View more on these topics

The pursuit of inner harmony

This issue is about teamwork and working towards common goals. To achieve this effective, three-way internal communication is key (up, down and across).

With reference to the author&#39s comments about brokers, I often hear it said that there are over 4,000 mortgage products on the UK market at any given time, so perhaps consumer choice in the mortgage market has gone a step too far. This has led some lenders to go full circle and actually reduce the size of their product range and to start advertising the fact to the consumer as a benefit. Lenders&#39 advertisements along the lines of &#39less is more&#39, &#39we take the hassle out of choosing a mortgage&#39 and so on are becoming the norm. Given that the consumer simply wants to buy the home they want and sees choosing a mortgage as an irritable chore that they must do to realise their dream, lenders&#39 marketing people seem to be adopting a sensible approach.

Although this will have an impact on the mortgage intermediary, the result is likely to be a change in how they communicate with the consumer rather than to reduce or eliminate their value in the chain. After all, even if each lender reduced their product range to, say, four, the consumer will always need advice about which of the four is most suitable and which lender they should apply to. So with reference to the extract, here we have the operations people, i.e. lenders, reducing consumer choice and the sales people, i.e. brokers, still having a key role to play in advising the consumer. The customer also benefits from less choice but still needs choice and guidance.

The sales and marketing teams in most organisations are focussed on choice and flexibility so that they have an attractive range of products or services to meet the needs of their target audience, and they want to sell as cheaply as possible to maximise sales. So the marketing department wants short lead times and huge variety, while the operations guys want long lead times and limited variety. Operations actually need to design the choice and make sure the products and services work. Conflict can arise because each function is compensated differently. Operations executives make their money on cost reduction, not volume. Marketing and sales people typically have a remuneration package linked to sales in one way or other. It&#39s about good communication and teamwork and working towards common, company-wide objectives.

To address these issues, strong leadership from the top is required and good internal communication between the departments. Many difficulties companies have with customisation relate to how clearly the company understands its business. For example, all staff should be trained around the company&#39s vision and mission that covers mutual aspects such as quality and reliability – it&#39s about creating a common understanding. A mutual understanding across the company of both the true cost and the value of its products and services is essential for all internal functions to work in harmony.

The full article from which this extract was taken also makes a good point about understanding your customers to avoid internal conflict. The authors say: “Companies with a high level of operational efficiency often have a clear sense of their most desirable customer. For instance, Dell does provide a lot of value, but if you don&#39t know a lot about computers and you don&#39t want to wait two or three weeks, it doesn&#39t want to do business with you. Southwest is another company whose operational efficiency is driven by a clear idea of who its customers are and the kind of value they are looking for in an airline. If you feel that you want to be called by your first name and you want an assigned seat and you want to be part of a frequent flier club and so on, Southwest says: &#39Sorry, you&#39re not our customer&#39.

So, internal conflict between operations and sales and marketing can be addressed. The key issue is teamwork and clear and effective three-way communication driven from the top down.

Recommended

Online auction bids flood in for Beckham&#39s boot

The highest bid so far for the replica Adidas football boot – the type Beckham wore when he scored that penalty against Argentina in World Cup 2002 – signed by the player himself is now £940. You still have a chance to get your hands on this extraordinary memento, which has been box-framed along with […]

GMAC-RFC enhances non-conforming mortgage range

GMAC-RFC yesterday announced details of its enhanced non-conforming mortgage range. Rates start at just 5.24%, with a choice of competitive discounted and fixed rates that are available on a status or self cert basis. The range was designed after careful analysis of market data that showed that borrowers have a wide range of varying levels […]

Fees proposal will expose networks as money machines

From Michael NorwoodI would like to make any brokers who are intending to go for direct authorisation aware of an important consultation paper, CP04/9, to which the FSA is inviting responses. This paper is proposing that any brokers who fall into the minimum income bands in both mortgage and general activities, i.e. under £100,000, are […]

Oxygen Home Loans launches into branded lending market

A branded lender has announced its launch into the UK mortgage market in partnership with Mortgages PLC. Oxygen Home Loans is a new trading division of the Leicester-based Oxygen Mortgage Group (formerly Custom Made Mortgages). Oxygen Home Loans products will be focussed on specialist product areas such as sub-prime and self-certification. Building on the relationships […]

Why your clients need some tough love

In any relationship that matters, professional or personal, you should be upfront with someone if you think they’re making a decision or doing something they might later regret. Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship. So how does this […]