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Brokers are being urged to avoid linking refinancing to terms like “savings” when marketing it to clients, as it implies that they may have to make sacrifices.
Marketing strategist and founder of Purple Thread Marketing, Darrell Weekes, has said that while brokers are writing record volumes of refinances, they should be wary of how they’re framing the narrative around refinancing with clients.
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Speaking to The Adviser ahead of his session at the New Broker Academy 2023, Mr Weekes flagged that refinancing can have negative connotations for borrowers and therefore underscored the need for brokers to nail their marketing strategy.
“The term conjures up all sorts of emotions for clients who don’t work in the mortgages and finance industry,” Mr Weekes told The Adviser.
“They hear the word and they think: drama, problems, issues, and pain. And they think that it involves a lot of extra work.”
He encouraged brokers to avoid slogans like “refinancing can save you thousands”, as this suggests that clients must make sacrifices.
“This is why people in the health industry use terms like ‘eating plan’ instead of diet, because people hate diets,” he said.
“Refinancing and savings have the same connotations. But if you can get across the message that it’s an easy process that will put money back in the pockets of borrowers, that will connect with people.”
How to make refinancing appealing
Mr Weekes said he recently spoke to a broker whose website slogan was about saving clients thousands by refinancing. However, he said the broker was not generating many responses from borrowers.
Instead, the Purple Thread Marketing founder advised that the broker pitch an alternative headline: ‘If you think your bank is ripping you off, you’re probably right’.
“The broker hesitated because they thought they couldn’t say that,” Mr Weekes continued. “But I said we can because the Australian Consumer and Competition Commission (ACCC) published the Home Loan Price Inquiry report in 2020, which found that lenders have been charging more for existing customers than new customers.
“We now have empirical proof that if you think your bank’s ripping you off, you’re probably right. That headline connects better than saying borrowers could save thousands by refinancing.”
Indeed, the final ACCC report — released while the Morrison government was still in power — found that there is a persistent lack of price transparency for mortgages and that lenders were often charging higher interest rates to existing (back book) home loan customers.
The ACCC also found that, as at September 2020, borrowers with home loans between three and five years old paid on average around 58 bps more than the average interest rate paid for new loans.
Constantly connect with clients
The key to marketing broker services, he said, is to first determine the target market and then create a message that will resonate with that market. (At the New Broker Academy in June, Mr Weekes will expand on how brokers could build a marketing campaign on a shoestring budget and offer tips on how brokers could leverage their existing network to win new business.)
A broker’s existing client base is a treasure-trove but only if the broker contacts them on a regular basis to inform them of any changes that could impact their home loans and conducts annual reviews, Mr Weekes continued.
“Borrowers don’t tend to go back to their original broker for refinancing, because they would’ve forgotten the broker’s name,” he said.
Mr Weekes urged brokers to mine their existing client base for business instead of searching for new clients.
“There’s more business in most mortgage brokers’ trail books than they know,” he concluded.
To hear more from Darrell Weekes about how to become an expert at marketing on a budget and win business, come along to the New Broker Academy 2023.
It will be held in the following locations:
- 15 June at Rydges South Bank, Brisbane, Queensland
- 20 June at Crown Promenade Melbourne, Victoria
- 22 June at Montage, Lilyfield, NSW
Click here to register for free and don’t miss out!
For more information including agenda and speakers, click here.
[Related: ‘Hive’ of refi activity a boon for new brokers: FBAA]
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