A broker explains how charging clients an upfront fee can help cement their commitment to you.
Director of Discovery Finance Group, Joshua Vecchio has written over $250m using techniques and tips being shared on his recently launched website Top Broker.
As brokers it can be easy to forget the immense value we offer to our clients – doing it day in, day out you might take for granted the fact that you are helping people secure their financial future, reduce their risk through smart structuring, provide insurance protection options and ultimately help increase their wealth. Sometimes we need to take a step back and remember; we are trained professionals and need to present as such! After all, over 50% of the lending market wouldn’t be using Mortgage Brokers if we didn’t provide such incredible value to our customers.
This week's feature has been provided by Amanda Fletcher from Shakespeare Home Loans. Amanda explains how she manages clients that take her services for granted – you know the ones, those ‘prospective’ clients that are complete time wasters! They have no respect for your time and if left unchecked are the ultimate tyre kickers. Let’s face it, we’ve all seen them from time to time but how have you managed them?
Depending on your structure some brokers promote the fact that they are a ‘free’ service and time-wasting clients treat them as such – use their professional advice and then go back to the bank direct completely cutting out the broker. Don’t worry, this can happen to the best of us but I believe if you manage the client correctly you can avoid the issue all together.
Amanda has felt this pain, worked out a way to manage the issue and seen immediate and impressive results! I’m not advocating every broker needs to start charging mandate fees upfront but I do believe you need to have frank and honest conversations with every new client from the very beginning so they understand the incredible value you are going to provide for life! So I hope you enjoy this week’s feature, and as always let me know your thoughts either via Facebook or email. Cheers, Joshua.
I had been losing deals from approval to settlements and had no idea what to do. In less than three months I lost over $4,000,000 of deals from approval to settlement. The hard work was put in and all they had to do was settle. I began to lose confidence and was disheartened. I realised that I had to change and that what I was doing wasn’t working.
What’s Your Niche
I quickly realised I was trying to serve everyone, being all things to all people, spreading myself too thin. I used to think that every deal was a deal, chasing it all day long but I now know that it’s the client I turn away that makes me successful. Identifying my niche and targeting it was the most freeing thing I’ve ever done. It’s allowed me to focus and direct my efforts like a laser because I knew which customers made me money and which I was wasting my time on.
My Value
Knowing my niche intimately has allowed me to understand what it was my customers were after. What were they needs, and how could I cater specifically to them. I started looking at ways I could create value to my clients, rather than just talk about rates, fees, charges and products. By being definite in my value proposition it’s allowed me to position myself as a professional trusted adviser rather than a free rates comparison service!
Customer Commitment
Once I knew my niche and how I added value to them my world changed. I suddenly released that my time is valuable and deserves remuneration. I realised that people only value things they pay for and not what they get for free. By charging my clients, I found commitment and loyalty increase dramatically.
I charge $295 to every individual client to engage in my services. I approach this subject at the end of my first appointment by saying;
- “I’m a professional and am very good at what I do and specialise in. You must understand that I am self-employed, so for the time that I invest into you I do need to charge a professional fee of $295. If you wish to proceed here is my invoice to proceed. You have 48 hours to pay this. Once you’ve paid this send me an SMS to notify me and will begin working for you.”
If they don’t SMS within 24 hours I call, and generally they pay straight away. Because of my new philosophy I was able to triple my submissions in two weeks compared to what I did in the whole of last month!! I couldn’t believe it.
This was not by seeing more people moreover by converting more customers from appointment to application. Furthermore for the month of May I settled 100% of all unconditional loans. This is the first month I’ve been able to do this which is incredibly rewarding.
To all the brokers out there. We all need to release that we cannot work for free and that we’re professionals. Niche, know your value to the client and get commitment. Together we change the status quo!
Amanda Fletcher is the Director of Shakespeare Home Loans.
This article originally appeared on Top Broker, a growing online space where tips and strategies are shared by Australia's top mortgage brokers.
