SALES AND MARKETING

The pharmacy approach to being a mortgage broker

Paul Watkins on how to carve out a niche that you or your brokerage can become famous for. A road our pharmacies are also traveling.

I visited my local pharmacy today to pick up a prescription and an over-the-counter retail item. I walked past various dump bins of items, discounted at between 30% and 50%. At the counter I was offered smaller discounted items in counter displays, and the assistant asked if I had seen their amazing special on fish oil.

Except for the restricted pharmaceutical products, almost all their big selling retail lines were discounted. I do some work with pharmacies, and when asked why so many do this, their answer is invariably that since nearly all their retail lines are available elsewhere, such as supermarkets, health shops, department stores and some are even at $2 shops, they need to be seen to be competitive. These competitors don’t include mail-based sales from some very aggressive online discounting retailers. Pharmacies don’t offer any unique or proprietary products.

To add to their challenges, the suppliers

of those products are forever trying to find new distribution points, so you could argue that their suppliers are one of their biggest problems.

So how do they compete? How do they stand out in an increasingly crowded marketplace? How do they drive up customer count and customer spend? (While maintaining gross profits.) In the same way that mortgage brokers can. The fundamental difference between pharmacies and other retailers offering the same lines is advice.

The reason for writing about this, is that I have had smaller brokerages contact me in recent months, asking how to compete against the larger well-branded, high-profile brokerages.

Mortgage brokers may be able to learn from pharmacies. You do not offer any unique products. While you can search out great rates for clients (price), so can all brokerages and even direct contact with lenders can usually get the same result. So, what do you offer? The answer is advice or guidance or whatever you choose to call it. But then all brokerages say that.

Come back to lessons learned from pharmacies. As a rule, they cater for customers within a notable radius of their store, with most being deemed “community”

The pharmacy has had to make changes in light of fierce and increasing competition and it's working for those who have responded.

pharmacies for that reason. When they put dots on a map of their customer’s home addresses, the dots are often tightly grouped in specific suburbs. Most enjoy high levels of customer loyalty.

Many pharmacies have chosen to be specialist stores for groups of customers such as young mothers, retired people (home care products), sports-minded (offering supplements and workout powders), those with addictions or chronic illnesses requiring close care or other such niches.

Brokers can do the same and I’m sure you agree with that. However, what I rarely see is evidence of this. Advertising, websites,

social media posts, billboards and other forms of media for brokers focus on how they can get the “best rate”, “we negotiate with the lenders”, “take the hassle out of getting a mortgage”, “we are an award winning brokerage” and similar.

There is nothing wrong with such statements, as those are what prospective clients expect to see. But nearly all brokers use the same statements or explanations of what they do, from the one-person operation to the nationwide franchises.

So, let’s come back to the smaller brokerages that have asked how to stand out from the bigger ones. Smaller pharmacies with their own local brands that do well have a clearly defined target market, and this is something I rarely see in mortgage brokers. Who do you want for customers? What group of clients do you see as one you can genuinely help and that you enjoy dealing with?

The most common objection I hear to this approach is, “but I don’t want others to not use me. By saying I am an expert in X market that might stop others calling me”. Wrong. It won’t stop people outside of that niche calling at all. I can explain.

If I am looking to finance an investment property, surely I would want a specialist in that field, not the one that got my workmate into his first home, as I would see that one as a first-home buyer specialist. The easiest way to think of this is to consider how people search. Rather than search for the generic, “mortgage broker”, many would search for “rental property mortgage” or “investment property finance” or “what is the required deposit for buying a rental property?”. Most search in sentences, specific to what they wish to know, otherwise there

Have dedicated website pages for [your] areas of speciality and have them optimised for search terms and phrases.

are too many results.

To make this work, you can have dedicated website pages for the areas of speciality and have them optimised (search engine optimisation or SEO) for search terms and phrases. This will require some expertise, but it's not expensive. It comes back to thinking like a client. It's not hard to segment your clients into like-minded groups, from which you can create dedicated pages, social media posts and other marketing activities.

If I did one of those searches above, then I would click on pages that answered the question I was asking. You may well have pages for other services, such as first-home buyers, or even in other languages if that’s your target group (I saw one like this recently – well done).

Your website aside, the biggie in promotion is still social media and this is not going away. Be aware that over the Christmas break, Facebook made some significant changes to what you can and can’t advertise now and there are new rules around advertising mortgages and financial products. For example, the word “mortgage” is no longer an accepted word in Facebook ads. Ask your social media person about this.

The most powerful way around this is to offer “advice” in the form of education, not ads. Offer short videos or downloadable guides or slide shows on the steps to buying an investment property, the “4 critical things to do before applying to buy your first home”, “Are houses in xxx suburb really unaffordable?”, “What to do before attending a house auction” and similar. It's not hard to meet Facebook's new rules with a bit of thought.

So back to pharmacies. The big growth area for a pharmacy is services, not products. They are moving to offer consultations on minor medical issues, immunisations, low iron count, ECP, smoking cessation, managing stress, travel health and a range of specific medical problems. And it's working. The successful ones are adding to offering purely discounted products, by becoming the one you go to for “advice” in the areas they are becoming famous for. They still have a strong local base in their immediate community, but over the top of this is their speciality area, which brings people in from a far wider field.

In conclusion, my suggestion to the smaller brokerages who wish to stand out, is that you segment your current client base into groups based on their reason for contacting you. Then pick one or two of these to become famous in and devise a strategy for that group. This could include website pages, SEO, social media, informative downloadable guides and similar.

The pharmacy has had to make changes in light of fierce and increasing competition and it's working for those who have responded. The same concepts apply equally as well to brokerages. ✚

What used to work is always the thing that is going to put you out of business - Gary Vaynerchuk

A new book from Paul Watkins. Uber disrupted the taxi industry, Airbnb disrupted the accommodation industry, and social media is disrupting how financial advisers gain clients.

IN THIS BOOK YOU WILL LEARN:

How the old ways of prospecting for clients have been seriously disrupted by social media How trust is the new currency Why websites don’t generate leads The 5-steps to growing your perfect client-base using social media

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