We are all a bit fickle in our own little way. Being a West Brom fan leads me to suffer ups and downs that most people shouldn’t have to suffer but through it all I still remain true to the cause. However, this isn’t because of the results we get or the joy it brings to watch the side in action, it is simply a thing that I was born into and come rain or shine it is a burden I will carry with me to the end of time [as a Leicester City supporter, I sympathise! – Ed].
I am being particularly melancholy because of the Baggies’ current predicament as the strongest side in the Premiership – propping up the rest! But, when it comes to business, both from a distributor and broker perspective, clients are far from forgiving if the standards of our services slip in any way or if we take our eye off the ball for a moment.
I can’t help my loyalty to my football team but in terms of car insurance, holidays or even purchases from my local supermarket, if I don’t get the service I demand then there are plenty of others willing to take my custom and I’m willing to give them a chance to keep it but only if the price, service and end product is right. The mortgage market is no different and if our customers, from whatever arena of the industry, are not receiving the service or products that they require then they too will start to look elsewhere.
Statistics
I read recently that statistics show it is typically five times cheaper to retain a customer than acquire a new one. Furthermore, a single disgruntled customer may tell up to 12 other people about their concerns, thus causing real damage to a brand. In terms of brokers trying to retain clients it is slightly different and certainly not as expensive but the theory isn’t too far from the mark. Fortunately for brokers the opportunity to retain clients remains firmly in their own hands, provided if the relationship has been developed as it should in the first place.
Unfortunately during the boom period when brokers had a constant tide of new enquiries and business stacking up to be written it is fair to say that such relationships may not have become as strong as they ought. Hindsight is a wonderful thing. Harking back to ‘the good old days’ after providing the initial mortgage advice brokers were not too concerned about cross-selling or even losing their client after a couple of years because over the same period of time they had a stream of new clients beating down their door. There was a somewhat natural, during that climate at least, short term focus on turnover rather than long term view of the importance of client retention. As a result the sales process became one-dimensional and the will to cross-sell lower level products and services was outweighed by the hefty proc fees accrued by pure mortgage business. Of course this is not the case for all. The better brokers always acknowledged the need for regular client contact and as a result when times became leaner have a stronger and more loyal client base with which to work. Yet all is certainly not lost. A good business will always learn from their mistakes and adapt their procedures accordingly.
Opportunities
It is currently hard work to trade in the mortgage arena but there remains opportunity out there via a host of ancillary products such as debt solutions, protection and secured loans amongst others. Looking on the positive side there has never been a better time to sit down with existing clients and explore the range of potential opportunities. Working existing databases should be the prime objective for brokers who are struggling with current market conditions. Be proactive – within regulatory and cold-calling boundaries of course. Intermediaries should be in a position to offer a range of services and work databases to open the possibilities which may lead to existing clients becoming new clients in different market areas.
It is vital for any business, large or small, to constantly evaluate themselves, their goals, their business model and the market in which they are operating in order to ensure that sound business fundamentals such as efficient and fully-maximised sales processes are working effectively.
Remembering to implement the simple things can prove invaluable to service offerings. Even something simple, which might once have been second nature, could prove the difference between providing a professional service and a not so professional offering. Building a relationship is key to retention. Something as simple as diarising all clients’ important dates such as birthdays, anniversaries of moving in and then sending a card provide not only a personal and memorable touch but may also jog a few memories for clients to get in touch regarding other potential services. Regular contact via a client newsletter could also be a good way of maintaining regular contact and alerting clients to market changes and new products/services that have come onto the market.
Client management
Brokers should also look at the ways a good client management and back office system can help them look after their clients needs and boost efficiency. Such systems have evolved in a similar way to those sourcing engines that have developed to become more than the simple reference tool of old into relevant comparison tools that can save valuable time across a range of sectors and become a key component in the sales process. Client management systems are undergoing a similar evolution as the need to manage existing clients, improve efficiency and follow regulated and documented sales processes becomes of paramount importance.
The world of sales should essentially follow a string of basic elements. Indeed, the analysis of many sales organisations shows that high sales performers follow consistent and routine systematic tasks to drive sales performance. There is no magic wand or formula to generate sales.
Concentrating on offering top quality advice can result in a host of opportunities presenting themselves through a manner of other future services and referrals. As illustrated earlier, nothing speaks greater volumes than a satisfied customer recommending a firm to a friend, colleague or relative except maybe the dismay of a dissatisfied customer.
Fundamentals
In order to make the most of this potential it is vital to get the fundamentals right first time when it comes to the sales process. Something simple, that might once have been second nature, such as having the website/quotation/application systems open on your computer system or even having passwords ready to hand can be the difference between providing a professional service or a slightly amateurish one.
Revisiting a fact find to capture all the good and relevant questions can also be of great assistance with a follow up call. A thorough fact find will provide a solid platform from which brokers can sell a range of other products. For example, the conversation could lead to questions regarding the reviews of personal pension provisions, the condition of a will, health insurance requirements and so on. Selling several products which will all have different anniversary dates provide the perfect opportunity to establish regular contact therefore building a closer relationship and furthering any opportunities that may arise. Becoming known as a broker that gives advice on a selection of financial matters other than just mortgages can open up a whole new plethora of interest amongst clients and, as mentioned, word of mouth amongst friends and family.
Despite current conditions there is still a great deal of support in the market particularly for directly authorised firms in the form of trade bodies, mortgage clubs and a number of outsourcing opportunities. Flexibility and the freedom of choice are key to directly authorised offerings and such firms remain in prime position to explore new sectors and develop relationships with high quality business partners in order to gain access to additional income streams.
Brokers that take clients’ wider financial needs seriously will undoubtedly place themselves in a stronger position and this cross selling will not only generate attractive recurring revenue but also help turn them into a one-stop shop for clients.
