SPOTLIGHT -- Joining forces

Market pressures, competition and credit licensing have all contributed to market consolidation. While mergers can be tricky, the results can be positive when business goals are well aligned, writes Belinda Luc.

Tiffen & Co and The Mortgage Detective is a prime example of a merger that has worked to the reciprocal benefit of both organisations.

Canberra based mortgage broking firms Tiffen & Co and The Mortgage Detective merged in October 2009 following lead up discussions to become one of Canberra's leading mortgage broking firms.

The successful alliance between the two companies came about following the economic impact of the GFC and the need to fortify its strength in the market.

Managing directors Gerard Tiffen, David Friend and Alison Whittle found that in the uncertain financial economic times, it was vital that customers knew that they were dealing with well established and professional industry participants.

The merger came about because the two firms shared similar platforms: they both had economies of scale, they both wanted to rationalise costs moving forward, and they both had a like-minded approach to achieving their short and long term goals.

They had also known each other for some time.

"I'd known Gerard [Tiffen] for a while as we'd worked together under the aggregator Mosaic Group," Alison Whittle says.

When Mosiac Group merged, Ms Whittle and Mr Tiffen started thinking of ways in which they could build their brand and strengthen their offering. And a merger was the obvious answer.

But they didn't charge in with their eyes closed.

Using the talent and experience of a mutual colleague and friend, Adrian Thompson, they started to plan how the new business would be born.

"Adrian had assisted with the merger between Mosaic Group and National Mortgage Brokers in Melbourne, so he was aware of the planning that was involved," Ms Whittle says.

Having the same aggregator's software platform certainly made it easier to adopt new business systems, mainly because a radical overhaul was not required.

"Fortunately, we shared the same platform. I don't know how we would have been able to make the transition otherwise... It would have been a nightmare," Mr Tiffen says.

And Ms Whittle agrees.

"We received lots of support from our aggregator which helped the process run smoothly," she says.

CHANGE MANAGEMENT CHALLENGES

But no merger is without its share of hiccups, and for Tiffen & Co and The Mortgage Detective, the biggest issue was in helping staff adapt to the new structure.

"The transition was helped along by having moved into such nice premises," Mr Whittle says.

The space and resources of the newly furbished offices allowed brokers the opportunity to meet clients in private sitting rooms and be supported by a team of administrative assistants.

"It is a really nice environment to work in," she says.

Nevertheless, it took a good six to 12 months for staff to adjust to their new roles and environment. While there was some uneasiness and resistance to change, the overall transition was a positive experience, Ms Whittle says.

"It took a little bit of work on our part to ensure staff coped well with the transition," she says.

To facilitate the transition for staff, having open, honest and clear communication was essential.

"Communication with staff was very important throughout the change process," Mr Tiffen said, adding that having open communication with staff would be top of mind if they were to undertake a similar venture in the future.

And the result of a successful transition has been an increase in the number of sales staff.

"We haven't lost any brokers as a result of the merger.

"In fact, we have increased our sales team," Ms Whittle says.

COMING TOGETHER

Interestingly, tying the two cultures together was something that was not manufactured by both sides of the organisation; rather, the merger in values was the organic result of a well-planned transition.

"Once we made the decision to merge, that's when we considered tying the two cultures together," Ms Whittle says.

Keeping the existing business names, Tiffen & Co and The Mortgage Detective, also helped existing staff and clients assimilate with the new organisation and adopt its brand and values.

"Alison started in 1995 and I started in 1999, so we'd both had experience in the industry and clients and brokers that we'd worked with in the past," Mr Tiffen says.

"By keeping the name, we aimed to help our past and current clients identify with the organisation. The name helps our clients acknowledge our existing relationship."

"Keeping the name was important because it comes down to the existing relationship between the broker and the client," Ms Whittle says.

"Almost all our brokers have been with each of us for around six years, so there's a sense of loyalty and reputation and we wanted to continue to build on that," she says.

LOOKING FORWARD

Ms Whittle says the merger has paid off, with the firm expecting a "record" month in settlement volumes this month.

"We are pleased to expect over $30 million in loans settled this month (July)," she says.

"The merger has allowed us to capitalise on our existing client relationships, with now 80 per cent of business generated through client word of mouth referrals," she says.

Currently, Tiffen & Co and The Mortgage Detective boasts around 5,000 clients on its database, and the joint operation has allowed the company to reach out to clients in a more effective manner.

"We have developed a number of client relationship building strategies, including newsletters, mailings, movie nights and even an annual wine tasting event.

"It's a great way to strengthen client relationships: giving something without necessarily asking for something in return. It shows we support and value our clients, and they enjoy the experience," Ms Whittle says.

"The annual wine tasting event has been such a huge success in the past that they now look forward to it every year."

Mr Tiffen agrees that the business has a "flow" that can only be attributed to the marketing and client relationship management strengths Ms Whittle brings to the table.

"Alison is brilliant with the administrative side of the business," he says, adding that for a merger to be successful, the key is to finding someone with accompanying strengths and talents.

"If we were to consider a further expansion, we would need to find someone whose business values and personal attributes complement our existing business," he says.