Referrals and word-of-mouth marketing form the backbone of most mortgage broking businesses.
Which makes a mockery of why regulators and Royal Commissions cannot get their heads around commissions and the conflict of interest issue. Why is it that the mortgage broker share keeps increasing? At the most recent MFAA report, the market share for mortgage broker sourced mortgages has increased to 59.7%.
The reality is that mortgage brokers only become successful if they focus on the customer. There may be inherent conflicts of interest or commissions from some lenders that are higher than others, but if the broker wants to become successful, they must put their customers first. And when that happens, those mortgage brokers will generate more referrals and repeat business.
The corollary is that those same referrals ensures that the customer’s best interests are looked after first. Because if those same customers are not looked after, they will not be giving referrals to you.
And on the evidence of things, more customers are seeking mortgages from mortgage brokers.
As a mortgage broker, how do you set up your business for referrals and repeat business? Here are my top 3 tips.
Keep in touch (KIT)
It is a no-brainer that communication is the most important factor in good customer service. As brokers we must communicate with our clients regularly before, during and after the loan submission process – even when no new information is on hand.
Keeping in contact with your customer means that they will feel less stress or worry, as they will know that you are looking after their interests. There is nothing worst than a client worrying about what is happening to their mortgage – especially during the loan application period.
As a broker I would call my client to keep them up to date. Even if the call was to say that we haven’t received any news yet from the lender yet.
And ongoing contact after settlement is where the source of most referrals happens.
Touch base with your customers two weeks after settlement, six months and then afterwards at least once a year post settlement.
These touch points are the key to generating repeat business.
What we do during the annual reviews is to check in that loan repayments are still in place, interest rates and discounts have been applied correctly, as well as sending newsletters and checking in on the client. Send them a newsletter and wish them “Happy Birthday”.
Focus on service, not revenue
There is a Chinese saying: “Virtue before wealth”. The focus of your mortgage broking business should be on assisting your existing clients.
Either by reviewing their existing mortgages and applying for rate discounts. Then talk to them about whether they may require additional lending for investments, or how to attract referrals.
Show your appreciation when a client refers a new prospect to you. Something as simple as a personal “Thank you” note or a phone call – so that they know that you will look after their friend as well as you looked after them.
A hand-written note (yes – I am a bit old fashioned, but why fix something that works?) is probably the most personal way to show your appreciation. I find that they work heaps better than an email.
Make the one of the reasons for the existence of your business: the main reason is to look after the needs and interests of your customers.
Be an educator
Think of yourself as an educator. When you think about it, no one teaches our children about wealth creation or debt management at schools. And unfortunately most school teachers do not see themselves as competent in financial matters.
There is a whole wealth of information on the ASIC MoneySmart website on how to promote financial literacy (www.moneysmart.gov.au).
Become an expert yourself not just in home loans, but provide an all-round educational service about how your customers can use debt to buy their first home or how to invest.
Consider running seminars to help them buy their first home, or how to borrow to invest. You may also get other professionals to help you, such as a financial planner or a real estate agent.
And if you focus on educating your customers, you will find that your customers will be more appreciative of your services. You will also not be seen to be “selling” home loans, but about help them understand home loans better.
Do these three things – and you will differentiate yourself from the competition. I am willing to guarantee that you will get more business simply by following these three tips.
If you want to create a highly successful and profitable mortgage broking business: Contact us.
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