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Reaching your goldmine

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  • 26/03/2002
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Existing clients are often forgotten in the race to expand, but having already used your services, they represent a lucrative source of business

It is a much-quoted fact that around 80% of your business comes from just 20% of your clients.

While it is always worth advertising and taking steps to increase your client bank, with most of your business coming from your existing clients, this lucrative source of business should not be ignored.

‘Not surprisingly, the acquisition and servicing of new clients is the main priority for most mortgage advisers and IFAs. While usually extremely profitable, activities relating to the servicing of existing clients tends to take a back seat and may only be reserved for when business is quiet,’ says Phil Calvert, proprietor of Training Strategies.

He adds: ‘Servicing existing clients should be part of the daily routine and advisers should schedule their time to include one hour a day focusing on business-generating activities from their existing client bank. I stress business generating ‘ not just general servicing.’

It is all very well highlighting how much business can be gained from your existing clients, but how can you use the data in your files to actually generate more business?

One of the most profitable ways of generating more business is to try and boost your mortgage protection sales.

‘The sale of protection products is likely to be the most profitable use of your time, particularly with those clients who already have some cover,’ says Calvert. ‘These clients have at least recognised that some cover is better than none, and are more likely to buy further products at some stage. Even if they only have term assurance, there is a strong likelihood that if the policy is four or more years old, the premiums will have decreased. This presents a good opportunity for advisers to revisit the client with a new quote that this time includes critical illness. The increase in premium will have been offset to a large extent by the reduced term assurance premium.’

Another good sales technique is to take note of mortgage clients’ birthdays, according to Calvert. A few weeks before their birthday, write them a letter detailing quotes for critical illness and term assurance before and after their birthday. Also illustrate how much rates will rise over the next few years so they recognise the benefits of buying cover sooner rather than later.

Use technology

But trying to monitor the changing circumstances of your clients can be difficult when their details are hidden away in filing cabinets. Technology, however, can help you get round this obstacle, according to Mark Howell, marketing manager of Pink Home Loans.

‘Brokers must have a manageable way of accessing data ‘ too many people still hold paper-based files. Electronic filing is key.’

Howell recommends that advisers use software such as Microsoft Access. This enables brokers to create an electronic customer database which holds a list of clients names and addresses, allowing them to do easy mail merges for mailshots.

Key dates can also be added to personal files, helping brokers mine their data more effectively. ‘By doing a sort on key dates brokers can create a list of clients whose redemption penalties are coming to an end, or those who were sold ancillary mortgage products that may now be eligible for renewal,’ says Howell.

Rob Clifford, managing director of mortgageforce, agrees: ‘By using the software’s diary, work out whose fixed rates are coming to and end. Send them a letter four to six weeks beforehand and tell them how much their rate will rise by ‘ then offer to speak to them about remortgaging opportunities,’ he says.

Also watch how much house prices are rising in your local area. ‘If house prices have risen substantially use the system to send out a mailshot to clients with the message that they may now have much more equity in their house. It is worth telling them how much their capacity to borrow has increased and of the opportunities to release capital,’ he adds.

Tailored software

As an alternative to generic database software, advisers can opt for a more tailored piece of software specifically for financial advisers, such as Office-web from IFA portal, The Exchange.

This is essentially a business administration system for advisers, which is based around a central client database. Miriam Leach, business development manager at The Exchange explains: ‘Office-web integrates everything an adviser needs to run the back-office from product details, through to accounts and commission tracking. And by having an electronic record of each client it makes it easier to identify sales opportunities.’

Centralised storage can benefit firms where more than one individual needs access to client records, preventing important documents or records being mislaid or lost.

‘Having access to client records electronically means everyone that needs the files can access them. The system can show a client’s contact details, their history ‘ in effect a single view of each client with all the necessary documentation.’

So the benefits of storing client details electronically are clear, bringing a number of high level of benefits to firms, be they one-man bands or larger operations.

‘These tools enhance client service levels, reduce the level of administration work and provide advisers with more time to focus on sales. It also makes it easier to support a larger number of clients with fewer administrators,’ says Leach.

Clearly transferring from a paper-based process to an electronic one can take time, but by all accounts it is a worthwhile investment. According to The Exchange, advisers adopting this strategy have seen sales from existing clients increase by 20%.

Rachel Williams is editor


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