The last step in McKinsey & Co’s Staircase to Growth is maximising existing customers. Every growth-oriented broker knows the value of loyalty. Loyal customers are likely to return to you with their future financing needs, and they are also more likely to refer you to their friends. Broking should never be considered ‘set and forget’, and you should maintain the relationship between you and your client well beyond the first loan interaction.
One practical way you can do this is by ensuring your database is kept up to date, and that you are using a sophisticated Customer Relationship Manager like Podium, powered by Salesforce, that has the capacity to automate messages to your customers on significant milestones. This could include sending them personalised, automated messages such as a “thank you” following settlement, wishing them happy returns on a birthday, or offering them loan health checks on loan anniversaries.
These reminders should tread the delicate line between helpful and overly persistent, ensuring you are providing your customers a friendly reminder, without intruding on their space.
Another practical way to maximise the potential of your existing customer base is to ensure you have a well-thought through segmentation strategy in place.
Segmentation has to be one of the key success factors for any broking business. Segmentation means splitting up your client database into various segments according to either loan size, revenue generated, services provided or life stage, for example. Segmentation recognises that your clients fall into different categories and will have different needs. By grouping them, you can cater to their preferences in an efficient way, and employ different strategies for each category.
The way you measure whether your segmentation strategy is successful is by reviewing whether you provide different services and benefits to each segment.
Ensure you have a top tier of ‘A class’ clients that comprises no more than 20% of your client base. Work to bring some of your ‘B class’ clients up to this higher level – but remember to give your top customers the attention they deserve.
The benefits of an effective database, a segmentation strategy and using one system to manage and communicate with clients, can be measured monetarily too. According to PLAN’s BEAT report – our self-diagnostic business analysis tool – people who can readily access the details of prospective clients and effectively communicate with them generate on average $200,000 more revenue per principal than those who manage their prospective client information separately. As you can see, it’s a small change with a big impact on your bottom line.
With this advice, we have reached the last step on McKinsey & Co’s ‘Staircase to Growth’.
The most important thing to remember when considering how to approach business growth is that there is no one single solution – or magic bullet. I hear many brokers speak of diversification as the only pathway to new business. However, as I hope this blog series has shown, there are many different ways you can evolve your offering,
Growth strategies need to be tailored to the strengths of your business, and your long-term goals. Take the time to critically reflect on your offering, and seek third-party help as required to work out where you can improve.
Every broking business needs to grow and evolve to stay relevant in the dynamic market that is the broking industry. With so many tools on offer to assist you to innovate, there are no excuses – every broker can be growth-oriented, and work towards a bigger and better business..