The former CEO of the MFAA and current chief operating officer of HashChing Siobhan Hayden has identified 10 things mortgage brokers should focus on to maximise returns.
Ms Hayden, who was the head of the Mortgage & Finance Association of Australia (MFAA) before stepping down abruptly last year, has said that the following tips could help broking businesses thrive in a “rapidly changing” environment and “stay ahead of the curve” in an increasingly-competitive industry.
The 10 areas Ms Hayden identified are:
- Process improvement
She said: “Continually seek out opportunities to complete processes in your business faster and more efficiently. As a broker, you will obtain greater business results if you are not the only resource in your business.
“If you are, review the alternative options for completing key tasks, to maximise your output and 'income producing hours'. This could include how you capture your clients supporting documents, or outsourcing the file management of your loans.”
The former MFAA CEO added: “It helps to set time aside each month to review business processes. Document all the tasks in the business, identify clear steps in each of the processes and then seek out alternative ways to deliver these processes.”
- Customer feedback
Noting that the digital age encourages consumers to give feedback, Ms Hayden said that brokers should encourage clients to give feedback, and then “actively respond to their insights”.
Ms Hayden said that this is “invaluable and directly feeds into process improvement”.
- Customer referrals
Emphasising that brokers should ensure that they ask for referrals, the HashChing COO added: “There are also four key points during the customer journey that you should ask for referrals:
1) When you first meet or engage – ask how the customer heard about your business and let them know how important client referrals are to growing your business;
2) At conditional approval - ask the customer if they know of anyone else who is currently seeking financing or advice that you could assist;
3) Upon settlement - refine and personalise the question about who the client may refer i.e. do they know of anyone at their school or sporting club (whatever is applicable) who may benefit from your services; and
4) When you ask customers to rate your performance."
- Online referrals
According to Ms Hayden, the “gold standard” of a broking business is to secure between five and seven “key referral sources”.
She continued: “Given that a large proportion of borrowers do their research online, broker businesses should now consider an online lead opportunity as part of their referral network.”
- Time expenditure
“Review how you can reduce time wastage in your business and maximise your output,” Ms Hayden said.
She suggested that brokers with a permanent office are more profitable than brokers who drive to meet their appointments. “This makes sense as 'income producing hours' are not being spent in a car,” she added.
- Diversified business model
Opining that “a single broker offering one product is no longer a sustainable business model”, Ms Hayden said that time-poor customers often require a “holistic discussion” regarding their financial position.
As such, she said it is “beneficial to have key partners within the business to assist with the full suite of client requirements, as well as align with two or more brokers in order to leverage office support and reduce broker effort on administration tasks”.
- Performance tracking
“If you know your ratios and current performance, you know how many leads you need to attract in order to write your annual settlement target,” Ms Hayden said.
“Generally, industry statistics for leads to lodgement is 60 per cent; and lodgement to settlement is 80 per cent. If a broker applies their average loan size, then it is possible to calculate the total loan volume forecast within a year,” she added.
- Monthly marketing strategy revamps
Ms Hayden suggested that brokers should ideally be implementing a new marketing initiative each month.
She said: “It can help to brainstorm 10-11 ideas for the year and then select one to implement each month, starting with the initiative that provides the ‘biggest bang for your buck’.”
- Business disruption
Implementing an “ideas jam” on how brokers can continually improve and change to avoid disruption is one way in which brokers can ensure they are moving in line with customer expectations, Ms Hayden suggests.
- Work-life balance
Lastly, the COO emphasised that work should not come at the expense of quality of life.
“Success is the journey, not the destination,” Ms Hayden said.
“Running your own business is challenging and will stretch the best of us, but it is important to keep balance and enjoy the opportunity.”
[Related: Tips and traps for referral partnerships]