last updated 13 September 2023

The Niching Paradox – 7 Reasons to Niche Your Mortgage Brokerage

What is niching? How does niching work when it comes to generating more mortgage leads for a mortgage business or IFA firm? 

In this video, join me as I talk about niching and why you should be niching your mortgage business to generate more mortgage leads.

Strange as it may seem, you will get more clients by marketing to a smaller number of people. I call this ‘The Niching Paradox.’

Here are the seven main reasons why niching can work for your mortgage business:

  1. Niching differentiates your mortgage business from the others

  2. Niching makes your mortgage business more memorable

  3. Your mortgage business can charge more with niching

  4. Niching reduces competition for your mortgage business

  5. With niching, your mortgage business’s marketing becomes easier

  6. Your mortgage business can run much cheaper Google Ads campaigns.

  7. With niching, your mortgage business can have better Facebook Advertising.

If you’ve been wondering how this niching paradox can help your mortgage business to generate more mortgage leads or if you are a mortgage broker or financial adviser who hasn’t identified your niche yet, then you really must watch this video.

A full transcript appears below.

Full Transcript

Good afternoon everyone. Hello and welcome to all of you who are watching this Live. It's really great to have you on with us this afternoon. If you're watching this later on, on the replay, then hello to you as well. For those who don't know me, I'm David Miles from the PPC machine. I'm on a mission to help mortgage brokers, financial advisors, and other financial services professionals to generate a consistent flow of leads from their own websites, so they can stop stressing about where their next client is coming from basically.

Now in today's live stream, I'm going to be talking about niching, or if you're watching this in the United States, it's very similar to niching. I'm going to do about nature nation and why you should be doing that within your mortgage business if you want to generate more leads.

But first of all, just before we get started, I'd love to get a better idea of how many people watched this Live and how many people will be watching them later on, on the replay. So, whether you're watching live or watching on the replay, could you do me a quick favour and just in the comments, just put either #Live, if you're watching it live at the moment or #replay if you're watching on the replay. That will help me get a gauge of when people are actually getting to watch this.

Also in the comments, as usual as we go through, if you have any questions, thoughts or anything, do put comments and questions in there. I'll do my best to keep it, I've got an iPad, just out of the shot here. I hope it's out of shot. I'll be keeping an eye on that as we go through. You can also put questions if you're watching on the replay because I will check in over the next couple of days and pick up any questions that come in after the actual live event. 

What probably any further, let's just answer the obvious question. What is niching? What do we mean by that? Well, basically within the context of running a mortgage brokerage, niching is when you stop trying to market your business to just anybody and everybody. Instead, you focus on one or more specific audiences. 

Basically, you're marketing your business to a smaller number of people, but you're doing that to get a greater number of new clients. Now I know that sounds counterintuitive. You'd think, you know, if you market to a small number of people, you'll get fewer clients, and if you market to a bigger number of people, you get more clients, but that's not actually the case. 

That's why I call it “Niching Paradox” because it goes against what you expect to be the case. But it has been shown over and over again, in all sorts of different businesses, including my own, as it happens, that if you market to a smaller, tighter group of people, you will actually get more clients than if you spread the net too widely. 

Then, today I'm going to go through seven of the top reasons why I think niching works and why it's a really good thing to do in your particular mortgage business. I'm just going to share the, see, pass the iPad, see where the share button is. There it is, and share the slides for this.

Okay, seven reasons why you should be niching your business as a mortgage broker. The first one is about differentiation. Differentiating yourself from all the other mortgage brokers who are out there. I double-checked the stats earlier today, and I count this number here, 48,274. That's the number I found that according to the FCA, that's how many mortgage brokers there were operating in the UK as of 2018. Either directly authorized or as Ars of directly authorized firms or employees of directly authorized firms. 

That's obviously a large number of people. As I've said to several of you over the years and over the months that we've been talking about different things, the big problem you've got as a mortgage broker, and it's not unique to the mortgage industry, of course, it applies to financial advisors, insurance brokers in all sorts of other professions, at the end of the day, give or take. Some people are whole of market and some are restricted panel, but broadly speaking, all 48,000 of those mortgage brokers are all selling the same products from the same lenders.

Then, if I get a mortgage from a mortgage broker A, there's a good chance it's not going to be different from the mortgage I would get from a mortgage broker B. So as a mortgage broker, how do you set yourself apart and differentiate yourself from the other 48,000 jobs in the 73 mortgage brokers that you're competing against? Niching is one way to do that. Because instead of being just a general mortgage broker, or the mortgage broker who specializes in a particular thing like mortgages for IT contractors, mortgages for Fache cottages or whatever your niche is that immediately sets you apart from the crowd.

