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Using collaboration could be key to increasing revenue, says Trail Homes’ Nick Young.
With the state of the market continuing to be in relative flux it’s natural to want to bunker down and hold on tightly onto ones’ turf (a.k.a. bury your head in the sand).
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Conversely, challenging market conditions are the optimal time to rethink business models - and in particular, how to increase revenue beyond the staples of assessing efficiencies, limiting expenditure and stabilising working capital.
Specialise rather than diversify
There’s an immense pressure on the industry to adapt to the current climate by diversifying their service offering, which by all means has its merits. Having said that, for many, it’s a daunting concept to upskill at a time when loans are often more complex due to tightening lending criteria coupled with housing shortages and fierce competition.
An alternate option to the popular diversification model is to accelerate revenue by becoming a true specialist versus jack of all trades and ‘expanding’ into adjacent product categories through strategic collaborations, or partnerships, with brokers with complimentary skillsets.
Whilst ‘collaboration’ seems to be the term de jour, genuine collaborations are an extremely powerful means to meet and exceed client expectations, increase leads and extend influence.
All the concept takes is a common goal and the commitment to band together with like-minded companies to create a solution that is greater than the sum of its parts.
While strategic collaboration can provide the foundation for a long-term advantage, its potential is materially affected by:
- Working to your strengths, identifying which types of loans dominate your books and what a typical loan looks like (i.e. residential loan of $1.2 million).
- Being able to pinpoint your buyer profile (i.e. couples in their 30s who are planning a family and/or have small children with a household income of $200K/ year, living in postcode area X).
- Actively promoting your milestones on Facebook and LinkedIn to build your profile. Gone are the days where building your business on social media is able to be placed in the too hard basket or that active self-promotion is taboo.
- Get into the habit of posting each morning with content that reinforces your strengths and buyer profile (to both attract similar clients and communicate to the industry where your specialty is).
- Make every win a milestone. Post when a deal closes, including specifics (obviously without any breaching privacy), communicate how you overcame an obstacle, co-celebrate in your client’s win, and so forth.
- Determining which lending areas are most complimentary to your speciality (i.e. asset finance, short-term funding, specialist lending, etc)
- Unite with brokers that specialise in complimentary services. To escalate this process, consider:
- Actively attending industry events. It doesn’t take long to work out ‘who’s who in the zoo,’ and nothing beats 1:1 interface to identify whether there’s an opportunity for alignment.
- Use social media to advise industry that you’re seeking to collaborate with specialists
- Announce collaborations, as well as specific wins to both company’s networks
We encourage the market to realise that opportunities come from relative chaos and to invest in staged growth plans – particularly in conjunction with an accountant.
We’re already seeing an uprise in opportunistic and transformative M&As in the form of acquiring competitors or merging with complimentary businesses.
If you’re in this boat, consider selling a portion of your trail book for an immediate ‘self-funded’ cash injection (without bundling your clients in the transaction) to facilitate the transaction.
