M a r k e t i n g t i p
Segmenting your focus leads to more new business and more repeat business
Part three of a three-part series on managing results for maximum success.
If each dollar you earn is equal to the last dollar earned, then a funded deal is a funded deal. So the simple logic goes. But even if the commission you earn is equivalent, not all funded deals are the same.
Brokers depend on two streams of business to be successful: new business and repeat business. You may define them as you choose - perhaps you classify multiple deals from the same vendor as repeat busines. Or, you may only classify multiple deals from the same lessee as repeat business. However you categorize new versus repeat business, the fact is you want as much of each as possible.
So right away we can see there is at least one distinction between deals - are they new or repeat business? The next question to answer is: which is more valuable? On one hand, repeat business shows maintenance of an important account. On the other hand, new business opens up new opportunities. Would you rather have ten deals fund this month that are repeat business, or ten deals fund that are new business? It's no secret that a solid plan for a successful financing brokerage is repeat business from a secure set of vendors. First you have to secure their business and you have to plan for attrition, so you'll need new business that will convert into repeat business.
If we assume that your goal is repeat business from a group of vendors, this changes what you measure as success. A deal is still a deal, but your goal is not to fund a deal, your goal is now to earn consistent business from each vendor. That makes the second, third and fourth deals from a vendor much more important than the first deal (or the twentieth deal) you fund.
Once you begin ranking the first few repeat deals as the most important, your measurement for success is feeding your overall strategy of building repeat business from a set of vendors. If you have to choose how to spend the next fifteen minutes of your day, the repeat deal should be prioritized above the new business. Each deal is still a commission opportunity, but the repeat business is more likely to help you earn more commissions in the future, too.
Repeat business from a group of vendors may not be your model. You may be a generalist broker, so you want a group of good customers who each have multiple financing needs. Your measurement of success may shift then to multiple deals from one customer. Or, your model may be more of a direct-response approach: book as many deals as possible by marketing to end-users via phone, Web, direct mail, etc. Your measurement for success may then be repeat deals from the same source like a print ad, direct mail campaign or calling list.
Putting a higher value on how you measure repeat business doesn't mean you should marginalize new business. You'll never have a second deal from anyone until you have the first deal. What it does mean is that the first deal is just a stepping stone to what really matters, which is the next deal. A shift in what you measure as success - the first deal or the repeat deal - will put you on a path to sustained business. Regardless of your model or your role in the overall sales process, the formula is to find sources of repeating success, improve upon those sources of success, and add new sources of success.
Many organizations split their staffs and resources into separate silos for acquisition and retention. Depending on your situation, this may or may not make sense. Challenge yourself as to whether you have your best acquirers spending time acquiring and your more service- and administration-oriented retaining accounts. Consider aligning your sales and marketing efforts according to new and repeat business.
With a stream of repeat business filling the coffers, you will have more resources to apply to attracting new business. As the old saying goes, it costs much more to win business than to maintain it. Measuring repeat business as success is a powerful long-term strategy for enabling you and your company to win more new business. In the end, you have more repeat business as well as a healthy supply of new business.
