It’s an old business adage that’s easily forgotten, yet when considered correctly, can be worth a huge amount to your business:
The best customer is the one you’ve already got.
Winning new business and building lasting relationships is no easy feat, but clever business owners know that the best returns come from repeat customers over a lasting period. Equally as fruitful is the opportunity to offer these customers multiple services and products through broadening your range of solutions.
But how do you get your customers to come back and to consider your business holistically?
The answer is: mortgage brokers should diversify – and there aren’t many industries where this is more relevant than in property and mortgage broking.
Diversification is about building products and exploring new areas of business – it allows you to offer more to your customers. This, in turn, means you gain access to another source of income, greater business growth and deeper customer relationships.
Mortgage brokers can be left vulnerable by changes in the market – and since transactions are typically one-off, mortgage brokers often put considerable effort into building relationships with minimal long-term return.
Offering a broader service doesn’t just help to bolster your business, but increasingly, customers expect a more holistic financial service – and will be drawn toward those who offer it.
So you think your business is diverse?
If you’re a mortgage broker chances are you’ve already heard about diversifying your business. You may have already made steps to offer commercial lending or insurance as part of your product mix – which are amongst the most common areas we see mortgage brokers branch into.
Our own market analysis shows that there are still plenty of opportunities for brokers to create a diversified and sustainable revenue stream through a wide range of services, across a larger client base.
We’ve seen that the best performing businesses are creating new efficiencies and finding more effective techniques for acquiring, engaging and retaining clients – at a lower cost per client.
One of the key insights from our analysis around diversification is that a broker doesn’t necessarily need to establish an adjacent business such as financial planning or insurance, but rather invest in the capability to offer a wider range of products and services that relate directly or indirectly to their core business.
Diversification isn’t a new business concept and it’s not one that you can simply set and forget – it’s fluid and changeable. In the case of mortgage brokers, you should keep your finger on the pulse of the market, knowing market trends and what consumers are looking for. It’s also about competitor analysis. You may have diversified into insurance – but if all your major competitors have too, your unique offering becomes less so.
Mortgage brokers should diversify – and Providence can make you truly diverse
Providence partners will mortgage brokers to equip them with solutions that go above and beyond customer expectation. As property research and investment experts, our service provides your business with a strong additional revenue stream that also adds a strategic aspect to your business. Through us, you can provide your clients with a competitive mortgage along with the tools to make a better investment and to grow their property portfolio.
The major benefits to a mortgage broker over and above the referral fee we provide include:
- Giving your pre-approved clients greater direction when securing their property, decreasing the lag between pre-approval and purchase
- Ensuring that your client purchases the right property, avoiding the complications of making a poor investment decision
- Increasing client loyalty by removing the risk of the client seeking alternative financial services
- Better company cash flow – you receive a share of the remuneration we receive for our services
- More leads – anyone directly referred by your client to Providence is immediately sent to you
- Increasing your Products Per Client (PPC), making your client ‘stickier’.
Our expertise areas include property research, portfolio development, access to professionals in accounting, legal, finance and SMSF advice, along with expatriate and non-resident property investment. As a mortgage broker, it’s likely that services such as these would be of interest to many of your clients.
Learn more about Providence
In light of reduced margins and commissions, many mortgage brokers are turning their sights to diversifying their revenue base. Such a move can significantly increase profits and safeguard against market downturns, while having a minimal impact on your existing business.
Get in touch with us to find out more about Providence and how we can support you to diversify your business into exciting new territory.
Written by Lynton Stevenson, Managing Director, Providence Property Group.