aftershocks unfold in all financial areas of our lives and professional endeavors.

And with an 8.5% inflation rate, Quarter 3 has brought a shift in trends and strategies to counteract changes in consumer spending, with marketers looking to take a quantum leap in the quality of their initiatives to capitalize on new market opportunities. 

Recent topics making headway for discussion revolve around mortgages, credit card debt, auto insurance, merchant cash advance, real estate, and solar energy. 

As Director of Business Development, I always eye the trends shaping the marketing industry and the pain points experienced by marketers trying to generate high-intent leads. Here are some of my thoughts. 

New Options for Mortgage, Auto Insurance, and Credit Card Subprime Borrowers

Credit card balances showed significant increases during Q2, according to a recent report from the Federal Reserve Bank of New York. Mortgage and auto loans also went up during that time, reflecting consumer struggles to keep pace with inflation.

Source: The Fed – Consumer Credit Outstanding

More than ever, subprime borrowers need options to navigate the current economic downturn. They must also make their money work for them, and credit repair is a pivotal first step towards achieving this goal in today’s financial state. 

Of course, increasing credit scores is key, but so is looking into secure credit cards. After maintaining a good standing with a secure card, a borrower can switch to no balance transfer credit, allowing them to move all of their debt(s) from one card to another at no interest cost for a year. 

Raising credit scores can also help consumers decrease car insurance rates, creating an additional avenue to save. This also creates robust marketing opportunities for those in finance, insurance, and other industries. 

How does this affect lead generators in financial firms?

If your thought process is anything like mine, you’d agree that your financial firm cannot achieve half its potential sales without high-intent sales-qualified leads. And where do you find these leads? Wherever they are — searching for companies like yours to provide them with the most beneficial solutions to their pain points.

Considering the vulnerable situation, financial institutions catering to the general consumer must increase their online presence, offer exclusive deals, and tie these deals to the current state of the economy. Only then will you be able to attract and retain a decent pool of new prospects to go after for your financial firm. 

Refinancing Homes as Mortgage Rates Spike

Lenders are having difficulty finding new clients interested in refinancing their homes. Forget about buying new homes, as interest rates continue to spike into Q3. 

Freddie Mac’s rates averaged 5.89% last week, the highest that rates have reached since the last recession in 2008.

Source: Freddie Mac

Where does this leave mortgage lenders, and how much room do they have to market to a seemingly uninterested audience?

One opportunity for mortgage borrowers to cut costs is to borrow against the inflation rate. For instance, if the inflation rate is 6 to 10 percent and a consumer can secure a loan for 3 to 4 percent, they can essentially borrow for free. 

So this is the type of consumer borrower base that mortgage lenders must target at this stage of rising interest rates. With today’s volatile economic climate, lenders must weave aspects of these current events into their lead generation marketing materials. 

While this strategy may target a tiny and specific segment of the targeted consumer market, it will likely yield more high-intent and already-engaged borrowers for business. 

The Dilemma of Buying vs. Renting

Another topic of interest is the rental market, as the cost of renting property has skyrocketed throughout the nation, making the cost of rent in some markets comparable to home mortgages. For those capable of footing the cost of a mortgage-like rent, now is the time to consider owning a home.

With the average one-bedroom apartment price looking like this, it doesn’t take much from young renters to commit to a long-term solution, like purchasing a property.

Source: Zumper

Marketing Opportunities for Real Estate Agents

With growing rent prices in mind, young professionals have begun building equity and assets through home ownership. This should be a key talking point for all real estate agents as they launch new initiatives to attract young home buyers. 

How can this be achieved? Through social media and search engine ad campaigns targeted at first-time home buyers. If you’re a real estate agent, you can even take it up a notch by partnering with a mortgage lender to provide an all-encompassing and guided process for these prospects. 

Solar Goes Local

Moving into home ownership and the many ways that owners look to save on their monthly expenses, we come across possibly the most expensive utility — electricity. Homeowners are no longer just looking to get refinanced and create equity — they’re also looking for ways to slash their energy bills.

And in this day and age, there’s nothing cooler than adopting a self-sufficient solar plan. 

What does this mean for solar companies? 

Earlier this year, I wrote about the best automation strategies for solar companies. This time, I’m going to get granular into how solar companies turn to digital initiatives to attract new customers. 

There are two schools of thought when solar companies decide whether to use organic or paid ads to generate solar lead inquiries. Today, many marketers use paid traffic because it can be presented directly to prospects instead of having them search for the offer in a sea of competitors. 

To make the most of paid ad traffic, many marketers set geo-specific targets and offers to supply clients in different climates and geographic characteristics, like weather, natural hazards, and more. 

Supplying these campaigns with education about financing or tax breaks associated with solar panel installation is also an excellent strategy to push prospects further down the sales pipeline. 

Whatever marketing strategy you deploy for your solar business, remember that filtering your traffic based on location will go a long way in attracting high-intent solar leads. 

Final Thoughts

2022 has brought a shift in trends and strategies to counteract changes in consumer spending resulting from high inflation and the concept of a possible recession, with marketers looking to take a quantum leap in the quality of their leadgen initiatives. 

Regardless of the industry you operate in, your demand or lead generation efforts must be adaptable to today’s economic climate while aligning with the needs of an increasingly frugal consumer base.

Remember, many of these trends will carry over into the fourth quarter of 2023. Plan your marketing efforts accordingly by backing up your operations with technology that will help you automate your marketing strategies and increase your revenue. 

Schedule a consultation to learn more about how Phonexa can power your marketing and lead generation efforts for finance, home services, mortgage, real estate, and other industries.