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Mortgage brokers are a step behind financial planners and insurance advisers when it comes to customer relationships and having a customer “continuation model”, according to veteran business consultant Clifton Warren.
He says adopting this model will have broker databases “feeding them forever”.
Warren, who works with large, medium and small businesses across banking, insurance and finance, said in comparison with these other distribution verticals, mortgage broking was still relatively more focused on the transaction, rather than on building closer, continual client relationships.
He said the number one thing being done differently in other verticals was the focus on relationships with customers, and the proactivity with which these professionals develop and manage them, including generating client referrals and referrals from influencers or non-client referral sources.
“There’s also retention,” Warren said. “Those clients are on your books and you are generating a revenue stream from them, and I find the likes of financial planners and insurance advisers are continually managing those clients proactively to make sure they hang on to 100% of them.”
The dynamic market conditions in 2023 should encourage every broker to have a continuation model”, according to Warren. This involved proactively contacting existing clients they have settled loans for in the past to generate repeat business and referrals into the future.
Warren recommends a “30-touch” model, where professionals are contacting their customers about 30 times a year in different ways, which could include monthly newsletters and loan anniversary communications, to updates and information that can educate clients and build relationships.
He said brokers should be particularly mindful and proactive around trigger events, which could be anything happening in the marketplace that signalled a customer might need to use their services, with the current shifts in interest rate rises an obvious good time to check in with customers.
“Most brokers are still transaction focused and it can be easy to get lazy. They can settle a lot of loans and build up a good income from their loan book which is providing them with that residual revenue but then they go and forget about the relationship with the client.
“I find a lot of people I work with might work hard to write a lot of loans every year but they don’t go back and communicate with that huge database of clients, which will not only assist them with ongoing repeat business but with providing referral opportunities and introductions.”
As well as regular professional digital communications, Warren said brokers should ensure they add a phone call into their customer continuation model rather than just relying on digital mediums.
“These people aren’t strangers, they’re people you know trust you, so it’s not a cold call. It is a friendly call to check in on them, and clients really appreciate someone who is thinking about them, asking if they need something, and taking the time to inquire into their wellbeing,” he said.
“Clients I have worked with are leaving thousands of dollars on the table because they have not had a process in place to take care of this. Managing your list is something that might only take you an hour a day, but it will absolutely feed you forever once you get it going.”
There was lots of opportunity in the broker marketplace as the market grew bigger rather than smaller, Warren said, and clients needed help and advice more than ever. This only meant the role of a broker to make the complex simple would be more important to customers over time.
“Brokers who can provide that education and build those customer relationships will find the world is their oyster in this business,” Warren said. “But you really have to be on the front foot. You can’t sit back and wait for the phone to ring.”
Warren is a believer in mortgage professionals moving towards a GP-style model, where they are able to offer a range of services to their client rather than just a mortgage.
“You can start with the initial mortgage, and you can make a good living out of that, and part of that is getting to know your clients, and then if your client is starting a business, well guess what you might be able to help them with equipment finance and all sorts of needs.
“I think what you need to be doing is continually expanding your breadth of knowledge and capability – yes, you start from where you are and what you know and leverage off of that, but I think you need to be able to offer customers a full service,” he said.
Warren said brokers might want to refer out to someone else for certain services, but ideally, brokers should aim to be the essential point of contact and advice for that customer, and be the one maintaining that customer information in their database.
“When you go to your GP, they know everything but may not do it all. You want to be the client’s trusted adviser, where they are coming to you first to ask which way to go and you’re the one directing the traffic. You need to continually expand your breadth of knowledge and capability.”
Warren added that brokers needed to have a mindset that believed in the value they offered beyond being product vendors, whether that was fulfilling their customers’ dreams of home ownership, or helping them put their kids through a better school, or other forms of creating value.
“The first sale is always to yourself. Once you have the mindset sorted, it comes down to things like efficiency and how can I do this. That is where the process comes in,” he said.
What tips do you have for leveraging your client database in 2023? Share your thoughts in the comments section below.
