- Not spending money to stay in touch with their clients
Probably the best money you can spend is to keep yourself in front of your client base. Again, don’t assume your clients will remember you because you did a great job for them — getting referrals and repeat business starts with exceeding their expectations, but you need to go a lot further to maximise referrals.
According to AFG, Brokers who subscribe to their SMART system, part of which includes a post sales marketing program, have seen double the cumulative growth of their loan books compared to their Brokers who aren’t using it. Given it only costs a few dollars a day, it makes no sense not to be on it.
So, what is the benefit you can get by improving your post sales marketing?
Let’s say you decide to spend an average of $10 per month on every single client you have in order to remind them about you. Let’s also say that the result is that every year, just one out of every ten of your clients refers a friend to you each year that otherwise would have forgotten about you.
My calculations are based on a Broker doing just 30 loans per year, a 0.6% upfront commission rate, a 0.15% trail commission rate, an average loan size of $400,000 and a natural trail runoff of 25% per year.
The result is, that in upfront commissions alone, the Broker who spends $120 per year on every client and generates referrals from 10% of their client base each year, has earnt $156,373 more after 10 years. They have earnt $876,373 after these marketing expenses compared to the Broker who earnt $720,000.
Not only that, the Broker has earnt $177,291 more trail over that same 10 years. Even better, the Broker who invested $120 per year on every client for the 10 years now has a trail of $117,404 per year, compared to just $66,594 for the Broker who didn’t.
And if that doesn’t convince you, one Broker now has a client base of 478 clients and the other has just 300. So they are in a far stronger position for the future and the value of their business is far higher. Not just because they have more clients, but I’ll bet they have also done more repeat loans for those clients as a result of their post sales marketing which increases the value of each client. Therefore, the value of the business, should it be sold in the future, is much greater.
When you also take into account the clients who forget about you and won’t be around to do repeat loans in the future, the dollar cost will be even more dramatic.
I have unfortunately heard Brokers take an incoming call from a past client and say ‘Yes, I am still a Broker.’ If that ever happens to you it is a clear sign you need to invest in Post Sales Marketing because for every past client who searches you out, there are many more who have lost your contact details. There is no excuse for your past clients having any doubt that you are still an active Mortgage Broker.
Play around with your own figures and see what sort of results you get. How much are you prepared to invest to make sure your clients remember you and pass your details onto their friends?