There must be a few good reasons why branded groups have gone from strength to strength over the past five years.The Adviser finds out what they bring to the table, and why brokers like what they are offering
One of the most commonly overlooked sources of competitive advantage is brand power. Branding is not just advertising, nor is it simply a catchy name for a company or product. It is about creating the desire for a product, about making it distinct and compelling.
Arguably the most important element in a brand is the value that it holds for customers. But as important as it is, it is also a value that is difficult, and often expensive, to build. Which is why so many small businesses tend to avoid spending time and money on it.
The Australian mortgage broking market is no different. This is a shame, because a well-developed brand is a powerful business tool that provides a significant competitive advantage.
Fortunately for mortgage brokers, while it might be a shame it is not a terminal condition.
There is another way out – another way to enjoy all the business benefits of brand power – and it is to join up with leading, established branded groups like Aussie, Choice Home Loans or LJ Hooker Home Loans.
These groups have agreed to share their brand power experiences with us. We wanted to know what it is that makes the value proposition of joining a branded group so appealing and what brokers should consider when looking to do so.
Jeff Chapman, national product and marketing manager at LJ Hooker Home Loans, says that in the mortgage broking world, brand strength – and the inbuilt recognition and trust it brings – is very important.
“The Australian mortgage market is very competitive, so having a brand that stands out complements the work mortgage professionals do on the ground,” Mr Chapman says.
Furthermore, hooking up with a brand that has already been built, where the money has already been spent, makes good economic sense, given the significant reductions in infrastructure cost that doing so provides.
The LJ Hooker brand also comes with in-built trust, another important link in the business-building chain.
“The trust element helps us as we set up our shopfronts across Australia,” he says. “Linking our brand helps transition referrals across from our real estate network as it becomes seamless for the consumer.”
According to Choice Home Loans, a solid, recognised brand with a national presence also helps brokers to cut through the noise and connect with borrowers looking for a home loan provider they can trust.
CEO Stephen Moore says the group has put a lot of resources into developing specialised business support platforms in recent years.
The result is an increase in the number of top Choice Aggregation brokers moving across to start a business under the Choice Home Loans brand.
Choice’s formidable size and scope has facilitated this large-scale investment in its branded business, allowing it to provide leading edge business support to brokers.
For Aussie executive director James Symond, it’s all about the brand. Brands conjure up images for consumers, he says – whether it’s trust, fun or respect.
Aussie considers its brand to be more than a purple and yellow logo. Representing trust, integrity, systems and support, Mr Symond calls it the business in the box – the whole package.
“With the Aussie brand by their side, brokers will find themselves running a better business – an easier business,” he says.
Support and systems
Training is the backbone of the support structure at Aussie. Mr Symond describes the group’s training and education program as a “standout”, and something of which the group is very proud.
Aussie offers an MFAA-accredited diploma and mentoring program; a two-year business academy; an online learning portal with over 200 modules; and refresher workshops and coaching, with state managers in marketing, recruitment and credit, as well as retail and mobile business and sales leaders.
“This means that Aussie brokers are highly trained and can focus on delivering a superior customer experience while driving their business to financial success,” Mr Symond says.
Aussie sales events are a particular highlight: “We have a program of quarterly, annual and bi-annual events that connect, stimulate and allow us to celebrate our brokers,” Mr Symond says, adding that feedback from Aussie brokers and lending partners is consistently positive.
Aussie also continues to invest and build on its online capability in CRM systems. “These are a big part of what helps our brokers make their businesses more efficient and productive,” says Mr Symond.
LJ Hooker Home Loans’ Mr Chapman says operating systems and processes are vital, but what is becoming even more important is lead generation and, crucially, how brokers’ systems help to capture a lead, manage it, and report on it.
LJ Hooker Home Loans has built and is currently making significant upgrades to several of the platforms that deliver leads from its real estate network.
And to back up its integrated real estate and home loans training courses, the group has also invested heavily in compliance and training systems that provide web-based material.
“We also offer our unique hub that provides easily accessible marketing material and merchandise,” says Mr Chapman. “Our real estate brand has an 85-year-old pedigree in franchising.
Our home loans business is in the enviable position of being able to work off the back of that knowledge and technology.”
Choice Home Loans’ support covers recruitment and retention services, marketing and business coaching and state-of-the-art technology as well as an award-winning white label solution.
“Providing tailored business support is a key component of the Choice Home Loans service offering,” says Mr Moore, with ‘better advice through better listening’ the platform on which the business offering rests.
Practice development managers act as business specialists, providing strategic planning and business coaching to help with business efficiencies.
In addition, Choice Home Loans’ peer to-peer learning sessions allow brokers in geographic proximity to team up and develop best practice protocols.
“Our culture of collaboration means our members have the opportunity to learn from top-performing brokers who live and breathe the industry every day,” says Mr Moore.
Marketing and lead generation
Anecdotal feedback suggests Choice Home Loans’ brokers particularly value the marketing support the group provides, says Mr Moore, since it helps them to build a credible and trusted profile within their local markets.
“From producing client newsletters and marketing collateral to initiating new programs, we work hard to support our brokers across a range of marketing needs,” he says.
Recently, Choice launched a local area marketing portal which supports brokers in running their own campaigns.
For many small businesses, finding the time and resources to develop such marketing material is a challenge.
Choice Home Loans’ centralised marketing expertise allows brokers to concentrate on what they’re good at – looking after their clients.
Lead generation is also an important component. Brokers have a chance to receive extra leads in addition to those they generate themselves. Often these leads are outside the brokers’ usual networks, which helps in building client data and referral opportunities.
“Our members really value our lead support as it allows them to consistently build their customer base with very minimal time and effort,” says Mr Moore.
