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Thirty-two per cent of brokers consider competition as the biggest hurdle to business growth, according to the recent trail book opinion survey conducted by Momentum Intelligence.
This is compounded by the net population of brokers continuing to outpace growth in new lending, which materially increases the pressure to work harder, smarter and more efficiently than ever before.
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Having said that, the upside is that despite housing prices being at a record high, the Australian dream of owning a home is still alive and well.
Here are some tips of how to beat the competition in a crowded market:
- Monopolise on natural attrition: Turnover in the broker population remains quite high. In addition, 34 per cent of the market in the last six months either hasn’t written a residential loan or has only settled up to $1 million of new loans. This provides an immediate opportunity for proactive brokers to naturally increase their share of business.
- Become a big fish in a small pond: Be specific about your market and identify your niche. Among many variables, this can be determined by your product/service offering, client profile and geographic area. There are multiple upsides to this approach:
- You don’t have to be big to be dominant — which is good news for the 57 per cent of the industry who are one-to-two-person operators.
- The market respects, and seeks, specialist services from "experts" versus generalists.
- Marketing is less complicated and expensive when you’re targeting a niche.
- It’s all about me: And when we state "me", we’re referring to the client. Invest in truly understanding your clients’ needs, wants and aspirations, and be a financial solution provider that deals with the immediate opportunity, gets them out of a bind and helps them realise their future goals. In other words, clearly define who your customer is and what’s important to them, then make sure they know that you can provide the solution to address their challenge or opportunity.
- Become the master of retention: Be wary of the trap of constantly seeking new shiny clients. Treasure the clients you have and ensure you have a CRM or equivalent system in place to make sure you have regular contact — and keep it personal. Where possible, steer away from mass email blasts in favour of custom correspondence and phone calls.
- Be proactive with your wins:. Educate your market. Keep your website up to date with common scenarios, testimonials, product/service updates, etc. Make sure these are also communicated on social media regularly. This approach keeps you both front of mind for existing clients and enhances your credibility for prospects.
- Keep it real: Set targets, measure your performance, break down your operations and pinpoint weak points in order to identify exactly where they can be improved.
- Actively learn: Take the time to read industry publications, go to events and commit to bettering your skill set and your business.
- Make innovation your best friend: Change is the only thing in this world that is permanent. Innovation makes your service more appealing to customers and harder for competition to follow. Be open to new entrants and embrace their offering, as it’s easier for earlier adopters to get the edge.
- Diversify: Extending your product/service offering materially increases the ability to be a true solution provider. Choose a growth area, like commercial or SME funding. If you’re unfamiliar with the sector, contact the lender’s BDM.
- Convert passion to revenue: Make sure you’re doing what you love. Passion and enthusiasm is infectious and, in turn, will aid sales.
Reference: MFAA Industry Intelligence Service Exclusive Finance Broker Benchmarking Report (1 October 2016 – 31 March 2017).
