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GOOD CUSTOMER service has always played a crucial role in the success of a broker’s service offering and by extension, of the broker themself. The introduction of regulation and licensing under the new National Consumer Credit Protection Act (NCCP) has made it more important than ever.
Under the Act’s provisions, brokers are legally required to provide their clients with the most suitable product for their needs. In addition, they are required to explain exactly why that product is the most suitable.
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But above and beyond the legal obligations they need to meet, quality brokers realise there are compelling business reasons to offer good service.
The cost of client acquisition is growing year on year. Brokers increasingly have to pay for leads, referral partnerships and, in some cases, spend money on online advertising.
Generating new business opportunities is now a very costly task, which is why it pays to offer quality service. Doing so will go a long way to helping a broker secure both repeat and referral business.
And it’s absolutely crucial to remember that those with the highest level of client retention are the most successful in the long term.
But retaining clients is not just about safeguarding a trail book. Client retention can help brokers provide a diverse range of products and develop a strong flow of client referrals.
In terms of remuneration, many lenders offer monetary rewards for client retention in the form of step trail.
NAB introduced a step trail commission structure back in 2007 which has proved very popular with brokers. Now in its fourth year, the lender is paying brokers 35 basis points, in sharp contrast to the nil trail paid by some lenders in their first year.
Of course, there is no ‘golden rule’ for retaining clients.
Different brokers are bound to employ different methods.
Those with a smaller database of clients may choose to make regular phone calls, while others may communicate via web-based solutions including newsletters and blogs.
The bottom line is this: If client retention is an area of your business with which you have struggled in the past, now is the time to speak to your aggregator to see how they can help you.
The key is to be pro-active. The more pro-active you are, the more likely you are to retain your clients in the long term.
