Rob Clifford is chief executive of Century 21 UK and group commercial director at Shepherd Direct Group
Recent research regarding the most important deciding factors for consumers when choosing a mortgage reflects something I’ve long since championed and that is the importance of brand when making such decisions.
The fact of the matter is that consumers take comfort in choosing a brand name particularly when it involves probably the most important (and largest) financial decision an individual is likely to take.
In the research, conducted by Wriglesworth Research, brand perception was deemed to be the third most important factor aspiring and current homeowners took into account, with over a third (36%) saying it was a deciding factor in their decision.
Only the level of the interest rate (74%) and the cost of the product fee (46%) were deemed to be more important, with brand perception actually considered more important than fitting a lender’s criteria (30%), how easy the application process might be (28%), professional advice (25%), a relationship with the lender (18%) and a consumer website recommendation (15%).
I suspect advisers might be slightly surprised to see their advice perceived as less of a deciding factor but you have to wonder how easy it is to distinguish such things as interest rate and fee from the advisers’ recommendation itself.
After all, it’s likely that many borrowers would not be in a position to make those decisions regarding rate and fee without the insight of an adviser. And certainly it appears ludicrous that ‘fitting a lender’s criteria’ is deemed less important given the borrower won’t be making any further decisions if they can’t comply with the lender’s criteria checks and policy.
However, what this tells us is that mortgage lenders who are perceived to have trustworthy and solid brands are more likely to jump to the top of the list when a series of mortgage products are compared. Whether consumers would be quick to discount lenders based on brand, especially if they are offering by far the cheapest pricing, is a difficult one to establish. I suspect the role of the adviser is critical here – they will be looking for guidance about the lender in question. What if the consumer has never heard of the lender which was often the case pre-2007 when there were any number of new entrants seeking business? Again, the adviser becomes crucial in terms of offering peace of mind but I suspect borrowers may often be persuaded to select a lender brand that they know, trust and respect, regardless of whether it is the cheapest on offer or not.
If brand is so important in the lending fraternity then the same must be true for the choices consumers make throughout the whole house sale process. Certainly, in the estate agency market, brand can be vitally important. A recent franchisee of Century 21’s chose us primarily because of the global brand recognition it could offer; he was seeing a number of larger agency chains moving into his local area and he wanted to compete with them brand-to-brand. What better way to do this than by joining the world’s largest residential estate agency organisation.
Of course big firms do not have the monopoly on positive brand perception and local advisory practices will know only too well that you can establish a trusted name at a regional level which delivers for you. It’s important to recognise the advantage having that brand can provide and then working to ensure everything you do feeds the brand you want to enhance.
In conclusion, the value of brand is clearly a significant consideration for clients when they are making the major decisions connected with a housing sale or purchase.
This is why firms of all sizes should engage with their own brand and the value it can generate.
Also advisers must recognise that, for many clients in many situations, price is not the be all and end all when it comes to decision making. Racing to the bottom in this sense is not a good business decision; advisers would be much better advised to focus on what’s important to clients and if they are able to continuously deliver quality here then they are likely have satisfied individuals whilst at the same time boosting their own brand value.
