The real reason why people come and see brokers – find it!

Posted by Aug17, 2012 Comments Comments Off on The real reason why people come and see brokers – find it!
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What’s the real reason people come to brokers? Are they after the best deal or someone to take care of all the paperwork? Often, we as brokers think that this is the reason. However, I suspect that there are ‘higher value needs’ that brokers can help with that are less commoditised than finding the lowest rate or doing the paperwork.

A few years ago I read an excellent book by Liz Wiseman called Multipliers (one of the top 3 business books I have ever read). One of the ideas in the book is that focus on “asking the right questions” is incredibly powerful in influencing people and soliciting their best thinking. It is amazing how people can frame and solve their own problems by just be being asked excellent questions. Liz talks about an “extreme question challenge” where you simple just ask questions when meeting with a staff member or client to discuss/solve a problem. I use the “extreme question challenge” in my initial (and often only) meeting with a client. During the first 5 minutes of the meeting I do some talking (build rapport, set agenda, etc.) and then the next 30 minutes is my “extreme question challenge” where I will only ask great questions. Ask questions and just listen. I have a template questionnaire that I bring into meetings to prompt me – has heaps of different questions on it. I am often amazed what I learn just by shutting up and saying NOTHING! I learn about their needs that I can really focus on helping with. Concerns such as “I’m nervous about investing in property and buying the wrong property”, “I am worried about cash flow and risk”, “I really want to focus on tax effectiveness” and so on. If you help solve these problems, you’ll add a lot more value than “finding the lowest rate”. 90% of the time I find at least one high value need by taking this approach. If I can position myself as the best person to help with that need I’ll win the business regardless of the lender I recommend.

So my challenge to you is to take the “extreme question challenge”. In you next client meeting just shut up for 30 minutes and ask the best quality questions you can think of. Do not offer any advice or information during this time – none at all (sometimes it’s hard to resist). Complete this challenge and I promise you’ll be a convert and employ this approach throughout your whole life. Read the book too. Good luck and let me know how you go. Thanks.

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Do you need to find a niche?

Posted by Aug13, 2012 Comments (1)
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I believe that most brokers should find themselves a niche. The benefit of having a niche is that you can tailor your marketing and sales process specifically for that niche thereby being way more effective. The tighter the niche, the better it will work. Conversely, if you don’t have a niche, your marketing and sales process will have to be “all things to all people”. The problem with that approach is that it’s too watered down to be hugely successful/efficient – it will probably just be “ok”. However, you’ll just look like and feel like every other brokers and bank in Australia – not remarkable (which by definition is, worthy of remark). However, if I’m an airline pilot and you’re a mortgage broker that specialises in helping pilots, I’m probably going to tell all my colleagues about you – because it’s remarkable. Also, you can tailor your approach around me – e.g. advertise that you can meet them at the airport and take care of everything in less than an hour.

So how do you pick a niche?

I believe there are two main considerations being your skill set and experience and the industries characteristics.

  1. Your experience & skills

Firstly, be realistic about your skill set. What are you good at? What types of people do you enough helping? For me, I’m good at developing systems and processes to make my work easier. This meant that preparing a report (with my credit advice) for high-end clients wasn’t going to be a problem. If you’ve played footy at the local club, hang out at the pub and so on – perhaps tradies might be a good niche for you (sorry for the generalisations). Also, think about your experience. Have you worked in a particular industry before? If so, it will be an advantage because you’ll know what they like, don’t like, need help with, etc. Plus they’ll immediately like you – because you are one of them.

  1. Industry characteristics

There are a number of things you’ll be looking for in an industry to translate into profitable clients. The top 4 in order of importance are:

  • Earning capacity and more importantly, earning stability. Actors probably won’t make a good niche because their earnings probably vary a lot making finance more difficult. Surgeons have a high and very stable earning capacity.
  • Is the industry easy to get in front of? Do they have one or two widely read publications? Industry groups/bodies? Events? Websites? Concentrated in a certain geographical location? There’s no point picking a niche of you can’t find a way to market to them.
  • Size of niche – probably looking for a niche with at least 2,000 people but probably not more than 10,000 (otherwise it’s not focused enough).
  • Do they have a problem that needs a solution? For example, IT contractors can sometimes run into trouble with some lenders because they might (for example) be on a rolling 3 month contract. So having a good broker that knows how to put the deal together and which lenders to deal with is important. The problem doesn’t necessarily need to be specifically about lending.

