The secret the having a thriving mortgage broking business is to absolutely nail your positioning.
Positioning will separate you from all the other brokers out there. It will make you look unique – stand out from the crowd. It will make you irreplaceable. And when that happens, your clients become incredibly loyal and talk to their friends about you (referrals).
If you don’t position your business correctly, you’ll get lost in the crowd and the only way to compete is on price (i.e. the broker with the lowest rate wins… and that’s not a race you want to win!).
Apple is the best example of excellent positioning. As a result of its perfect positioning, it’s market share in the US is only 35% however it generates 80% of the total (mobile phone) industry’s profit – it doesn’t want the remaining 65% market share as there’s little profit in it!
My 6 minute video below further explains the concept of positioning, how to do it and where I believe brokers need to position their business so that the thrive over the next decade.
How does your business differ from the service provided by a major bank, Aussie Home Loans, a financial planning practice?
It is important to understand market positioning and where your business fits in because it determines who you target (clients), how you target them, and how to market your business (messaging). If you get your positioning right, your business will stand out from the crowd. And you create a business that is unique. Once you have done that, you no longer need to complete on price.
Too many brokers confuse the products they sell as the service they provide. Just because we all sell home loans does not mean that we are all the same.
The chart below illustrates market positioning. On one axis we have services i.e. do you only sell home loans, or do you want to look after all your clients' financial needs? And the other axis we have relationship i.e. does the client feel like a number or do they feel like you human - part of a business, a family, a tribe?
The banks and large broker businesses tend to be transnational because relationships don't scale - and big business loves scalability because that is the quickest path to profitability. Super-brokers (who settle > $80m p.a.) master the relationship bit and are seen as advisors, not sales people.
I believe that you need to operate in the blue rectangle to have a sustainable business i.e. either become a super-broker or look after your clients' holistic needs. Either way you are in the relationship business. Relationships cultivate trust and trust trumps price every day of the week!
Question: Where do you currently position your business? Are you unknowingly competing with big brands like Aussie and the banks?
Question: Where do you clients think you are positioned?
The best way to communicate positioning is to make reference to an existing market - something that is well known. For example, I would say that comparing a large broker business or bank with a niche broker is like comparing Chemist Warehouse and your family GP. Your family GP isn't there to sell, they advise, treat, diagnose. You family GP gets to know you - you deal with the same person every time you have a problem. A family GP business is orientated around their patients, not the drugs they prescribe. This might be a perfect analogy to describe the positioning of your business. Once you do it in this way, you find prospects "get it" and the right prospects are magnetically attracted to your business.
There are 5 things that broker must nail to operate in the blue rectangle:
I am going to teach you all these things in the next 100 days.