AFG Competition Index – September 2016

Refinancers shop around

Australians refinancing their home loans have turned to the non-majors in the past three months in their search for savings, according to the latest AFG Competition Index.

AFG General Manager of Sales and Operations, Mark Hewitt explained the shift. “The non-majors have increased their share of the refinancing market from 31% to 36% in the last quarter.”

“ING are the big winner, lifting their share from 3.1% to 7.8%. CBA has taken a back seat dropping their share of the refinancing market from 20.2% to 14.6%.”

The decision in August by the Reserve Bank of Australia (RBA) to drop the official cash rate saw a flurry of activity by lenders with most choosing to pass on a cut to their own rates, but the level of discount was varied. Lenders also typically passed on a greater interest rate cut to owner-occupiers than to investors and many delayed passing on their rate cuts for several weeks after they were initially announced.

“In terms of overall mortgage sales, ING are at a 12 month high on 5.2% of the non-major market. This is at the expense of Suncorp, who are now sitting at 1.8% after a peak of 7.6% of the non-major market back in March of this year.

Competition between the majors for the investor market saw a number of changes to market share across the quarter. CBA pulled back to close the quarter at 19%, however still tops the list with ANZ jumping to second place with 15.7% and Westpac showing a steady lift of their share of the investor market across the quarter to now be sitting at 15.2%.

“Westpac also cemented their position as the lender of choice for First Home Buyers. They now fund nearly 24% of all First Home Buyer loans.”

The traditional jostling for position that occurs across the market as a whole was again evident in the results for the majors. “Across all mortgage types ANZ and Westpac both regained market share to close out the quarter at 16.9% and 13.8% respectively. At the same time CBA pulled back from pricing discounts to drop their share to 17.5%,” said Mr Hewitt.

Record low interest rates have also seen fixed rate products in hot demand this year. “ANZ has doubled their share of the fixed rate pie since April, with their total share of this market now sitting at 24%,” said Mr Hewitt. “In the same period CBA has seen their share of the fixed rate market shrink by 67%”

“For the non-majors chasing those looking to fix their interest rate, ING was again a winner doubling their share of that segment of the market.”

Download full report: AFG – Competition Index – September 2016

Generating new business via referrals — what do I need to know?

It goes without saying that generating referrals is a great way to build your business, particularly in an industry where so much of your business comes from the word of mouth of happy clients telling their friends and family about the great products or services your provide.

The best thing about referred business is that the contact who walks through the door?or picks up the phone to call you, is already motivated and most of the selling has been done for you. They’ve?been sent by someone who was impressed enough to pass on your details, so they already have the trust and confidence in you.

So, how do you go about encouraging your happy clients to actively promote your name to their mates, family, and extended networks?

It’s pretty simple, just ask them. Let them know that this is how you build your business?and give them clever and easy tools to help them do so.

If you don’t ask, you don’t receive. Yes, we know — this is something your mother probably told you, but it still rings true. Work with your customers when a deal is on the table and you have their full attention, and touch base with them after the dust has settled give them that post-sale service they may not be expecting – take all these opportunities to remind them to refer you. If it doesn’t easily come up in conversation or you find it a hard subject to raise, simply include a referral reminder on your email signature. Something like ‘PS – My business is built on referrals from great clients – please pass on my details’ works well as a gentle reminder. Use similar wording on your letters and other communications with your clients.

Do the hard work for them.?Don’t rely on your clients fumbling for your business card that is hiding somewhere; keep in touch with your clients on a regular basis so that your email address is front and centre for them,

Credit where credit is due.?Say thank you and say it loud and often. If a client refers a new client to you, send them a thank you card or email or pick up the phone and call them just to tell them how much you appreciate their support. You can even follow up with something you know they’ll like – a magazine subscription or voucher, a bottle of red, or a great book that is related. Often it can be considered an unnecessary expense, but just think, it may cost you $300 for a local press ad that may generate a couple of calls and one appointment, but $40 on a magazine subscription or bottle of wine to a client that isn’t expecting it is a great return for that one brand new client, and will probably encourage them to refer you ten times over. A quick shout out on your social media sites is a good idea too to prompt other clients to do the same thing – “Happy to help the mate of a great long-term client today with the right [product/service]. ?Thanks to all of you for your great referrals that help me grow my business.”

Don’t forget the bigger picture.?All marketing initiatives and tactics work best when they are part of a more comprehensive strategy that entails elements such as growing your industry networks, talking to your local media and encouraging them to run a piece you pitch to them and being an active member of your local community. Often a client will refer you but it’s not until that prospect is reminded of you via something?they’ve?read about you in their local paper, or seen your latest social media post on Instagram or Facebook.