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LETS GET DOWN TO BUSINESS.

Question :
Hi, I am about to sign a franchise document for a mortgage broker company I have been part of for 2 years, this has been delayed with covid and there is some hesitancy with the market. It is a successful company of 14 staff and coping with the current climate but the market for us has changed dramatically. I have been with them 2 years as broker, bdm and basic marketing whilst in the franchise transition. We have heard that there is a huge number of properties coming to market after lockdown. We were predominantly first home buyers but it is likely investors will come back to the market. With a lot of hardship applications there may be some refinance opportunities. I’m not sure which direction to take as I am wanting to be sensitive to those struggling but I also need to provide leads to the team. Do you have any marketing advice? Thanks in advance

Question submitted 09/04/20 @ 05:12am
Industry: Property
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  • This is a difficult one to answer as to which way the market will go. There is a feeling that lots of kiwis (and other nationalities) want to come to NZ to live given the way the country has handled this. As such, we may see more demand from new buyers to the market who will require financing.

    The underlying message for marketing at the moment needs to be empathetic. People and health first. One of the best quotes I have heard recently is that “times like these are character revealing, not character defining”. He tāngata, he tāngata, he tāngata.

    Many of us are struggling with the issue of how to be sensitive to the community pain, alongside keeping our own businesses viable. The innate Kiwi value around “fairness” has a very dark side in these situations, where a significant portion of the public seems to feel that “I’m in pain, so it’s only fair that you should be in pain too”.

    I think that the property market will be fundamentally changed as we come out, but you may well be right about pent up demand. Refinancing will also most likely be significant.

    I’d suggest you don’t overthink it. Use your values to guide your messaging – and don’t feel you have to explain yourself to the general public. Do what’s right for your people and your business – if you’re not delivering value, you won’t get customers. If you are delivering value and getting customers, you’ll need a plan to manage any negative backlash from the general public (and potentially your competitors who may not be as on-to-it as you are).

    My advice to others in this situation is be clear in your messaging, don’t feel the urge to explain yourself in great detail, and try to ignore the negative comments. If you have an online presence where people can post comments, don’t respond to negativity, but answer specific questions only with factual information (not opinions or justifications), and only delete comments that are actually offensive. Get a thicker skin – but act in a way that you’ll be proud of when you look back in 20 years time!

    New Zealand will need businesses that come out of this fighting, and in particular, fighting to keep their people in jobs. Hope that’s even vaguely helpful.

    Oh, this is a hard one! In regards to your franchise agreement being signed, please ensure you have had sufficient professional advice and you feel comfortable that the price being paid now reflects the new reality.

    In relation to marketing, it likely is too early to be aggressive. There is going to be quite a dichotomy in the market going forward, with stretched owners needing to sell and the buyer market likely going to be circling with cashed up buyers wanting great deals. There will be a natural tension as to how the market will determine the new value, and some dancing while this settles to the new norm. It’s hard to say how it will go, but given the economic impact is going to be felt wide and far, it’s key to stay empathetic so as not to alienate particularly your supplier market. It’s a time to nurture relationships so that sellers know you are there when the time is right, listening to their situation. And for buyers, a time to build your database so that when the market opens and supply is there, you can have balanced conversations.

    Best wishes on your new business.

    Hi, I assume you mean that you are buying a mortgage broker franchise, i.e. becoming a franchisee. If you have worked there for 2 years you will have had the perfect opportunity to do all the DD required to get comfortable. This decision is a long term play and shouldn’t be influenced significantly by what’s going on at the moment.
    The first home buyer market will not go away and if you have developed a successful formula here, I’d suggest you continue to develop this market. However that said, what we are going through now will create opportunities, I believe you have identified a big one here – i.e. the refinance opportunity. This will allow you to work with customers when restructuring their debt/s and also supporting them if they need to downsize.
    You may be able to develop customer clusters i.e. first home buyers, refinance customers and investors, and build expertise that specifically relates to supporting these groups. When marketing to them you should use specific messaging that relates to each of these clusters – this will help to make better connections.
    You should view the market downturn or turmoil as a wonderful opportunity for you to build your business. Good luck, what a great opportunity and all the best.

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