My advice to new brokers…

Posted by Aug14, 2014 Comments Comments Off on My advice to new brokers…
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A common question I receive from new brokers is “what tips can you give me to be successful and what mistakes did you make?” I’m going to write a few blogs on this because I have made a lot of mistakes and knowing what I know now, I’m certain I could build a broking business very quickly. One of the biggest problems facing new brokers is leads. This will be the first topic I’ll write about.

Most established brokers get most of their business (typically 80% or more) from repeat clients plus referrals from existing clients. The challenge facing new brokers is that they don’t have any clients! Therefore, new brokers need to do two things:

  1. Start building a list of prospects that you can communicate to and build trust with. This will typically be an email list. Make sure you collect everyone’s email address you come in contact with. Make sure you have some good content on your website (to attract traffic) and include something of value that people can download in exchange for them entering their email address (like a free report). Gather as many email addresses as possible.
  2. Get access to someone else’s list. If you don’t have your own list then borrow someone else’s. This means approaching someone that has an existing list and ask if you can send their clients some valuable information (e.g. write a blog for their website, ask them to email a free report to their clients, contribute to their newsletter) or co-host a webinar with them. The best way to make this successful is to focus on getting more business for the list owner first. Don’t worry about yourself at first. Initially, you want to earn the right to speak to their list. Focus your content on getting them more business. For example, maybe you can interview a few clients about the benefits of using a buyers’ agent. Then approach a local buyers’ agent to publish the article in his newsletter. Eventually you can start including some content that is more relevant to mortgages.

Mortgage broking is a contact sport. The more contact you have with potential prospects, the more successful you will be. So the aim is to build a large database of potential clients and communicate to that database often but only with high quality, valuable information – not sales pitches.

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We really need to share more… and now!

Posted by Jul17, 2014 Comments Comments Off on We really need to share more… and now!
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Imagine if we could upload the knowledge and experience of every mortgage broker in Australia to one central place and then download that entire database of knowledge into each and every mortgage broker. How awesome would our industry become? What would our market share be? How much more money would we all make? What would happen to commission rates?

Many people including the MFAA are focused on trying to attract new talent into the industry. I think this is important but an easier way to double or triple the size and strength of the industry is to share our knowledge. If we focus on sharing knowledge (like I do via this blog), and making the industry stronger, will be a lot more successful as an industry.

Many brokers are reluctant to share knowledge because they are worried that it will cost them business (i.e. if my competitors know my tricks and strategies then they will become stronger and I will, as a result, become weaker by comparison). That is so wrong. Think about it. Aussie Home Loans (the largest mortgage broker “brand”) has only 5% of the mortgage market. There is so much business out there that I think it’s near impossible to suffer a reduction in business as a result of sharing knowledge. In fact, what would happen if close to 100% of people came to brokers for new lending? Imagine your business size then! This is our opportunity and I believe we need to seize it.

Maybe you are reluctant to share because you don’t think you are creditable enough? Forget about that. I don’t “know it all” – far from it. We all (regardless of results) have strengths and weaknesses, successes and failures. We don’t need to consider ourselves as “experts” to share. At least one person will get value from your advice and that alone makes it worthwhile. You change an industry one person at a time.

So how can we share our knowledge? Here’s a few tips:

  • Ask/demand your aggregator to get the most successful broker to speak at your next PD day – this could be the most successful broker in terms of settlements, our most successful with social media, or referrals and so forth – doesn’t just have to be volume
  • Organise a broker forum of 4 to 8 like-minded brokers in your area that meets monthly to talk about their business challenges and experiences
  • Publish your experiences, tips and advice in a blog/article. I’d very much welcome contribution to my site (blog) but equally I know the broker industry magazines would love to receive some content too
  • Approach colleagues’ you respect and beg them to share their knowledge (e.g. article or presentation).

The irony is that we, as an industry, have all the knowledge and experience we need to double in size very quickly and it is completely in our hands… do we want to be massively successful or not? So let’s all learn from each-other’s mistakes and experiences, as a result improve our service and advice given to our clients and therefore become stronger businesses.


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Who controls the conversion?

Posted by Jun26, 2014 Comments Comments Off on Who controls the conversion?
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When a client asks about interest rate, how do you respond? Do you allow yourself to get dragged into the conversation or do you subtly educate the client about the important factors to consider when setting up a loan – with the interest rate being an important factor – but often not the most important factor?

The trap that many mortgage brokers fall into is that they let the client dictate the conversational agenda. The person that asks the questions is in control of the conversation. I have written about this advice before i.e. shut up, ask better questions and listen.