The second reason is that niching helps you to become more memorable. In other words, you're more likely to stick in someone's mind. Instead of being just that guy, I met who was a mortgage broker, or that mortgage broker I spoke to at a networking event last week. If you are a mortgage broker who is specialized in a particular sector, then you're more likely to stick in people's minds. 

I had a really good example of that actually when I was putting this slide together. I was trying to give an example of this. I immediately thought of someone whose I came across his post on LinkedIn last week or the week before. It was a post that he put out and it has to do with writing life insurance policies in Trust. I think if I remember correctly and I posted a comment in reply to it, but that particular broker really stuck in my mind. I remembered him wasn't because I've commented on his post, but I remembered him because he had a niche.

Then, he wasn't just another mortgage broker that I was connected to on LinkedIn or whose posts I was seeing on there. That's him, that's his profile and you can see straight away from looking at his LinkedIn profile that he has a very clear niche. He's not just a mortgage broker offering a range of options from lots of lenders to get you the best deal or whatever all the others will be saying. He's actually specializing his niche into their mortgages for people that work in the NHS. He's even managed in his LinkedIn headline to weave in one of the particular benefits he offers, which he feels is particularly relevant to that niche. Which is the ability to see him at unusual times and get appointments that fit around your shift patterns and all that kind of thing.

Because of that as I say, he's stuck in my mind since last week out of all the many mortgage brokers I see or interact with on LinkedIn all the time. I'm seeing a few things in the comments by the same people who are seeing frozen pictures. I don't know whether that's just one person's like that's just an individual issue there or whether other people are saying I have got a test view of it running on this iPad here, and I can see things moving on there. Hopefully, that's not affecting everyone, but if it is or if you having any problems watching it live, then do come back and give it a try on the replay later on. Because it should at the very least be viewable. 

Okay, so that's your second reason for furnishing your businesses about. Becoming more memorable and not being just another mortgage broker that people are going to forget about far more easily.

The third reason is, again, this applies generally to niching and not only just within the mortgage sector. As a general rule of thumb, the people who have a niche or the people who are more specialists, are the ones who can charge more for their services. An example that is often used to illustrate this is within the medical profession. 

If you, for example, go and see your local GP because you've got, got pain in your hip or something like that. Your GP, your general practitioner is by definition a generalist, he or she will have reasonably have good knowledge of all aspects of medicine, the human body and whatever. Then, your GP would be able to diagnose to an extent that you have something wrong with your hip and that you need to see a specialist.

Then your GP, will give you a letter and send you off to the local hospital where you would see the Orthopedic surgeon or the Orthopedic consultant, the person who specializes in this case: treating issues with hips. That's the person. If it comes out in an actual operation, who do you want doing it? Do you want my GP doing it? Who knows a reasonable amount, but everything. Or, do you want the hip surgeon doing it? Who specializes in fixing people's hips day in, day out. 

Of course, it's going to be the specialist surgeon. Then, which of them do you think gets paid more or can charge more for his or her services? It's the specialist surgeon. You can see the same thing happening within the hospitality industry. 

If you want to go out for a meal, obviously, in the days when you can do that kind of thing. You want to go out for a meal and let's say, you want to go for a curry. You could go to Wetherspoons for a curry. They were pop. They serve all kinds of food whether it was steaks, curries, that efficient chips or the whole lot, and you'll pay whatever it is, six or seven quid whatever for your meal. 

Or, if you want a really nice curry, you could go to an actual dedicated Indian restaurant, and where are you going to pay more. You're going to pay more at the actual Indian restaurant because they specialize in that particular cuisine.

Now in terms of the mortgage industry, you could find that being a niche broker is one of the things that makes it easier to justify charging a broker fee for your services. If you're just another broker offering all kinds of mortgages, to all kinds of people, and you're trying to charge a fee, then your client or prospective client says to you that he/she likes what you're saying, but there's another broker down the road that will do my mortgage for free. That's why the client will be going to him. 

Well, it's difficult to counter that, but it's much easier to counter that if you can say, "Oh, yeah, but does that, does that other mortgage broker down the road device specialize in Denmark, which is for people who work in the NHS. Will they be able to present your case in the best way? Are they done mortgages for 10 other NHS workers this month?" And, "I already know which lenders have got the best deals for people with your kind of job, et cetera, et cetera." That's what you're paying for.

