When browsing on the internet, you do come across some strange snippets of information. I am not sure exactly how I ended up reading about a local community in Norfolk losing its post office, but it could not help but stick in my mind. A national wave of ‘rationalisation’ could have meant the end for the Cringleford Shop and Post Office, but thanks to a bit of quick thinking and good use of space, the savvy shopkeeper rented the old post office counter area to a local hairdresser, and voila – the Cutting Post salon was created.
Obviously, this turned out to be a roaring success – otherwise, I would not have read about it – and it just goes to illustrate the need for businesses of all sizes in all industries to think ‘outside the box’ amid challenging economic conditions. As illustrated, business diversification can come in many forms, and while I am not sure whether a broker-barbers would be a match made in heaven, great stock should be held in making the most of local resources.
Word of mouth is a very powerful tool in the local community, and there are many ways in which firms can market themselves to their immediate core target market. Making strategic affiliations with local estate agents, accountants and solicitors is certainly a start. But how many firms have thought of approaching large local employers, community centres or even church groups, to work out a deal to endorse them on their intranet or bulletin boards?
Firms may also look to share data with their local press about trends and what is happening in the mortgage market. Local media outlets are always looking for sound financial expertise, and forming a strong relationship could present a great way to get free advertising for your company.
Of course it is not just brokers who have to analyse how they do business in the current market. Lenders, clubs and other distribution channels have also had to change their tack too. At The Mortgage Alliance (TMA), we are working even more closely with our suppliers to ensure that the marketing and distribution of their resources are efficient and effective for all parties.
The time is right
There has never been a greater need to implement an even stronger support structure centred on the business. All sectors of the market have had to get closer to their clients, members or partners in order to ensure the right levels of services and offerings are being provided. This continued flight to quality ensures that distributors and intermediary firms will have to carry on upping their game in order to best serve the needs of their customers.
With this in mind, a good club will now not only possess this high level of support but also provide a wide panel of lenders covering all opportunities alongside a host of ancillary products and services.
The provision of support services has also become a vital component in a club’s repertoire and discounted alliances with leading technology providers, sourcing and client management systems are all important additions to any club offering.
Embracing technology and the opportunities offered by a good website will also enable firms to obtain more business and up the ante in terms of the range of services brokers can offer to consumers.
The term ‘diversification’ has been bandied around for quite some time now, but it has often been questioned whether brokers have really embraced it. However, there is growing evidence that brokers are becoming more active in new areas rather than simply registering their potential.
As a direct example of diversification, in July, TMA became the first directly authorised distribution channel to form a strategic affiliation with sale and rent back specialist Residential Property Solutions (RPS). The initial feedback that we received from members was one of ‘that’s great, but I’m not sure if I have customers that fit the profile for this product’.
However, soon after this launch, one particular member was open-minded enough to view this as a real option. This case, alongside others, has since progressed, thanks to having access to specialist help, and the member now has happy customers who are paying a lot less than the required bridging payment and who plan to use the buyback option in the future. Of course, the broker in question also received a healthy commission for the referral.
This is just one example of how brokers are using diversification, but the market demands that we, as an industry, continue to knock on the door of new sectors, evaluate all aspects of the market and in doing so new services, new revenue and new business alliances could spawn. I am not suggesting that it will be easy, and it is important that we choose our partners wisely, but the opportunities are still out there.
Yes, we may all have to work a little harder to undertake the necessary research and due diligence to ensure we choose the right avenues, but this is indicative of how successful small- to medium-sized business work throughout the UK, and not just within financial services. n
Phil Whitehouse is head of The Mortgage Alliance (TMA)
