Client retention at risk as fixed rates expire, Connective warns

In its latest Statement on Monetary Policy (SoMP) released on Friday (10 February), the Reserve Bank of Australia (RBA) resolved that the CPI central forecast is for inflation to decline to 4.75 per cent over 2023 and “to around 3 per cent by mid-2025” at its earliest.

Given the inflation figures remains above target, many economists now expected the cash rate will tip above 4 per cent.

In the face of growing economic uncertainty, Connective anticipates 2023 will be a “historic year” of refinancing, presenting valuable opportunities for proactive brokers.

Refinancing activity has already hit new highs in 2022, according to the Australian Bureau of Statistics’ (ABS) latest Lending Indicators data, with the month of December 2022 hitting its second-highest level on record ($19.1 billion) despite the value of new mortgages decreasing.

On the back of heightened refinances, Connective chief customer officer Gingkai Tan is encouraging brokers to mitigate risk of losing clients by ensuring technology and digital marketing tools are integrated into their business systems and processes.

Connective’s research revealed only just over one third of brokers embrace automated marketing tools (37 per cent), despite an analysis of their membership showing those who use marketing automation achieve an average 64 per cent increase in volumes than those who don’t.

“Our research shows that when brokers leverage technology to nurture their client relationships they achieve significantly better business results,” Mr Tan said.

“We’ve found the most successful brokers adopt lead tracking, automated marketing, and automated emails more widely than brokers overall.

“Although most brokers consider these tools to be important, there’s a significant cohort who lack the knowledge to get the most out of these technologies,” Mr Tan said.

“Optimising digital tools to proactively communicate at the right time will ensure clients call their broker first, not the bank.”

Given borrowers inform their buying decisions with online research, Mr Tan said ensuring your website is optimised by using keywords or engaging an SEO specialist to drive traffic to it was important, as well as harnessing the “power of social media” was also critical.

 In addition, keeping digital communication personal was essential, he said.

“The most successful brokers are leveraging digital technology throughout the client lifecycle [sic],” Mr Tan said.

In 2021 Connective established a team dedicated to helping its members set up and automated email communications via its Digital Marketing Hub, where members can set up personalised, automated client emails to keep in contact with clients.

“We’re delighted to see a significant number of our brokers are embracing digital marketing to provide personalised communication — its uptake has increased by 82% year on year,” Gingkai said.

“Now’s the time to put systems in place to support and retain clients, and of course achieve better business results.”

[Related: 350 billion fixed loan credit rolling off to variable: RBA]