Why being selective of the clients you work with will strengthen your business and save everyone time.
Joshua Vecchio is a director of boutique broking firm Hunter Galloway and shares his business strategy knowledge on website Top Broker.
A few months back I came across a video on Youtube advertising John West and their slogan ‘the fish John West rejects makes it the best’. I initially found it completely puzzling to think a successful company could throw away potential sales and in their case up to 30% of fish are rejected before appearing on your supermarket shelf.
Whereas in my case I was the complete opposite as a broker trying to do every deal that came across my desk - from car finance to development finance to commercial finance to residential finance and business finance, I was the person to see – well so I thought.
I tried on multiple occasions to help a client in any (and all) of these areas but quickly realised I would spend 6-7 times the effort and hours on each deal. This included trying to find the bank’s lending parameters, rates, fees, costs, structure requirements, etc… I’d also burn time trying to find the right person in the bank to ultimately waste both my time and the customers time.
And unfortunately this wasn’t limited to commercial or complex lending. I’ll admit I’ve had clients contact me from interstate looking at doing large purchases and developments, spent days (yes days…) on deals for Chinese speaking clients (I don’t speak Chinese by the way) hired translators, travelled around to see them and dealt with non-conforming deals where I really didn’t know where to start!
After wasting both my prospective clients and my own time I thought there had to be a better way and it was one single philosophy that has helped me turn around my business and literally see me double my settlements within the past 2 months.
So what did I do?
Earlier this year I realised my business had certain strengths and certain weaknesses, and have adopted the John West principle being ‘the clients we turn away determines our profitability’ – and to great effect as this has seen me double my settlements in a very short period.
In practice what this means is we understand where we add value to our client base – this is in residential owner occupied and investment lending between $500k to $1.5M – and we understand these areas intimately, have the best contacts within the banks and have the results to deliver on the most difficult customers within these areas.
So next time you’re taking to a new client you need to ask yourself these four questions to make sure you are not wasting both your time and their time – regardless of the LARGE loan size, or a seemingly LARGE commission cheque:
- Is this prospective client in my target market?
- Am I able to add value to this prospective client?
- Is my business set up to service this client?
- Will I spend more hours on this client for less revenue?
Like I said I’ve found these four simple questions helped me DOUBLE my own settlements within the last 2 months as I was able to focus on the clients that I have been able to add the most value to – they have in turn referred more clients like themselves and gave me more business within a very short period which I can service with less hours and effort.
So are you wasting time on deals and clients you aren’t set up to service?
Could a few deals be costing you time and ultimately your success?
This article originally appeared on Top Broker, a growing online space where tips and strategies are shared by Australia's top mortgage brokers.