There are two ways you’ll get the above information: 1. The internet and 2. Talking to as many people in your target industry as possible. The better the understanding you have, the more successful you’ll be.

Do you have a niche? I’d love to hear your success stories.

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How much is enough? When should you stop working for free?

Posted by Aug03, 2012 Comments Comments Off on How much is enough? When should you stop working for free?
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Do you get frustrated when you spend lots of time working with a prospect, sharing your knowledge and advice but they don’t end up doing business with you? It’s irritating isn’t it… almost enough for you to never share so freely again?

The Law of Reciprocity suggests that if you go out of your way to help someone without any expectation of compensation or benefit, the person you helped will feel obligated to help you in return. If the person doesn’t feel in that way, the universe will reward you for the behaviour – often called Karma.

That’s all well said and done but let’s be realistic – we have bills to pay and family to support.

My approach is to share feely. When I meet a new prospect, I focus all my attention on helping them solve their problems/challenges – be it mortgages or whatever. I put my own self-interest squarely aside and focus 100% of my attention on them. I will continue to do that until a time when I feel that they are 1. not valuing the advice I am giving or 2. purposefully draining as much advice out of me as possible for their own benefit without an intension of ever doing business. If this happens, I “sack” them and move on. I’m really happy that this approach has generally worked well for me and is authentic to my own personal values.

What I would warn of however is to stop sharing with prospects just in case they waste your time. That could lose you a lot of business I think. The person that shares first is in a strong position and it is the first step towards building trust.

What is your approach?

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What a great lead generation tool

Posted by Jul27, 2012 Comments (5)
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We all know repeat and referred business is awesome. It’s profitable and enjoyable working with people we already know and like. Want more? Of course you do!

One of the key disciplines of getting more repeat and referred business is maintain contact with your client base. But it’s more than that. I believe you must always aim to “add value” with each contact – not try and sell something – but demonstrate why they should continue to listen to you, open your emails, open your mail and take your phone calls. We are only as good as our last contact.

So how do you maintain contact with your clients? Email, post, SMS, phone? I believe you need to do all 3 in almost equal parts. The reason being is that email will work really well for some – but some clients won’t even bother to read it (email is becoming less effective due to the sheer volume people receive so certainly don’t be too email focused). The same goes with the other methods. Using all 4 methods will greatly increase the impact you make.

For example, at the moment fixed rates are very low by historic standards – St George’s 3 year rate is 5.59% as I write this blog. This week we sent an SMS to all clients about this rate and suggested that they should consider fixing. If they wanted a review, contact us. It’s created new business and added value – because clients know that we’re on the lookout for them. We also put together a report (to give to interested clients) that assessed at historic rates, rate forecasts and so on to demonstrate why we think 5.59% is a good rate. SMS is a great tool for quick, factual based communication and compliments everything else we do (email, post and phone). I’d recommend using SMS.

So my question for you is; are you using email, post, SMS and phone in equal parts – they are all reasonably cost effective.

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A broker charging a fee-for-service/advice is a hot topic of conversation at the moment so I thought I’d share my insight. [note: I am talking about charging a fee for advice in addition to receiving a commission – not in replacement of commission]

I think that until a client has to reach into their pocket and pay you some money you really don’t know if they value your advice and time. At the moment a mortgage broker doesn’t have to charge a client a fee and I think that’s a double-edged sword. Obviously, the benefit is the service is free which makes it easy to sell. On the other hand the downside is that the client doesn’t necessarily have to consider the value you provide. Research (as discussed in a great book, Predicably Irrational – highly recommend) suggests that two price points; free and 1 cent – are perceived as completely different by most humans – even though the difference in dollar terms is only 1 cent.

Also, I believe that charging a client for advice increases a brokers’ self confidence in the value they deliver as a broker. Good brokers deliver heaps of value and I think many brokers underestimate the value they provide.

For this reason, I believe charging a fee for certain services is a good thing – not because of the incremental revenue but because of the stronger relationship it creates with clients. It forces the client to recognise the value you provide. And it forces the broker (you) to clearly communicate their value proposition. This result is a stronger (stickier) client relationship. The downside of doing so in this environment is the extra compliance with NCCP – providing a credit quote, etc.

If we start charging fees we’ll look more like professional advisors and less like sales people. What’s your experience?

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