It can actually help to be able to justify charging fees if you say, that the reason I charge a fee is that I'm a specialist in this particular sector. You might need to charge a slightly higher broker fee when you do it at the moment by becoming a specialist.

I guess the other thing with that as well actually, is that if someone has come to you for a mortgage may come to you because you are a specialist in their particular profession or in the particular kind of property that they're looking to do or whatever. Sorry, I got distracted by math is common. That's like a good curry analogy. I like a good Curry analogy. I'm glad you approved.

Yes, they're also more likely to stay with you if this client, if you're a specialist and do all the other bits and pieces like the protection. Maybe let you refer them to a specialist worldwide, to it's going to pay you a referral for you and all those things. It just becomes much easier to fall in that and keep that client and get all the upsells and cross-sells if you're seen as the specialist as well.

The reason number four is that by niching you reduce your competition. So if it's timeless in a bit with the differentiation point that we talked about at the beginning. As we said at the start, there were 48,000 odd mortgage brokers out there. The example from that guy's LinkedIn profile, how many mortgage brokers are there out there who specialize in doing mortgages for the NHS?

I don't know the number. It'll be more than just this one guy, obviously, but it would also be a lot less than 48,274. Then, as soon as you focus on a niche or niches, you wipe out a lot of your competition because you've removed yourself from that crowded marketplace. That crowded playing field and you're now competing against a much smaller number of other brokers.

I find exactly the same thing myself in my own business. I regularly have potential clients talking to me who will say something like they're quite upfront. So when I say I'm talking to you, I'm talking to one or two other people as well, but only a couple. I'm only talking to people who specialize in doing digital marketing for financial services. And as soon as they say that I can pretty much in my head name, who the other people are going to be talking to, because if they were just talking to digital marketing consultants, obviously there was thousands of us in the country. But if they're only looking to talk to digital marketing consultants who specialize in financial services, then there's me and about four others. 

Then, the people who are looking for a supplier in that kind of way, it's a much smaller pool. Suddenly I've got a handful of competitors and I can name every one of them. Whereas if I was just a generalist, I'd have thousands. I wouldn't be able to name more than a few of the really big ones anyway. That's another good reason to do it is reducing your competition.

Now this one, sometimes people take a little while to get their head around this next one. "If you niche your business, it actually makes all of your marketing easier." The reason I say that is because it actually gives you a much clearer idea of where to start with your marketing. Also if you're a small business with a limited marketing budget, it gives you a much tighter focus and clear target of where to spend that limited budget. 

The reason this happens is that, if you give in anything in life, if you get people too much choice, they get confused and we don't know where to start or what you're going to choose. A really good analogy for this is, I don't know if any of you watching this. Ever done any networking in particular or been involved in BNI (Business Networking International)

They have breakfast networking meetings all around the country, around the world. I know it works. I've been a member of a BNI group for about 10 years. Then, one of the things they teach you to do is when you're giving your 60-second presentation each week. Saying who you are and what you do. They encourage you to say what kind of referrals you're looking for? What kind of potential clients would you like to be introduced to this week? 

They encourage you to be as specific as possible when you're saying who you want to be referred to. Rather than just saying, I want to be introduced to finance directors, you would say, I want to be introduced to Joe Bloggs. He's the finance director at whatever PLC. The reason I encourage you to do that is it's actually then much easier for everybody else in the room to visualize and think about what you want because you've been really specific.

Then, there's a chance that somebody in the room might know Joe Bloggs, who's the finance director of big co. PLC. But even if I don't, because you've asked for something quite specific, it will make them think along that line. They might think, well, I don't know, Joe Bloggs who is to finance direct to a blah, blah, blah, but actually my brother's mother-in-law, she's the finance director of another company, but it's very similar to them.

Perhaps I could see if I could introduce her to this person who wants to speak to finance directors. Whereas if someone in their requests for introductions cast the net too wide, people just will don't know. That could be anyone. I don't know. 

As a mortgage broker, if you say to people in that context that you'd like to speak to anyone. Who's looking to buy a house or anyone who's got a house and might want to save money on their mortgage. It's too big. An ask people will just say, "Oh, well it could be him. It could be her. It could be, oh, I don't know who to introduce them to." So, I just want, I'll just give up. Whereas if you say that you want to speak to someone who is just had a new baby. Looking to extend their house and needs to talk about how to raise the finance for that. There's far more chance actually, of someone knowing someone like that, a little bit like that. Being able to give you a name. 

