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ISCOVER
Whenever a new lender or potential business partner talks to me about who owns the customer, I roll my eyes.
The expression itself is so widely used, which is bewildering, as it is a truly meaningless statement.
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What does ‘own the customer’ mean?
For another party to make such a claim infers that I would own the customer relationship, and they do not. This in turn means that in their mind, the client can only have one relationship with one party – either me or them.
For example, if I introduce a new borrower to Bank A, I continue to have a relationship with the borrower. But now the bank has all of the borrower’s data, and they also have a relationship with the borrower as well. So now the client has two relationships, whereas before the borrower only had one.
Maybe the lender means that, in the event of an enquiry for future borrowings, the borrower will always be referred back to me as the originating broker. But then, how would I know if that was done or not? Am I supposed to just place the opportunity for my own future income in trusting that each one of the bank’s thousands of staff are all doing the right thing? If so, just trusting doesn’t work for me. So if the lender really means this, the solution is easy – simply insert a clause into my broker contract that states that you will pay me, irrespective of whether I originate any second or subsequent loans. If you are unwilling to do that, don’t even think about talking to me about owning the customer.
If there is any real value in owning the customer, it is in owning their data.
This is where lenders are really happy with the broker network. The broker goes to the effort of preparing an application, preparing the information and collecting support documentation for verification.
The lender really has no loss here. If the loan is approved, then they have a new customer which they will profit from for that particular transaction, but also which they can market and cross-sell to for additional products. If the loan is declined, the bank still has all the details of the borrower applicant. This is not a merely a lead – this is a lead with a full financial profile. The bank can now identify opportunities for the customer to open a savings account, perhaps offer them a credit card, offer to refinance a car loan, offer investment advice or whatever – all because I have taken the one or two hours to provide the information – and I as the introducing broker am not paid a single dollar. I wish I could have a business like that, where I could get fully profiled leads for free.
If you’re a lender and want to talk to me about owning the customer, get serious and offer me a commission for every product sale that a customer takes up in the first 24 months they are with you. They are only with you because I introduced them, so it only seems fair that you pay me for the opportunity I have given you to market to them directly.
In addition, I think I also deserve a reasonable commission for product sales to this same customer over the next 24 months, even if the initial loan is not approved. You have a full financial profile of new potential customers that you can market to directly. That is an asset, so pay me for that asset. That only seems fair, right?
