Relationship Marketing for Mortgage Brokers

Relationship marketing is becoming an increasingly vital part of any business!

DOES THIS SOUND LIKE YOU?

"Where do your best clients come from?" I ask the broker sitting in a coffee shop at Coogee Beach, Sydney. They replied "I think mainly through referrals, though we've tried direct mail, telemarketing, I'm listed in Yellow Pages of course, plus we do advertising if a good offer comes along."

BUILDING RELATIONSHIPS

List your top 10 clients then write down how they came to you. I'll bet nine of the 10 were referred by an existing client, colleague or alliance, not through advertising or marketing. People select a broker as they would their lawyer, doctor or accountant - by asking people they know and trust for a referral. That's why it makes sense to focus your marketing attention and budget on your source of new business. This is particularly important today as the industry fast moves towards advice and fee for service meaning you need to gain trust, build rapport, establish a relationship and earn the right to ask for their business. That's why relationship marketing is the new game in town for brokers.

WHAT IS RELATIONSHIP MARKETING?

I define it as knowing which clients you want to do business with and focusing your marketing on relationship building around that target.

HOW TO DO IT WELL

In his book Thriving on Chaos, Tom Peters recommends devoting 75% of your marketing to establishing and maintaining word-of-mouth networks; building relationships and referrals for your business.

TOP 10 TIPS

1) KNOW YOURSELF FIRST - Ask yourself what it is you're passionate about, what you really like doing, your unique skills, what makes you money and what you have to offer clients. Spend 50% of your week sitting down with clients and building relationships with referral sources. If you're not passionate about spending time with people (i.e. clients) perhaps it's time to rethink whether you're in the right business or identify how to overcome this problem.

2) BE CLEAR ABOUT YOUR TARGET MARKETS - I ask the same broker who his ideal client would be. His response? "High-net-worth individuals with lots of money buying big houses and investment properties". This is a common problem in the industry - brokers still tend to define their ideal clients by value and product and not by life stage needs, demographics, or geography. There are several steps you should take to identify your target markets appropriately. The first is to analyse your current client base and identify groups you want to deal with and those you don't. Then there are a number of serious questions to ask yourself such as "What types of clients do I relate to best? Which clients will pay my fees? What clients will I realistically attract?"

3) TEST THE STRENGTH OF YOUR RELATIONSHIPS - If you don't know whether you're currently delivering to your clients' expectations, you'll never really know how strong or weak your relationship is. There are plenty of ways to find out what your best clients really think and what they expect from you - telephone surveys, focus group lunches, online surveys, mail out questionnaires and regular informal feedback. We recommend adopting three key questions at each review time and as part of your sales process. Don't be afraid to ask more direct questions such as "What would cause you to leave us? What is the single most important thing we could do for you? Do you feel you get value for money?"

4) DEFINE YOUR VALUE PROPOSITION - For each of your target markets, identify what you're offering them and why they'd come to you. Consider what you're selling - you are in the business of arranging home loans, providing convenience and service, not just products. Identify what you're offering, price it appropriately and have your offering packaged and presented to the client in a professional and convincing manner. Too many brokers have no personalised marketing material that clearly differentiates them from the pack.

5) SEGMENT AND SERVICE APPROPRIATELY - Segmenting clients by loan size or product limits their potential. Classifying your clients into segments needs to be more art than science - "A" clients should be the ones that have real potential for growth, are a great source of new business and are your alliances. Unless you're prepared to seriously differentiate your service offering to clients, there's no point in segmenting at all. It's important to keep segmentation simple and manageable, to differentiate your service offering, and invest in a good database.

6) PRACTICE "RELATIONSHIP MARKETING" PRINCIPLES - A top performing broker recently told me they had grown their business solely on referrals through their "A" clients, connections in a number of large corporations and alliances with solicitors, accountants etc. He hit the nail on the head when he said: "We spend all our marketing dollars and efforts on these people and it is now paying off."

Some great relationship marketing activities that really work:

• build a referral program with your "A" clients
• strike up alliances with professionals offering services to the same markets
• think outside the square - even your hairdresser could be a good source of business
• attend events and conferences where your target clients will be
• join one or two networks and attend functions regularly
• sponsor something that targets your market/DIV>
• build relationships with local media and have your articles published

7) SET TARGETS AND MEASURE RESULTS - Clients buy relationships not products. A number of people have been using the term "relationships under management" to measure business success. It's also important to identify your existing clients where you need to focus on retention and growth rather than trying to get new clients. Set sales targets based on new business gained from existing and new clients. For every new initiative you undertake, agree on the number of referrals you'll send each other and the types of clients you want. Always ask new clients how they came to you and keep a record of new business gained. Be patient - lead times can be long but the rewards can be great.

8) HAVE AN "ELEVATOR" SPEECH -Imagine you have 30 seconds in an elevator with someone you've never met before and they ask you what you do. The aim is to briefly explain your job then put the focus back on them by asking a few specific questions such as: "Do you have a mortgage? Do you have a good mortgage broker? Could I call you to discuss your needs and see if I can help you in any way?"

9) DEVELOP A RELATIONSHIP MARKETING PLAN & IMPLEMENT IT - Build a simple and practical relationship marketing plan and 12-month calendar. Ensure your team contributes to the plan and allocate tasks among them with one person responsible for driving the project. You may need help developing your plan - people outside your business can give a fresh perspective and help identify priorities. Next, identify your marketing priorities, allocate a budget and consider resources - people and time - that to implement it. Implementation is a process not an event - be patient.

10) GET OUTSIDE HELP IF YOU NEED IT - Most brokers outsource many of their business needs such as accounting, business coaching, and legal needs. Marketing still seems one of the few areas they tend to tackle themselves without the support of specialists. Ask for a referral to a good marketing consultant who can help develop your plan and assist with implementation if need be.

A successful broking business depends on knowing who your target markets are, then building relationships with them - both with existing clients, alliances and colleagues who are happy to refer business to you.

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