The key to growing your business is to turn away certain clients and focus on a niche. Wait, that doesn’t make sense, does it? According to two industry players it makes all the sense in the world.
“Most of the advertising being done by other mortgage companies seemed to outline every mortgage product imaginable in a single ad space,” Jackson Middleton, VP of sales for First Foundation Residential Mortgages wrote in CMP’s Top 75 issue. “I realized that most brokerages wanted to be everything to everyone and took a generalist mindset. This created an opportunity to market myself as more of a specialist.”
Middleton applied the 80/20 rule – which posits 80 per cent of business comes from 20 per cent of clients – to his mortgage broker business and sat back and enjoyed a more efficient and more profitable model take off.
“I stopped doing B-deals, rental clients, self-employed clients, commercial files and reverse mortgages so that I could work with needy first-time homebuyers,” Middleton wrote. “Sure, it was hard to turn away business at the beginning and it was hard to get past the idea that turning away business was a good strategy, but it actually turned out a lot better than I had anticipated.”
It’s a strategy other brokers have also employed and enjoyed.
“I think that we as brokers are afraid that any kind of specialist approach will cut out valuable future business, especially if the economy slows,” mortgage broker Mark Ho told CMP Magazine. “I have taken the opposite approach and have specialized in first-time buyers who are generally young professionals; they are people I naturally connect with and am able to network with in order to grow my referral business.”