Stepping into New competitive arenas to improve you trading skills
Brokers interested in business growth should view the expansion of their business as a series of measured steps, which is exactly the theme we are covering in this blog series. The first step you should take, according to leading consultancy McKinsey & Co, is to consider new competitive arenas.
It’s easy to grow comfortable with what you have and to resist change or expansion, but it’s impossible to achieve significant growth without stepping out of your comfort zone and into new competitive arenas.
We shouldn’t take continued growth of broker market share beyond 50 per cent for granted, as players from elsewhere in the mortgage value chain integrate a broker offering into their proposition. The recent MFAA and EY survey into the broking industry pinpointed competition as one of the top five threats to the broking channel, zeroing in on digital businesses as future disruptors. In a climate like this, it’s important to stand out and consider how you can beat competitors at their own game. Consider your position in the marketplace and analyse where it makes sense for you to expand next. While there is no right or wrong answer, each business should be able to identify where they may be able to find a new competitive advantage.
One practical way for brokers to branch out into a new competitive arena is to expand your business to include general insurance, wealth or conveyancing solutions.
Place yourself in your customers’ shoes – the loan journey can be stressful, and most of your customers will be juggling the search for a home along with a full-time job, the sale of their old home, managing family responsibilities and the myriad of other tasks that make our society so time-poor.
By positioning yourself more as a one-stop shop for your customers’ needs and expanding your offering to include general insurance, wealth and/or conveyancing solutions, you are adding significant value by saving your customer precious time. This could result in a significant revenue increase for your business.
Moreover, your customer will have already built a relationship with you and you will understand their goals and needs, so it makes sense for you to work with them. It means they will not have to start a new relationship from scratch.
If this sounds like too big a step for your business, you can also think of smaller ways to expand your offering into new competitive arenas. Instead of adding insurance, wealth or conveyancing to your business, partner with another firm that specialises in this. A trusted business partnership can be beneficial for both parties, as you can work together to meet a wider range of your customers’ needs. To make the most of your business expansion, you should ensure it is coupled with an effective marketing strategy. You need to make sure your customers are aware of your new offering if they are to take advantage of it.
Consider sending a direct mail explaining why you have made this business change and how it will benefit your customer. For maximum effect, you should also send this message out through your social media channels (Facebook, LinkedIn, Twitter).
There is no one single way to grow your business, but with critical self-analysis you can determine which strategy will work for you. In my next blog, I’ll look at how geographic expansion can be used as another way to evolve your brokerage.