How To Compete When You Can't Compete On Price
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EXPERT: Ameen Kamadia, MortgageMagic.info
Many loan officers feel the only way to compete
is by price. They think that if they have the lowest rate and fees, they should
be flooded with business. And in many cases this is true. Take a look at
Wal-Mart. They have become one of the largest companies in the world if not the
largest, and their main claim to fame is "Always Low Prices".
Does that mean no one can compete with them?
Hardly. Target competes, so does Nordstrom, and every other retailer in town. A
dollar spent at Wal-Mart is a dollar not spent anywhere else. So how do others
compete? Target stresses high design at low prices. Nordstrom stresses service
and quality at high prices.
Not everyone shops by price alone.
But money is a commodity right? One mortgage is
the same as any other correct? So what's a loan officer to do when others are
advertising lower rates than you have access to and no fees?
To answer this question I want to use
Circuit City as a case study.
A couple months ago I was in the market for a
Tomtom GPS navigation system. Online I went to pricegrabber.com to see what it
would cost me. Prices for this gizmo ranged from $699 to $599. Circuit City was
the most expensive, by a hundred dollars. Why would anyone pay $100 to buy the
same gizmo? So Circuit City probably doesn't sell any of these units at all
right? Wrong. They sell more then anyone else. The interesting thing is why.
They sell more because they can offer what the
others cannot. I saw one of their commercials just a few minutes ago. In it they
didn't talk about price, it talked about their main advantage - that you can
order online at their website and pick up the merchandise within 20 minutes at
one of their stores. And since you can pick it up at the store, if there is
anything wrong with it, you can also return it or exchange it at the store. You
can't do that with the others.
So when someone is buying one of these
gizmos they have to decide:
Do I want to pay less money, but pay shipping
and wait for it to arrive? Then take a chance that there might be a hassle if it
has to be returned. Or pay more, get it right away, and get piece of mind?
I ended up buying it at a Circuit City store
and paying $699. (By the way, their so-called price match guarantee is a con.
They don't match prices on the Internet.) I figured that since I was already
paying a lot of money for this thing, it would suck if it didn't work. And I
have had a ton of bad luck when it comes to electronic stuff not working for me
the way it is supposed to.
Would I have liked to save the $100?
You bet. But I wasn't going to risk it.
And that is precisely the mindset that many of
your prospects have when searching for a loan officer. They want to get the best
deal, but not if it means getting the wrong loan, or losing the house.
What you need is a benefit that others do not
provide even if you are more expensive. Come up with something that is unique to
you, like Circuit City's buy online and pick up at the store concept.
What can you do to add more "oomph" to your
service? When you come up with something, make it the focus of your marketing
instead of price and you can stop worrying about competing with others. Ameen Kamadia, "The Millionaire Loan
Officer" is a mortgage consultant, coach and trainer. For dozens of free
articles on mortgage marketing and cheap marketing ideas visit:
http://www.mortgagebrokertraining.com/mortgagemagic.htm
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