We all know this last year or so has been one that none of us foresaw, but how we’ve responded as an industry has been nothing short of fantastic. Yes, the market has spent much of the year rebuilding to pre-pandemic levels, but a quick look at the range and volume of available products back on the market indicates we’re just about there.
Which of course doesn’t mean any of us have had a quieter year – indeed it’s been quite the opposite. With stamp duty deadlines and then extensions, as well as new government schemes to support buyers with smaller deposits, on top of pent up demand and buyers looking to move more than ever post-pandemic, you’ll be hard pressed to find someone in the industry short of new business. But what about existing clients?
When the housing market shut for a period of time last year, we saw increasing numbers of product transfers from brokers, but we hope it’s not the last of it. With this year’s largest mortgage maturity peak, brokers who have their eyes on existing business could reap the rewards – not only this year, but for many future years to come.
Get more for less
It’s said to cost up to four times more to attract new customers than it does to keep an existing one, and some studies claim the average repeat customer spends almost 70% more in their third year of the relationship with a business, than they do in the first six months. That’s why having a customer retention strategy can go a long way – building loyalty can take time, but it doesn’t need to be complicated or expensive – it just requires some planning. What you get in return though is invested customers who know your business and what you can help them with, and if you’ve earnt their trust and shown you’re one step ahead of them when it comes to what they may or may not need next, they’ll be much more likely to knock on your door for future support.
Don’t be late to the game
While it remains to be seen how many of the maturities will be handled by brokers this year, data released by UK Finance in previous years notes that the majority of product transfer business was on an advised basis.
That’s excellent news for intermediaries and creates opportunities to once again prove how much value you can add. At Accord though, despite all our product transfer reminder communications directing borrowers to their broker, we still get a number of customers coming direct, and once a client goes directly to a lender, they are very unlikely to go back to a broker again unless they move to a new house.
Take a look at your renewal pipeline and aim to communicate early and frequently. Ideally, you’ll look at least six months in advance to get on the front foot and will follow the initial outreach up with regular communication until you’ve retained the business or heard otherwise from your client. If you haven’t got a lead time, don’t consider it a lost cause, start now and act quickly on any leads. With people spinning many of life’s plates, a reminder will likely be welcome.
You’ve nothing to lose and everything to gain for contacting customers for something in their best interest. Most lenders pay procuration fees on product transfers – at Accord we pay 0.30% – so not only do you have the opportunity to retain and build business for future interactions, there’s also a financial reward.
Add value when it’s needed most
With so many clients’ circumstances affected during the pandemic, I can only think this year that the product transfer business is there for the taking. Last year presented changing situations for many. Some will have more money than before thanks to minimal outgoings on commuting or spending, while others may have been affected by furlough, unemployment or ill health. Whatever their state of affairs, the fall-out of the last 12 months or more has caused uncertainty, and there’s an opportunity to demonstrate the value of advice in ways clients may not have considered.
Taking the time to discuss all the options and possible scenarios which may play out over the coming months and years will ensure your client has a solid foundation to deal with the future, and highlighting how you can help them navigate this will be welcome.
Build future success now
Use this maturity peak to make yourself indispensable to your existing client base. There’s a huge window of opportunity, and if you can capitalise, with thought and consideration for your clients’ needs, there’s every chance your business will grow in ways you may not have previously exploited.
New business will always seem more appealing, but it comes at a greater cost. Making your existing business work harder, for less, and delivering advice that’s perhaps never been more needed will undoubtedly keep clients returning. And let’s not forget the importance of referrals – a happy client is worth many more, so any time you can dedicate to getting it right for your customer base now, will likely deliver greater value in the future.
Jeremy Duncombe is managing director of Accord Mortgages,
