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How long does it take you to spot a deal?

Posted by Sep30, 2013 Comments Comments Off

Your ability to spot a deal is probably one of the single most important factors that will determine how much profit you’ll make in the next 12 months. Become awesome at spotting profitable and non-profitable deals and you’ll make heaps of money. But the reverse is also true.

So what do I mean “spotting a deal”? I don’t simply mean “getting the loan approved and settled” –most experienced brokers can do that. A deal is a transaction that makes you money with a client that will give you more business in the long run (either referrals or additional lending or both). I believe that most brokers only need about 200 to 300 good quality clients. The quicker you can acquire 200 to 300 good quality clients, the easier business will be (as 200+ quality clients will generate enough repeat and referred business to keep the average broker busy and very profitable).

Some questions you need to ask yourself to determine if the client is a “deal” or not may include:

–        Does the clients profile and needs closely match your experience (e.g. if you have dealt with hundreds of self-employed builders in the past and the client is a builder then the answer is yes)?

–        How likely is it you’ll get the current deal approved and how long will it take? Do you already have an idea of the lender(s) you’ll consider?

–        Is it reasonable to expect the client to have surplus borrowing capacity in the future?

–        Do you like the client? Do they seem reasonable and fair? Do they like you?

–        Is the client open to receiving credit advice or do they seem fixated on interest rates and fees?

So what do you do if the client doesn’t look like a “deal” to you. Simple. Immediately refer the client to another broker and take a comms split if they write the deal (simply tell the prospect that you are too busy to take on the extra work but you can introduce them to a broker that a specific in helping people like them).

Do you have a system for quickly identifying a “deal” versus an unprofitable prospect? If not, get one!

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Turn your mortgage broking business into Disneyland

Posted by Sep11, 2013 Comments Comments Off

Disneyland (in Anaheim, USA) is an amazing business. Even if you are not interested in the entertainment value, it’s worth the visit to observe the way they do business. Perhaps the most significant thing is that they only care about the visitors that “get it” and they ignore the rest. Walt Disney was very clear in his vision when he established the first theme park in 1955. He wanted to “make people happy” and create the “happiest place on earth”. Some people buy into that vision and want to be taken away into a “magical land of fun” be it kids or the adult that wants to be a kid again! Disney designs and develops everything in its park(s) for that very exact person – their target market. Every ride, entertainment venue, restaurant, product, staff member is laser targeted to that same vision – the happiest place on earth. They don’t say to themselves “well some parents may visit that are very mature (read boring) and we should have a restaurant that is designed for them”. No. Everything in the park is on target.

I think lots of mortgage broking businesses can learn from this. There will be some clients that really “get what you do” and value it. There are other clients that are indifferent about the service/advice you provide. It’s erroneous for businesses to try and cater to every man and his dog and please everyone. Doing so tends to water down your core skills and culture. Instead, better to play to your strength (i.e. what you are good at and enjoy doing), design a service/advice business that only considered the needs of your target market. Deal with more target clients and less non-target clients. Give your target clients more of what they want and need.  Become more like Disneyland.

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Only a few refer regularly… find them!

Posted by Jul26, 2013 Comments Comments Off

When was the last time you went through the referrals you received in the past 12 months to identify the clients or colleagues that referred you more than one prospect? Most businesses have a small group of advocates that go out of their way to promote the business because they love what they do (or make). Knowing who these “advocates” are is the first step in getting more referrals.

[Obviously, my opening paragraph implies that you track where each lead/prospect comes from. If you aren’t doing that, you must start today because you can’t manage what you don’t measure. This is the most basic of business management and if you are not prepared to do it, what’s the point of running your own business?]

Once you have identified your business’ advocates (i.e. people that have referred more than one prospect in the past 12 months), it’s time to say thank you. Most people want recognition for the work they do. They want to know that they matter and that they are making a difference. Bottles of wine and hampers are good but a simple “thank you” and “you are making a difference” is typically more effective (and meaningful) – particularly for advocates because they already love what you do.

So here’s a challenge for next week: find out who your advocates are and ring them up. Acknowledge what they have done (i.e. referred 6 people), say thank you and tell them that they are helping you grow your business. Do this every 3 to 4 months and watch your business grow.

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Discovering high value needs

Posted by Jul10, 2013 Comments Comments Off

There is a methodical system for discovering a prospect’s high value needs and if you get it right, you’ll win that client for life!

It starts with a low self-orientation approach. That is, approach every prospect with the question “how can I help this person” – not with the motivation of “can I do business”. My aim is that all prospects should hopefully be better off for meeting me regardless if we do business or not. So I’m constantly on the lookout for way I can help them. I try and find an opportunity to “give first”.

Secondly, you need to ask better questions. Ask questions that challenge the prospect – get them thinking. Questions like how much income do they need in retirement? What is their biggest fear with borrowing money? You have to earn the right to ask deep questions so begin with some simple ones and then get deeper as they are more comfortable.

Lastly, keep an open mind. A high value need might not be something directly related to credit advice. Maybe they need help selecting the right investment property – so introduce them to a buyers’ agent. Maybe they need help managing their cash flow. 95% of people need help with something.

Find one to three high value needs, get agreement from the prospect that you have correctly understood those needs and then go about helping them satisfy those needs (and/or introduce them to other trusted advisors that can help). That will position you as a trusted advisor.

You’re far better to sell on high value needs rather than something commoditised such as a low rate, saving the prospect time or service. Good luck!

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I think we can learn some very valuable lessons from the retail industry (particularly apparel retail). You would have noticed lately that everything is on sale – 50% (or more) off is not uncommon. What is the retail industry teaching its customers? To never pay full retail price again! It’s a lazy strategy – to compete on price.

Price (interest rate) is rarely the most important thing to the client. If it was, there would be only one mortgage lender in Australia – the one with the lowest rate. I believe that 99% of prospects have 1 to 3 high value needs – a problem or need that they need a solution to. These high value needs aren’t price related (i.e. rates and fees). Your goal, as a credit (trusted) advisor, is to find out what the prospect’s high value needs are. You need to discover them as the prospect probably doesn’t even know what they are if asked outright. The best way to discover your prospects high value needs is to simply “ask great questions and listen”. The person that asks the questions is in control. You never learn anything while you are talking. The best way to influence people is to ask better questions. The best questions challenge prospects – get them thinking.

Let me ask you this: when you are in an appointment with a new prospect, who does most of the talking? If you are talking more than 20% of the time, you’re missing opportunities! Talk less, listen more and find the high value needs.

More about high value needs in my next blog…

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