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ISCOVER
While fluctuations in the market are beyond your control, a strong growth strategy is still encouraged.
THERE ARE four business growth strategies that every broker can implement right now.
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They involve increasing leads:
- by acquisition
- by broadening referrer networks
- by targeted marketing
- by increasing the services offered
ACQUISITION
As our industry matures (along with those within it!), more and more brokers will plan to retire and leave. For entrepreneurial professionals, there are opportunities to acquire these businesses and significantly and rapidly increase the size of their business. Purchasing businesses and loan books for less than ‘two times trail’ is a bargain if the seller is leaving and the buyer has the business systems to connect with the newly-acquired clients.
Think about what brokers really like about their business. Trail income is an obvious one. Some people exiting the industry will be more interested in another broker managing their clients and sharing the trail income over a specific ‘acquisition period’.
This may have more favourable tax implications for the seller and lessen the risk for the buyer.
BROADENING YOUR REFERRER NETWORK
If you are like most broker businesses, you are probably comfortable with one or two productive referrer relationships. This year, however, is an opportunity to double your numbers. Ideally, you will target professions outside your current network but more importantly, you will focus on companies or individuals who share the same business values and thirst for growth.
If you are thinking of expanding into SMSFs, commercial lending or equipment finance, it makes sense to target professionals already in the space.
The main thing to remember about building referral relationships is that it’s easy to get people to agree to refer business to you; however, it’s difficult to get people to actually refer that business to you.
TARGETED MARKETING
A regular newsletter sent to clients does not constitute a marketing campaign. This is especially true when the newsletter doesn’t mention the services you offer, doesn’t explain what differentiates you from the rest and doesn’t have a ‘call to action’.
There is nothing wrong with sending out newsletters; it’s just that often the message is so generic that they have little impact.
A genuine marketing campaign will keep your clients informed about your business and services and offer tips on how to pay off their loan quicker or develop wealth building strategies. You will be remembered and valued for these things! Your message should also come via several channels: email, phone calls, social media, letters, etc. And the shorter the message, the more likely it is to be read.
INCREASING THE SERVICES YOU OFFER
If you are truly an ‘adviser’ – rather than just a ‘lending expert’ – one of your business’ KPIs should be the proportion of clients with two or more of your products.
If a client trusts you with arranging their home loan, why wouldn’t they trust you to arrange their car finance, insurance and other services? The banks have been doing this for years (and have researched it too) because they know a client who has more than one product with them is less likely to leave them than ‘single product clients’ are.
This strategy should be obvious, and you will achieve greater revenue per client, greater profitability and increase client retention.
As always, all you have to do is decide which strategy is right for your business and then implement it!
Doug Mathlin is director at FrontRunner Consulting Group
