Are you teaching your clients to value your service at $nil?

Posted by Oct18, 2014 Comments Comments Off on Are you teaching your clients to value your service at $nil?
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Most mortgage brokers don’t charge for their service. This is often viewed by the client as a benefit i.e. they essentially get something for nothing. Whilst I think it’s a benefit too (from a mortgage brokers standpoint), the risk is that we teach our clients to value our service at the price they pay – nothing.  So it is critical that you do something to avoid this. Let me share an experience with you that I had this week that reminded me about this point.

About 18 months ago I made an incredibly stupid decision (in hindsight) to offer 3 clients free financial planning advice as a reward for their custom and loyalty. Clients had to apply for the free advice and indicate why they wanted help. I then selected 3 clients who I thought were loyal and deserved the investment of time. I will never do this again. There were a few things that didn’t work but mostly the problem was that because the advice was “free”, they didn’t value it. The lesson I learnt is to never offer something for free or discount prices when it comes to selling advice. The right clients will always pay a fair fee. The wrong clients will be attracted to “free” or ask for discounts.

But what does this experience have to do with broking? Well, the risk is that because you don’t charge, the client won’t value your time, advice and service. Given this, we need to be vigilant in communicating our value to clients as often as possible (within reason) and never stop. A good recent example in my business is we did a valuation with lender A and the valuation came in $200k less than the customer’s estimate. We went to Lender B and the valuation came in bang on the customer’s estimate. This is a benefit that is exclusive to dealing with a broker, as opposed to going to the lender directly. We need to communicate this benefit: “I’m so happy we were able to help you overcome the stupid valuation Lender A did. This is the benefit of dealing with us. We’ll always be ready to find you the best lender that suits you at any particular time. We always look after your best interest”. There are many advantages we offer compared to dealing directly with lenders and some benefits compared to other broker. Always communicate them.

And if you can get the client to actually say out loud to you “I’m very happy with your service”, it will make a big psychological difference to their feeling about your business (based on research).

If you always assume your clients don’t value your time/service until you talk to them about it, you won’t be disappointed.

 

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