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It’s a common scenario that many in the industry are experiencing: the credit crunch is impacting profits, business confidence is at record lows, money is tight and there’s not much left over to market the business and attract new customers. But don’t let the hype affect your outlook because it’s not all doom and gloom. While undoubtedly some are finding it tough to rise above the hard times, the savvy brokers are seizing the opportunities in adversity.

For those businesses getting their name out and building their brand – while many others are avoiding it altogether – there can only be an advantage for when the industry does recover. And there are signs to indicate it’s already happening.

Michael Osborne, director and head of sales and distribution at The Brokerage, highlights the tendency in tough times for brokers to think the best way to save money is to cut the marketing spend. “We, however, believe that any good players will always maintain a budget for such things as the website presence, professional brochures, regular newsletters and client relationship management (CRM) strategies.”

This sentiment is echoed by Tracie Palmer, principal finance manager at LJ Hooker. Spending money on marketing is a priority for Palmer. “From the start, I marketed myself. I have found that it has been advantageous for me to market my profile because everyone knows me now. More importantly, they know what I do.”

Palmer says that she has seen the current type of market before in her 21 years in the industry. “We have had it good for a very long time and now we are going through the bottom of the cycle.”

But she says things will get better. “It is always hard to accept the banks cutting our commissions, but I do recall the time when the banks increased commissions during the good times.”

Opportunities to be found

According to Osborne, the current market presents enormous opportunities for brokers. He says that now is time to reflect on the business structure and look at the integral areas impacting survival and growth. “Are the lead and referral mechanisms adequate and sustainable? Are there multiple revenue streams providing appropriate buffers and is the business utilising technology to full advantage?”

And importantly, marketing and building the business’ name doesn’t have to be a huge drain on resources. Osborne says that a broker’s greatest asset is their customer base. “Notwithstanding the fact that the existing customer base provides the all important passive income stream, customers, if managed well, provide the best source of referral and repeat business.” He believes that brokers who don’t have a CRM system and customer contact strategies are not maximising this opportunity. “Brokers who are not prepared to spend $25-$50 per annum on their customers should seriously question why they receive trail.”

He says that now is the perfect time to be talking to customers. “Through newsletters, birthday cards, Christmas cards, interest rate bulletins, free anniversary or term reviews.”

Osborne says the next best asset for brokers concerned with how they should market or advertise is at their feet. He calls it ‘walk the talk’ and it can be easily overlooked. “Brokers should be out targeting new business by way of seeking out new referral partners, community involvement, local business groups, letter box drops, or handing out brochures in people traffic locations.”

Palmer agrees and says it’s been an effective way to build her profile. She is an active figure in her local community, supporting school fetes, sporting carnivals and fundraising. “You need to keep plugging your brand or profile so you still attract business. It can be hard when your commissions are reduced or you have fewer sales than normal, but it’s very important to keep your name out there,” she says.

Contributing to the local community has been both rewarding and an effective way of building the business’ profile. “We are allowed to hang our flags and give out our merchandise while we are there. Everyone knows us,” says Palmer.

Driving business growth
According to Palmer, it’s imperative to find innovative ways to market the business.

One way she built awareness of the brand to new customers has been to utilise her real estate network. “If the real estate agents recommend me to their customers, I can obtain more information from the clients, which ultimately helps my agents to pinpoint the right property for the customer. I just ask my real estate agents to give me the opportunity to talk with all their customers.”

And it’s a savvy way to market the business to potential clients and stay front of mind. “If there is a special deal running at a bank, I’ll make sure that they all know about it. If you come across as the expert on finance, they will refer to you.”

Palmer is confident as to why she’s been able to build her name off the back of referrals. “This has happened because first, I gave them good service and secondly, I stayed in touch with my quarterly newsletters. My newsletters are gold and I always get a lot of loans after I have sent them out.”

Osborne says that building brand awareness doesn’t need to cost a lot money. He says that one of the most powerful marketing tools for the business has been its broker partners and word of mouth. “Our experience at both a retail and wholesale level suggest that unless you have enormous sums of money to spend on brand, blanket advertising can become a black hole.” Instead, their promotional strategies have been driven through organic growth, the allocation of resources as well as intermittent targeted advertising.

Palmer has some pertinent rules of thumb when it comes to advertising. “Always try things a few times and then see how it went. Never do a leaflet drop once and then don’t go back. It takes time to be noticed.”

She highlights the importance of monitoring where clients come from. “Remember that sometimes you have to use an advertising medium just to build your profile and you may never know if it brought a client to your door.”

And finally, Palmer says that when money’s tight, to cut back on what you are doing. “You must still do something to keep your name out there.”  She isn’t afraid of getting her hands dirty, so to speak. “In tight times over the years, my staff and I have done our own letter box drops. We saved money by doing it ourselves.” And most importantly, she says, “stay positive and have determination”.

And what does Osborne think about the future for the smart brokers getting their name out? “With the entry bar rising and national regulation around the corner, the professional broker – the ‘stayer’ – will be well placed to capitalise in tomorrow’s market.”

Broker’s diary: Tracie Palmer says …

One way I extend my service to customer is by… helping a lot of our customers to consolidate their personal debts into their home loans. Although this means that they are putting consumer debt into a longer period loan, they are freeing up some cash in their budget just to help them get through the tough times. Some of my clients are taking out an equity loan over a short term, but utilising the lower rates in a home loan.

Marketing advice I would give to other brokers is … don’t give up, this challenging time is known as a normal market. You must keep looking for other ways to do business. Be active in your local area. Get involved with a volunteer group like the Lions or Rotary club. Meet as many people as you can and find out about their business. Look interested and listen to them. Ask for referrals. It always amazes me how brokers can do a great job of someone’s loan and then forget to ask for more business. People like to help the people that they like.

The foundation of my business prosperity is… referrals. I have two fundamental avenues for referral generation. Firstly, from our real estate agents and professional sources, like accountants and solicitors and secondly, from my customer database. In the first instance, you need to prove that you are a person of your word when you deal with referrers. Trust is earned so try to be the giver in the relationship. You need to be good at what you do and keep up with your training and development.

My view on advertising is … it can get costly so you have to watch what you spend. A couple of rules of thumb is always try things a few times and then see how it went. Never do a leaflet drop once and then don’t go back. It takes time to be noticed. Monitor how effective your advertising is by making a note of where your clients come from.

Published on: Saturday, June 13, 2009

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