New clients have always been considered the lifeblood of any business, but as intermediaries in today’s market are discovering, it is not a channel they cannot afford to rely on exclusively.
Many would say that getting new borrowers through the door is often difficult and time-consuming. With fewer buyers in the purchasing market, the issue is heightened, and the importance of existing customers should be acknowledged.
For established intermediaries it can be tempting to sit back and hope that existing client referrals are sufficient to keep business ticking over. Newer companies can be engrossed with setting up and surviving their first few years, and active marketing very often takes a back seat. Both of these approaches can prove to be mistakes.
Marketing will not replace substance and firms cannot expect to conjure thousands of clients out of thin air at a moment’s notice. However, they can expect a well-thought-out marketing effort to deliver significant ongoing benefits that can reimburse time and money spent many times over.
Setting a brand apart from the rest
The problem with many marketing attempts is that they are not sufficiently well researched. If brokers don’t investigate their target market, they can instead deliver generic material that does not generate the required interest.
As such, it is deemed a failure, future plans are postponed and marketing efforts die out all together. After all, if a business continues to tick over, why should it push hard for new clients?
Marketing needs to set a brand apart from the rest. While the concept of a ‘brand’ may not immediately resonate with a self-employed broker working from home, it is an important part of their strategy.
Marketing activity needs to demonstrate what it is that they are doing that is so different from others in the market – without this, it’s an uphill struggle.
Looking back over the last six months should provide ample reason for the need to keep marketing high on the agenda. Trading conditions change incredibly quickly and during the good times, businesses should be reinvesting some of the revenues they generate into improving the business, safeguarding the future, winning new clients and maintaining relationships with existing patrons.
However, not all intermediaries seem to agree and, according to research carried out by BM Solutions, 48 per cent of intermediaries who have been in business for over 10 years carry out no marketing whatsoever.
Clearly this sector of the market feels it has a steady client base, and relies on referrals to replace clients lost over time. It may also be that these firms win business based on reputation and others will find them purely by chance.
However, undertaking no marketing at all is a risky strategy. If there is a downturn in the number of people coming in, or a significant number are lost in a short period of time, it is difficult to generate replacement business immediately.
Trial and error
For marketing strategies to deliver, firms need to think them through and some trial and error is needed in the beginning. Does an advert in the local paper bring results? Has it been properly followed up? Could e-mail be used to better effect?
John Wanamaker’s quote is well versed in marketing: ‘Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.’ A witty quote with real implications – without a clear evaluation, how do you know which activity is haemorrhaging your marketing budget and which is giving you bang for your buck?
Brokers who have never pursued a marketing strategy and consider it a complex art should be reassured that basic changes can make a difference.
Something as simple as revamping a shop-front can be a good start, and well-placed advertisements in the local press or even the Yellow Pages can be incredibly effective. However, firms will not know until they try.
Brokers need to have conviction in the value that they add – demonstrating what it is about their service that puts them above the rest. Whether it’s by advertising the scope of advice they offer or by highlighting new services, brokers need to identify the messages that will attract clients.
At the moment the average intermediary spends £1,598 a year on marketing, according to the research carried out by BM Solutions. This equates to just £133.17 a month. The amount that firms spend is not all that is important. It is the effort and thought that goes behind the spend that will make the real difference.
Is this money siphoned out of the business account to pay for the same old advert in the local directory every month? What other publications could be used? Is there a better online alternative? What about working with local firms to establish partnerships?
If firms are going to spend what are essentially small amounts of money, then they need to be squeezing every ounce of performance out of that investment. Otherwise it really is wasted.
Targeting existing customers
Clearly making the most out of existing clients is a vital part of any broker’s strategy. Brokers need to ensure that they maintain a quality and compliant database, so they can effectively target their existing customers with timely and relevant messages.
This may even be as simple as a diary reminder to highlight customers whose products will be coming to an end in the next few months. However, this structured approach can add a great amount of value to marketing efforts.
Although this may not seem at the top of the list in challenging market conditions, they should be paying even more attention to sourcing channels of future business.By getting these things in place now, it can help a steady return flow of clientele in two or three years’ time.
Existing clients can also prove to be an incredibly effective marketing tool. Our research demonstrated that almost 50 per cent of intermediaries’ business came from existing client referrals.
However, it is important that brokers do not get complacent about this element of their business. They should not forget to prompt possible referrals by asking for them. Something as simple as a casual comment to a departing client can make them think of referring a friend and this can make all the difference.
It is also important that once intermediaries have a client in front of them, they offer them the widest range of services as possible. Even in cases where a client is looking for a service an intermediary might not offer, it should be possible to refer them on to a third party and still earn a fee.
Taking time to establish links that mean all of a client’s needs are catered for will be time well spent over the long term. This is especially true given that putting these links in place and maintaining them costs nothing in today’s online environment.
The vast majority of businesses have the opportunity to improve results from a refreshed marketing strategy and a dedicated effort to increase the sales they make to each client.
Taking the time to think things over and go through some trial and error will pay significant dividends. Many may feel they do not need to make such efforts given that their business has done well in recent years.
This would appear a dangerous approach to adopt, given how quickly things can change and how little financial investment is actually required.
Time and thought are the key issues and most of us have a few hours a month we could better spend in this area if we really made an effort. In today’s market there’s no time like the present.
