Battles revolving around client retention take place all over the business world between firms large and small.
One of the latest, and largest, examples of this is the media hysteria regarding the launch of Facebook’s new ‘modern messaging system’ which aims to challenge the huge email players, such as Hotmail and Yahoo.
Inevitably one of the biggest reasons for this move is to ‘confine’ its users i.e. to ensure that there is no reason to leave the Facebook hub. The logic behind this is clear, as the holy grail for any business is to try and secure a client for as long as possible, with the ultimate goal of servicing them for life.
However, this is easier said than done, as competition remains a key component to any market dynamic.
A good way to retain clients is by constantly evolving offerings and ensuring propositions add value. It is vital for businesses to regularly evaluate themselves, their goals, their business model and their target audience, especially in the intermediary market.
It is not always easy to find the time to do this, but it has become evident that intermediaries not offering a range of holistic advice have suffered. For brokers, utopia is a client bank which remains 100% loyal throughout all the ups and downs of the market. Unfortunately, back in the real world, this level of loyalty is unachievable but certainly remains the objective to strive towards.
Client retention should not be viewed as a strategy or a tool – it is a philosophy ingrained into a sound business practice.
It’s an obvious statement, but how intermediaries interact with clients during the advice process and in the months and years after the mortgage or insurance deal is completed determines how likely they are to come back for repeat business.
In the initial client appointment, it’s prudent to elaborate on how the advice and mortgage process works. Brokers could even introduce some plain English regulatory information by explaining what duties and regulations must be adhered to in order to reassure the client in regards to business processes and responsibilities.
This is obviously quite a time consuming exercise and it’s important to get the balance right between how much or how little information is given, and the timeframe taken to do so. Time is precious, but by putting clients at ease and building a good working relationship, this is certainly time well spent.
Good intermediary firms will have robust training and development procedures in place for all staff members, but sometimes in a downturn this is one element that can drop down the list of immediate priorities.
Inevitably firms have had to undergo some cost cutting measures to cope with the market downturn and the timing and targeting of the right areas is crucial.
Staff training, marketing and PR are often the first areas which firms look to slash. This is a classic knee jerk reaction that must be properly thought through before implementing. However, these can often be tools utilized to strengthen the long-term future of a business.
Staff expertise and knowledge is paramount to a successful and efficient business offering, especially in terms of client retention.
Meanwhile, smaller businesses that have pursued active marketing strategies or at least kept them steady have tended to do well. Effective networking has also proved to be an important activity in promoting and protecting the business.
It is vital to really look after core clientele and communicate with them to ensure they are getting what they need to maintain business levels. It is inevitable that some people will stop using intermediaries for whatever reason but it is one of the biggest sins to neglect existing customers by focusing too much on establishing new ones.
Marketing and PR doesn’t need to be expensive. Keeping a client-bank up-to-date on new products and services has in fact never been simpler thanks to a host of technological advances. These advances mean that the vast majority of us can generally be contacted, reminded or updated 24/7 at the touch of a button.
Barclays has recently updated its IntroTrack service to ensure any broker submitting Woolwich mortgage applications automatically gets signed up for the service, allowing them to receive email updates at each of the six key stages. This has been implemented directly because of broker feedback. Advisers want to engage better and more frequently with their client bank, which has to be the first step in ensuring that they maintain a good level of service.
When looking at intermediary retention capabilities, we also need to incorporate some lender perspective. Of course, dual pricing, the direct market and fee charging are all factors which influence the retention process, but each of these demands a feature in their own right, so for now I will concentrate on product design.
There is no doubt that, despite some continued funding and distribution issues, product design is an important element in lenders’ retention strategies, especially for committed intermediary-focused lenders. Products have to remain competitive and enable intermediaries the opportunity to offer their clients access to good products combined with high quality levels of advice.
Products can certainly be designed to help foster longer-term client relationships. Offsetting, for example, provides borrowers with a tangible benefit for leaving their mortgages with an existing lender.
As savings rates remain low and mortgage borrowing requirements become even more difficult for some elements of the UK workforce, the need for holistic advice increases.
Contractors, small business owners and the growing legion of self-employed people have long been advocates of offset. With the regulator putting even more pressure on the self-cert and fast track market, it is little wonder that the flexibility offered by offset has become even more attractive to such pockets of society.
Current economic and market conditions only serve to further highlight the benefits and widen the potential audience for such a product.
Retention often reflects loyalty, but clients still need to see the benefits of remaining loyal. In light of this, Barclays launched a range of loyalty mortgages to reward current account customers for their continuing relationship. A product such as this can be used as a valuable communication tool for existing clients or even to revisit those lost clients who may, for whatever reason, have previously slipped through the net.
Attracting new clients or regaining old ones is not easy, but with imagination and a willingness to try different approaches it is far from impossible, especially if firms can service a range of financial requirements.
However, it is those intermediaries that are really servicing their existing client banks to the best of their ability that will certainly maintain the solid foundations on which to move forward in the future.
