Mortgage broking is, and always will be, a people business. It doesn’t matter how important technology becomes in the mortgage application process, clients will always come and seek your advice because they prefer to hear sage words of advice from a knowledgeable person, rather than being presented with a bland and impersonal screen full of data by a computer.
When recruiting new staff, I have no doubt that excellent interpersonal skills are top of your list of priorities – and so they should be. If staff have the ability to get on with people, they are already two-thirds of the way to being successful, before they even attend their first financial training course.
Take a look back at all the new business you have won during the last year and ask yourself why it came your way. Although some may have resulted from advertising or lead generation exercises, I bet the majority was via the tried and tested route of networking. You know, satisfied clients recommending new clients, friends and family passing on your details to their friends and family, other local professionals such as estate agents, lawyers and accountants giving your details to their clients who are seeking advice about mortgages.
Networking is arguably the most important new business tool that any financial adviser possesses, and yet most advisers leave networking to chance, rather than adopting a methodical and structured approach to the task in hand.
Focus and attention
Although networking may be instinctive to most mortgage advisers, very few give this important discipline the focus and attention it deserves. It’s probably because there is a subconscious feeling that networking is really being a bit cheeky; imposing on people and asking favours. The reality is that nothing could be further from the truth. Most people are actually very pleased to be asked to help and are more than happy to pass on your details to others who may benefit from your services. Likewise, other professionals are often as grateful as you are to forge links with other local professionals. If, at the end of the day, your proposition is not of interest to them, they will simply say ‘no’. There is, therefore, absolutely no harm in asking the question.
Let me illustrate how important networking is by using a few statistics. If I asked you to sit down and write down the name of everyone in your contact book that you would feel happy to pick up the phone and talk to, how many names do you think you would have? 100? 200? 300? Let’s be conservative and say 100 (which, I suggest, is being ultra conservative for a financial adviser). Now let’s assume that each of those people also has about 100 contacts in their address book who they would feel comfortable talking to (not an unreasonable assumption for an average adult). You are, therefore, immediately no more than two phone calls away from a network of 10,000 people. If each of those people in turn knows 100 people, the size of the network immediately increases to one million people.
Think about it. That’s one million people who are within three telephone calls of you at this very moment. To reach a million people via other marketing techniques would involve national press advertising or TV campaigns, which would cost tens or even hundreds of thousands of pounds. Three telephone calls will cost you a matter of pence. Makes you think, doesn’t it?
OK, you’ve spotted the obvious flaw in my hypothesis. Not everyone is going to be compliant and pass on the good word to everyone in their address book. It doesn’t really matter. The truth is that you couldn’t manage enquiries from one million potential new clients anyway, so even if your network is only 1 per cent efficient, you still have 10,000 potential clients you can communicate with, all of whom can receive a personal recommendation from someone they know and trust. However you analyse it, networking can be a very powerful marketing tool.
‘Working’ your network
Your next challenge, therefore, is to work out how you are going to ‘work’ your network. You could set yourself the task of phoning at least three people every day to ask if they would be willing to recommend you to people they know who would benefit from your services. That would be 15 people in a week, or 60 in a typical month. Not a bad start.
If you have staff, you could task someone with the job of working your contact database (being mindful of course, of the FSA regulations regarding cold-calling. If, however, you have obtained your clients’ permission to contact them, there is nothing wrong with making such calls). It is worth preparing yourself for those clients who say they would be more than happy to spread the word. Prepare a fact sheet about your business – a simple flyer that you can send to them to be handed on.
Think about how you can incentivise them to pass on your promotional flyers to their contacts. What would a successful new business introduction be worth to you? £20? £50? That’s a case of wine or a useful M&S voucher, which would certainly make me think about recommending someone who I believed offered an excellent service.
There is nothing new in this. Networking has been about for donkey’s years. Unfortunately, we are all guilty of occasionally missing the obvious, in our continuous hunt for a new solution to an age-old problem.
Lead generation
At Mortgage Next, lead generation is one of the most frequently asked about issues by brokers. I have spent a lot of time vetting lead generation companies on behalf of our members and our compliance team spends hours approving promotional adverts. It does make me wonder if brokers are capitalising on the new business opportunities that are under their very noses and which cost nothing, before spending hard-earned cash on marketing activities destined to generate only small response rates.
If you haven’t done so recently, sit down and have a good look through your contact book. It could be a very profitable exercise.
Justine Tomlinson is marketing director at Mortgage Next
