Generating business is a challenge for most industries. In the competitive mortgage market, developing business is particularly tough and often requires significant investment which eats into profits or drives up costs.
With a finite amount of business to go round, we need to attract a constant flow of clients or risk our businesses grinding to a halt. New customers are the lifeblood of the property and financial service industries – they are essential to maintaining business levels and creating growth and profit.
It goes without saying that the best source of new clients is through recommendations. These come with no strings attached and are the positive fall-out of good customer relationships. But key to survival is to constantly explore a wide range of opportunities for new revenue streams. Nothing should be ruled out, even if it comes with a cost attached. The trick lies in getting the balance right.
Introducers come in all shapes and sizes – solicitors, accountants, estate agents, unions, sports clubs, supermarkets, local businesses – and the pros and cons of each usually depend on the brands involved.
Linking up with top flight sports teams and having access to their fan bases sounds fine in principle but most brokers would trade that for a more intimate relationship with a local business.
How do I pick the right introducers
By choosing to work with you, an introducer is paying you an enormous compliment. They respect your work and are trusting their reputation to you as they have endorsed your service to their clients and contacts.
As well as the chance to benefit from your professionalism and customer service skills, the introduction establishes them as a one-stop shop for clients’ financial needs, however niche, because they can open the door to services. But just because someone wants to introduce business to you doesn’t necessarily mean you have to work together.
A business relationship with an introducer is a two-way thing so it is important to determine who you will be working with and whether you share similar goals and brand values. The introducer will want to be rewarded for the introductions they make, either financially or reciprocally by you introducing your clients to them.
If customers are happy they will come back for second sales and of course, there are additional sales opportunities down the track. Generally speaking, clients shop around for advisers until they find a good fit and the endorsement of a service provider already on their wavelength will stand you in good stead.
Once this happens the relationship can bear fruit for all. Clients have changing financial needs and savvy brokers will be able to tap into these.
The benefit for advisers of using introducers is that they provide a reliable source of sales leads. Conversion rates from leads to sales is somewhere between 55% and 75% so a good relationship with a lead generator is worth investing in, as long as it is carefully managed.
Leads are typically bought for between 25 and 50 each, although there is often a stipulation to buy a minimum of 10 leads for a set timescale of around three months.
Other models can include sharing proc fees, splitting the life business commission and doing a deal on a percentage of the business conducted over the next few years.
While recent developments in the mortgage sector have made things tougher, there is a new generation of players entering our market, from supermarkets and Home Information Pack providers to new lenders. All of these can provide lead generation opportunities for switched on brokers.
On the flip side, using introducers can be a costly way of doing business and does not guarantee returns. We can spend a lot on marketing our businesses with- out knowing if there is any payback.
Are there more cost-effective ways of bringing in new business?
We need to make the most of our existing client banks to reap the biggest rewards.
It’s time to search your client database and identify your self-employed or corporate clients. Target them with a marketing letter showing how you can help them raise the capital for new premises, home improvements, their next home or even a place in the sun. This will cost you little in time and money and if nothing else will get your name refreshed in their little black books.
Calls coinciding with anniversaries such as birth- days, Budgets or two years since the last remortgage will not only maintain relationships but also serve to remind your clients that you are always on hand and ready to deliver the goods.
This sounds trite but it forms the basis of most business development training classes. Knowing your clients and anticipating their needs are the surest ways of retaining and building your business.
How to find good introducers
- Draw up a list of the businesses you respect and then approach them with your pitch for providing a service for their staff or clients.
- Interview potential introducers as you would new recruits.
- Agree the terms of the relationship, especially how the introducer will be rewarded for introductions.
- Look for an introducer that can offer a regular pool of potential new business leads.
- Agree to pay on completion of new business, not for the introductions themselves which may not lead to any business.
- An introducer must be committed to promoting the relationship with its staff. Holding a launch evening is a good way to kickstart a business relationship.
Back to the future for sub-prime
A banking executive recently blew the whistle on banks’ irresponsible lending practices, calling for laws to curb banks that neglect their duty of care.
As big international banks brace themselves to enter the sub-prime arena, we shouldn’t be surprised that competition in the sector is beginning to hot up. One sub-prime lender has already announced it is increasing its income multiples to 5 x and offering 90% LTV deals.
In the 1990s, clients who should have taken the prime lending route found themselves drawn into taking attractive deals offered by sub-prime lenders. Is history about to repeat itself?