In addition, the branded broker group recently launched a bespoke loan comparison tool. The tool lets brokers compare loans from a range of lenders and then talk directly to a local broker for further information.
Over the past 23 years, Aussie has invested “hundreds of millions of dollars” in building and promoting its brand. The momentum it creates has put Aussie in the top five home loans brands in the industry, and of those it is the leading mortgage broking brand.
This is an achievement of which Aussie is particularly proud, says Mr Symond.
But pride alone doesn’t bring in the bacon; brand strength and longevity does. And these two qualities have helped Aussie attract new customers by giving them the confidence that they are benefitting from many years of experience and knowledge.
But again, this isn’t all Aussie relies on. “We have marketing managers in every state that coach and support our brokers, teaching them how to market their business and build their personal and business profiles locally,” Mr Symond says.
LJ Hooker Home Loans’ brand strength helps its members with marketing, lead generation and sales in a number of ways. Initially, it links them to their real estate partners under one roof – in more ways than simply a referral arrangement.
“It links real estate and home loans as one team as they are at company and networking events together, running community events together, and building the same brand in their local communities,” Mr Chapman says.
LJ Hooker Home Loans brokers become part of something bigger. The group gives its franchisees a trusted consumer brand to leverage off for local area marketing.
And, says Mr Chapman, LJ Hooker Home Loans backs that up with strong marketing support in all the significant channels, including digital and print.
Also, when it comes to online lead generation, LJ Hooker Home Loans benefits from running real estate and home loans lead campaigns that both groups share in, in effect doubling the chances of lead capture.
Making the switch
Since most branded groups are franchise-driven, interested brokers have to ask themselves whether or not they want to run as a franchise.
This offers some very cost-effective benefits, but the potential downside is franchisees don’t own the brand, so they have to be comfortable with that.
“If you want peers to bounce and share ideas with to help you build your business, then franchising is a great option,” says Mr Chapman.
Next, brokers should look at the systems on offer, and determine what is important to them – as well as which skills they lack.
And look to the future, he says – ask about technology and the franchisor’s five-year strategy. “Branding and technology will wrap around ground -level relationships to drive success in the future,” says Mr Chapman.
Deciding on whether to go with branded support – or not – is simple, Mr Symond explains: Ask yourself if you would excel more by being part of a large, branded, supported team, or would you excel more by going it alone.
Both models work, he says, so it’s down to the individual.
Culture is another thing to consider, Mr Symond adds.
It is the final point of difference required to take a business from being good to achieving greatness – and it is a big deal. Mr Symond says it is his “genuine belief” that Aussie is the success it is because of its culture.
“Sure, structure and systems need to be there and we believe we have that in spades,” he says, “but I believe we have this genuine, integral and entrepreneurial culture that is the important driving force of Aussie.”
Mr Moore says it is essential to take the time to consider whether a branded mortgage business is for you – and if so, which brand is going to be the right match for your personality.
“If you’re considering a switch, determine exactly what it is you want from a partner. Think about your own skill set and from there see where you most need additional support,” says Mr Moore.
Next, stress test the various offerings available, he advises. Look well beyond the sales pitch. Some brands might invest a lot in national advertising for instance, but they may not be as dedicated in terms of on-the-ground support.
Switching between groups may involve some administration and a transition period, so it’s important to be prepared for that, he says.
“At Choice Home Loans, we do our best to take the hard work out of the transition phase, so our brokers can feel confident their business is in good hands,” says Mr Moore, adding that the transition period actually provides a nice window for strategy planning.
Mr Symond believes Aussie can train any quality individual to be a professional mortgage broker – “and we’re one of the very few in the industry that consistently does this”, he says.
At the other end of the spectrum, Aussie has some of the industry’s most experienced and successful brokers – more than 50 per cent of Aussie brokers have been with the brand for over five years, while more than 25 per cent have been there for over 10 years.
“Why?” asks Mr Symond. “Because we have a long-term pathway for success.”
Mr Moore agrees that a branded group can suit every sort of person; it all comes down to business objectives. In fact, he says, there is considerable interest in Choice Home Loans from brokers currently working under their own brands.
“So even if you’re an experienced broker with an established business,” says Mr Moore, “joining a branded group can provide an opportunity to reinvigorate your brand, along with your overall business.”
Mr Chapman, however, believes branding and franchising are not suitable for every mortgage professional. “It’s a balance between control and support and it really depends upon the business owner’s skill set,” he says.
Being part of a branded group can be great for a start-up. Whether they are coming from a bank, still new to the industry, or transitioning from loan writer to business owner, a branded group can offer the support, and in some cases, the leads brokers who are new to the game need.
Operations – franchise or not?
Mr Chapman calls franchising a ‘niche skill’ – some businesses have a great track record for doing it right, and some don’t.
In the end, it’s not a case of one model being better than the other; rather, it’s the different value propositions they bring, both to the broker and to the consumer.
“You have to choose what works best for you,” he says, “and what model you think will drive better customer interactions.”
A non-franchise group will offer brokers the opportunity to take on their brand, but their offering typically ends there. Usually, this type of group will only offer brokers support services at an additional cost, says Mr Moore.
In contrast, a franchise group will offer brokers a broader suite of business support systems.
“At Choice Home Loans, this includes a leading CRM system, business coaching, training and recruitment support,” he adds.
There is no single solution since it all comes down to the individual broker.
With Aussie, for example, it’s possible to be a mobile broker and work from a state office or from home, and run a very successful business as part of a large team, with support, but more independently.
Alternatively, you can apply for a retail store, get the leads from the area and work within the area, really become part of the community.
They are both great business models, says Mr Symond, but like choosing between a branded or a non-branded group, it comes down to the individual.
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