Once you have developed a “working knowledge” of factoring and the key products all brokers should know about, the actual WORK associated with becoming a successful broker begins. It’s now time to start amassing the marketing and business development knowledge you will need learn so you can thrive as a freelance broker and begin building your book a residual income commissions.
Direct Marketing vs. Networking
There are two primary methods used by consultants to land clients. They are…
- DIRECT MARKETING: An advertising methodology where you will use telephone, email, direct mail, classified ads, websites, canvassing, etc. to market directly to prospects (business owners). Direct marketing is often referred to to as “direct response” marketing because all direct marketing campaigns are designed to elicit or draw a response from the prospect. All direct marketing utilizes “offers” to get the prospect to respond by placing an order or requesting additional information. Direct Marketing will tend to develop business faster, but will also be more expensive than networking.
- NETWORKING: Unlike direct marketing which is designed to get a prospect to “ACT NOW”, networking is utilized primarily to build relationships with those that can send business your way. As a factoring broker, one of your goals is to build relationships with bank loan officers, accounting professionals, and those associated with business incubators or small business support organizations (SCORE, SBDCs, etc.). Networking is typically very inexpensive but building quality relationships is a slow process. Clients acquired through networking will typically take a longer time.
The good news is that recent polls taken in the factoring and commercial finance industries reveal that both of these methods work equally well, with about 50% of all new clients developed as a result of direct marketing and 50% as a result of networking. Which you primarily focus upon as a broker, simply depends on you and your “people skills”. Some brokers operating in rural areas are limited as to their ability to network face-to-face and are limited to networking on social media and utilizing more direct marketing. Other brokers located in larger cities may focus the business development efforts on networking entirely so they can develop quality sources of referral. How you choose to run your business development operation is strictly up to you and, to some extent, what soft skills you bring to the table.
Developing Your Marketing Skills
Some entering the freelance brokering community think they have to acquire “sales skills”. That is absolutely not the case. Factoring consultants tend to operate more as “educators” than salesman. They simply provide information to small business owners and then stay in touch over time, waiting until the need for financing arises. You cannot sell factoring. A business either needs it or it doesn’t. If a business needs money, it either has access to bank financing or it doesn’t. Your job, as a broker, is simply to find those business owners that…
- Have a working capital or cash flow problem and need money
- Do NOT have the ability to qualify for a bank loan (about 80% of all business owners are turned down for traditional loans)
Much of being a successful factoring broker lies in building lists of prospective clients and staying in touch over time. True, active brokers using direct marketing techniques will uncover business owners that need factoring services immediately. Most clients, however, are generated over time using such techniques as “drip” marketing.
Very few new brokers entering the factoring industry have the marketing skills they need to thrive from day one and they will need to develop those skills. Some will need to develop their communication skills so they can network and use telephone marketing more effectively. Others will need to sharpen their writing skills so they can develop eye-catching classified ads and direct mail pieces. And for most, developing these skills will take time. With the industry’s exceptionally lucrative compensation programs and residual monthly payments, however, whatever time it takes to get “up to speed” from a marketing standpoint will pay huge dividends to any broker that perseveres and invests the necessary time to acquire a marketing education.
The ANNEX at Campus IACFB
The ANNEX located at IACFB’s Training Campus is an area devoted to assisting brokers in developing the marketing skills necessary to develop business. The ANNEX includes…
- website templates
- brochure templates
- flyer templates
- mail stuffer and postcard templates
- classified ads
- cover letters
- telephone scripts
- case studies
- workshop powerpoint
- agency setup training
- much more
Access to ANNEX marketing aids and materials is included with any purchase of a factoring broker website and/or hosting package.
Identifying Your Weak Points and Honing Your Skills
Very, very few individuals entering the industry as freelance consultants have the ability to truly market effectively when the first enter the industry and will need to spend time honing their marketing skills as they begin their business and as a handy resource, the IACFB’s Learning Lab can help. The Learning Lab is all about “startup” and important links to books, articles and additional content to assist new brokers in quickly becoming marketing gurus. Learning Lab access is included as a “BONUS” with purchase of the Factoring 101 Broker Training Guide.