That same theory applies when it comes to you doing your own marketing. If I say to you go out and market your business to everybody. You won't know where to start, and it's just, it's a too mammoth task. Whereas if I say, if you go out and market your business to again, taking that same example, then go out and market your business to so recently qualified NHS staff. People have just qualified as doctors in the NHS within the last five years. 

That becomes a much easier thing to say that you can deal with that. That's got defined boundaries. I know what I'm looking for. I can now start thinking about where is the best place to go and find those newly qualified doctors. Rather than trying to think, where is the best place to go and find everyone who has a house or might be thinking of buying one. Hopefully, you can see the hope. You can see the difference there.

Linked to that point it not only makes all of your marketing easier if you have a niche, but there's a couple of very specific areas and obviously, areas which I'm particularly passionate about where having a niche makes your life much easier. The first one of those is Google Ads. If you're running Google Ads to try and attract people to your website who are looking for mortgage advice or looking to speak to a mortgage broker or whatever. You could use quite general keywords like mortgage, broker, mortgage advice, mortgage quotes, remortgage quotes, that kind of thing. If you haven't got a niche and just trying to attract everybody well, that's all you can do really. 

The problem is any of you have been on any of my Google Ads, training courses or Facebook Lives or anything we'll know. If you are too generalist, stick with your keywords in Google Ads or you're going to end up competing against a lot of other appetizers. And so the amount you have to pay for each click on your Ads will be driven up. 

On the other hand, if you already have a clearly defined niche. That's going to mean that the keywords you naturally start to think of using in your Google Ads campaigns are going to be more niche. Kind of keywords like mortgages for doctors, mortgages for nurses, mortgages for paramedics. All those kinds of things would be the sort of keywords you would go after if your chosen niche was people who worked at NHS.

Also, with those niche kinds of keywords, we'll have fewer people bidding on them because there are a smaller number of mortgage brokers who are focusing on that niche. Then, because they've got fewer people bidding on them, the cost per click will be lower because like any auction, but fewer people that are bidding, the less chance there is that the price gets pushed up and out. 

The second benefit of it within the Google Ads context is that if you have a clear niche, the ads that you write and which appear on Google, when someone triggers one of your keywords, you can make sure that those ads are very specific to that niche. Then, you can have ads, which talk about the fact that you provide mortgage advice for NHS people. Oh, but talk about the fact that one of the benefits of your services is you'll fit in and have appointments with networks around their shift patterns and all that kind of thing. 

Of course, because those ads will then be more engaging to your target audience. They're more likely to click on them. Then, if you get more clicks on your ad, if you get a higher click-through rate, Google rewards you for that by giving you a better what they call the quality score. This means that you pay less for your click and you potentially appear higher up the rankings than people who are bidding more than you, because you've got this better quality school. 

You don't need to have a niche to do all these things correctly in Google Ads and define tighter keywords and write better ads. But if you've already got a niche, it makes it much easier to do those things in Google Ads. In fact, it almost kind of steers you towards doing that naturally compared to, whereas if you were a generalist, you'd have to make a real effort to try and make your keywords more focused and find the less competitive ones.

And then the final one number seven is similar to how it can have a niche that can help your Google advertising. If you've got a niche, it can make your Facebook advertising more effective if you decide to go down that route. Now, if you've done any Facebook advertising before, or probably even if you've been on the receiving end to Facebook advertising, you'll know about the whole sort of principle with Facebook advertising. That as the appetizer, you can target people based on things like their age, gender, where they live, what their hobbies and interests are all those kinds of things. 

Also, Facebook has a huge list of different things that you can talk to me about. One of the challenges that you have as a mortgage broker is that there are certain categories of ads. Those are categories are involved things like buying houses or getting credit so things which obviously are closely linked to the world of a mortgage broker.

If you're advertising and some of those special categories, you are now very restricted on what you can do targeting wisely. You can't target people based on things like age, gender, or other protected characteristics. If you are advertising a product or service. it's to do with things like credit or housing. That means about, I was doing a one-to-one training session online last week with a mortgage broker who had had some Facebook Ads running. After a few days, Facebook had rejected and disapproved the ads. The reason was that it was nothing controversial, like the ads, they were ads that were targeting first time buyers and were offering the first time buyers a guide that they could download.

But the ads had been set up to only target people between a certain age range, between 21 and 40 or something like that. Because the ads were related to buying houses and because the advertiser was targeting based on age, Facebook rejected them. Then, you can't do that. 