This is how I would respond to questions about interest rates: “I can’t promise you that I will always be able to get the absolute lowest rate in every instance over the life of our relationship. Anyone that promises you that is probably lying. But I can certainly add significantly more value beyond any tiny interest rate differential that may or may not exist form time to time.” Then you need to launch into a well-crafted conversation about the ways you add value. My tips for this are:

  • Practise – preparing is the key to confidence. Practise talking about how you help clients. It won’t (shouldn’t) appeal to everyone. But it should appeal to your target client. And you must be confident about the value you provide.
  • Use stories – selling is not tell. Selling is showing. Tell stories (give examples) about how you have helped your existing clients to demonstrate the value. Real stories add credibility.
  • Focus on high value – think about your target market’s high value needs. Some of these things might not be directly related to the mortgage (like guiding them towards buying an investment grade property). But they are high value needs and if you can satisfy them, the business is yours.

If you spend a material portion of your time talking about interest rates your client will think it’s important. It rarely is. Instead, spend most of your time talking about the important things that will ultimately add value to your client. At the end of the day, if the client is super-focused on the lowest interest rate (and that’s truly all they need), you have to ask yourself, do you want them as a client? I don’t. These people are best suited to online lenders and that’s where you should direct them as they won’t be profitable, long term clients.

The key: ask questions, find and demonstrate value and “interest rate” will disappear off the agenda.

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You’re not a magician… tell your clients

Posted by Jun11, 2014 Comments Comments Off on You’re not a magician… tell your clients
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Why do people use mortgage brokers? One of the reasons is probably because they feel like they might get a better level of personalised service compared to what they’d get going directly to the bank. But clients are only partially correct if they think this and you need to tell them this.

A good financial planner will tell clients that he can’t guarantee that they’ll make money. They will tell clients that they can’t control the market – that’s not what they do. Similarly, we need to tell clients that we can’t control the banks. We can’t guarantee that the service will be perfect and there will be no mistakes, hiccups and so forth. And if you get a client that has (and keeps) this expectation, run the other way because your relationship is almost destined to fail. Instead, I suggest you tell clients that mistakes can happen and that there are only two things we (as brokers) can do about that. Firstly, we pick/recommend a lender that, in our experience, has a history of making fewer mistakes. Secondly, if a mistake happens, we’ll do our best to fix it, quickly.

Mortgage brokers can offer fantastic, personalised service which is highly valued by many people. Mortgage brokers however cannot guarantee a perfect experience with every lender. So beware of this incorrect client expectation and don’t be shy to educate the client. Better they expect mistakes and don’t get them than the reverse.


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Does email help or hinder your sales process?

Posted by Apr15, 2014 Comments Comments Off on Does email help or hinder your sales process?
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Some brokers prefer to communicate to clients by phone rather than wasting time typing out an email. Other brokers prefer email as it’s more convenient and less intrusive. But what method is the best to make the sale?

Speaking to people over the phone or in person is far more powerful than writing an email from a sales perspective. Research shows that only 7% of communication is conveyed through words. 38% is how you say it (verbal tones) and 55% is nonverbal expressions. Therefore, if you rely a lot on email to build trust and win a new client, you are missing out on 93% of your ability to persuade your prospective client and build trust. That’s working harder, not smarter!

However, you need to compliment this with your prospective clients’ preferences. Some clients’ prefer email communication so telephoning them every time you need to communicate something will only annoy them. I know that when I am dealing with someone (as the purchaser of a product or service) that I prefer email. I tell people this and when they do not listen and call me anyway, I get annoyed.

Then there are the four personality types to consider. You need to understand what personality type your prospect is and tailor your approach appropriately. Analytical and Driver’s will typically prefer email. Amiable and Expressive’s will prefer the phone.

The answer often lies in selecting the communication medium (i.e. email, phone and in-person) that best suits the following three priorities (in order of priority):

  1. The stage of the sales cycle you are at (e.g. qualifying, building trust, pitching your solution, closing, etc.). E.g. you need more phone and face-to-face contact while you are building trust.
  2. The preferences of the client (based on what they tell you and their personality type)
  3. Your preferences (this is a distant third priority and arguably unimportant).

If you are going to use email, below are three email etiquette tips from best-selling author and presenter, Verne Harnish:

  1. the “Subject:” line of emails should match the substance of the email, period!! For instance, if there is a request for an 15th April phone call, put “15th April call” in the Subject line. And if the reply email switches it to 17th April, don’t keep using the old 15th April Subject line. Take 3 seconds and change the Subject line to 17th April. As back and forth emails morph into different topics, the Subject line needs to change so it aligns with the modified or new topic. Take Subject lines seriously and communication will flow better.
  2. Avoid making too many requests in one email, especially if they involve different people. I would rather receive three separate emails with one topic/request per email (with matching Subject lines!!) than one long email and a generic Subject line.
  3. my third pet peeve are long emails. The above quote from Guy Kawasaki is his testimonial for Joseph McCormack’s book Brief: Make a Bigger Impact Saying Less. When we invite big names to keynote our Summits, like Ben Horowitz for the Growth Summit, we take Kawasaki’s advice and put the request both in the Subject line and as the first sentence of the email. It works rather than drone on about the details.

Email is great but make sure it’s working for you, not against you.

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