“Experts Win on Value — Generalists Die on Price” is a quote by well-known marketing guru David Newman, who I think is a smart sales consultant. Similar to Seth Godin, Newman is right on the money when it comes to succeeding in today’s attention-deficit selling world. Newman contends that selecting a niche or specialty and delivering value to your target audience group is a more effective way to stand out from the competition than simply offering a lower price on your products and services.
Unfortunately, many originators fail to specialize in a particular area for fear of losing business. While understandable, the reality is that niche marketing is a better strategy than price-based initiatives. Let’s take a closer look at why this is true.
With more than 400,000 originators in the U.S., it is more challenging than ever for producers to distinguish themselves from the rest of the pack in the eyes of consumers and referral sources. Being pleasant and offering an attractive price point is no longer enough to earn current and future business from target audience groups.
According to Newman, a generalist positioning is really about an originator knowing their subject matter and customer base “an inch deep and having to market a mile wide.” This marketing approach is expensive and only large corporations can afford to implement it profitably. A more cost-effective strategy is for sales professionals to develop an area of expertise and narrow their outreach to prospects and referral sources interested in that specific niche.
Specialization in Sales
Today, specialization is prevalent across the board. From 3-point basketball shooters in sports to interventional cardiologists in medicine, specialists exist in every field. The sales arena should be no different.
While deciding what you want to be known for is difficult, it is a necessary step if producers want to market effectively in 2020. Selecting the right niche requires originators to conduct in-depth research into target audience groups; and objectively assess their own talent and strengths.
Originators who fail to provide a compelling reason why prospects should do business with them will be left to play the “how-low-can-you-go” price game with their competitors.
According to the MBA’s industry forecast, refinance business is expected to be significantly lower in the next few years. This should be a wake-up call for every originator who now must decide which market to sell to for optimal sales results. Establishing a personal brand or niche enables sales professionals to gain greater visibility in search engines and as a go-to contact within their sphere of influence.
Originators who are not top of mind in their respective markets will have to depend on their lenders for leads which often means reduced compensation and lower personal income. Those who become brokers might potentially earn higher pay-outs but not everyone is suited to be self-employed. There is sufficient data to support that most self-employed individuals are out of the business in 3 to 5 years. The practice of moving from one lender to another is also not a good solution because there is no guarantee that an originator’s customer base will move to the new lender.
So, what can originators do to improve their selling success? The first step is to nail down what you want to be known for. Then, align your communication tools and marketing messages with your targeted niche. Every six months look at your results and fine-tune your marketing strategy accordingly.
Don’t let declining interest rates determine your income level. Implement a niche marketing strategy today!