You need to find a different way if you're advertising on Facebook as a mortgage broker to narrow the field a bit, rather than advertising to all 60 million people in the UK, or have many of them, on Facebook. If you can't target by any of the protective characteristics, what you can do though, is target based on things like interests, job titles or things like that. 

Again, keeping out our NHS niche. For example, if you were running Facebook ads, you could then say that you'll target the whole of the UK, but I'm going to only show ads to people who have job titles like GP, surgeon, doctor, nurse and so on. That would be a way of narrowing it down from just everybody in the country but avoiding, falling into the trap of targeting based on any of the things that you're not allowed to target. 

It also means, again, a bit as we talked about with the Google Ads about making the ads relevant to your audience. It means that the ads can then speak directly to your target niche. Then, if you know that you are advertising to people who work in the NHS, you can make sure that your ads, use imagery that's relevant to the profession and have messaging that's relevant to them and all that kind of thing, which again will increase the engagement.

Then, there you have it. Those are the seven main reasons why niching is a good idea as a mortgage broker. Now that we've talked about the reasons why you should do it, if you want to know how to do it then you should join me and the rest of the members of the predictable pipeline program. The Principal Pipeline Program, if you're not heard of it, it is a membership program I've set up for mortgage brokers and financial advisors who want to learn how to use our own websites to generate a consistent flow of leads and stop stressing about where the next client's coming from.

What you get within the program is you get twice, monthly group coaching calls, and the next one of those is on Tuesday next week. We will be talking in that call all about niching and going into more detail than we have today. Specifically focusing on how you choose a niche. Looking at examples of all the different kinds of niches that you could have because I believe it was a lot more than just NHS. 

We'd be looking at all examples of different kinds of niches, looking at how you choose the right one for you and how you're going to apply that niche or niches to your business and integrate it into all the aspects of your marketing. The program also includes a whole library of online courses including a whole course just on niching. There are done for you resources and ready-made email sequences. You can download template marketing documents done for you, ad templates, all that kind of stuff. You get access to a support forum, an online community, and you get discounts on one-to-one training at the time that I was talking about and I was doing at that guy last week. 

At the moment, because it is in its launch month, it's on offer. So, at the moment, you can join the program for just £69 a month, and you'll be locked in at that price, even if, as it will do it. Then it goes up for new members after that. If you've got any questions about that, or think that might be useful for you, have a look at the links on the screen there,, or get in touch with me on any of the usual channels 

Do we have any other questions and around I don't think we've talked about with Nisha now, I'm just looking back through the comments. Mattresses say something. He said, "Both Google ads and Facebook has worked well for most brokers. Facebook ads can often be temperamental." Yes, I agree. I'm more of an advocate of Google Ads than Facebook Ads, just personal preference. I'm more of an expert on Google as Ads compared to Facebook Ads but the reason I prefer it isn't just being more comfortable with it. 

I think Google Ads, there are two reasons why I prefer it. One with Google ads, you get people who are actively searching on Google at the moment for mortgages or mortgage advice. Whereas with Facebook, you're going to be showing your ads to people who might be actively looking, but equally might just be thinking about mortgages at the moment. The second thing is I do find Facebook advertising is far more temperamental in terms of you're far more likely to get your ads disapproved that could be running for a week or so. Then, suddenly they'll disapprove of them for some reason often it's not a valid reason. When you request a manual review, start them running again, but you don't tend to get so much of that with Google ads.

I would always be very wary just for that reason. I learned about building an entire business on Facebook ads because they can pull the rug from under you at any moment. It's often not that easy to then speak to anyone and get it sorted. At least in my experience, matters may think differently, 

Then okay, well, if there are no other questions I'll wrap it up there. Thank you very much for coming on today. I hope that's been useful. If you've got any questions you think of afterwards about. Any aspect of what I've spoken about today, then do just pop them in the comments. If you've got any requests or suggestions as to what you'd like to see in future Facebook lives, pop them in as well. Hope you have a good evening. Thank you so much for coming along. Cheers! Bye.

  • "What is niching? Well, basically within the context of running a mortgage brokerage, niching is when you stop trying to market your business to just anybody and everybody. Instead, you focus on one or more specific audiences." - David Miles
  • "Niching helps you to become more memorable. In other words, you're more likely to stick in someone's mind." - David Miles
  • "As a general rule of thumb, the people who have a niche or the people who are more specialists, are the ones who are able to charge more for their services." - David Miles

About the author 

David Miles

As a digital marketing consultant, author and trainer, I specialise in helping businesses in the financial services sector use the internet to get more enquiries and increase profits.

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