How Factoring Brokers Develop Business
Since the business of being a freelance consultant in the factoring industry is all about business development, you should probably know a little about how successful brokers find those business owners in need of factoring.
There are two primary methods used by independent brokers to generate leads and source new clients. These are direct marketing and networking and fortunately, both work well. Recent polls taken in the industry by the International Factoring Association (IFA) confirm that roughly 50% of all new clients are sourced through direct marketing and roughly 50% are sourced through networking and relationship building. Typical methods include…
DIRECT MARKETING: This will include…
- Direct mail using invitations, postcards, mail stuffers, flyers, brochures, etc. with follow up phone calls
- Holding Workshops and Seminars
- Guest Speaking (or employing a guest speaker)
- Classified Ad Placement with Website Offers (free booklets, reports, etc.)
- Cold Calling and Telephone Marketing
- Targeted Email Marketing
NETWORKING AND RELATIONSHIP BUILDING: This will include…
- Attending meetings and events at your local Chamber of Commerce
- Attending SCORE, SBDC, and business incubator functions
- Being active on Social Media: LinkedIn, Facebook, Twitter, etc.
- Joining and being active in Fraternal Organizations: Kiwanis, Elks, Lions, rotary, etc.
- Other clubs and organizations of personal interest: Hobby, Political, etc.
The important thing to understand about marketing and business development for factoring brokers is that the opportunities to generate good leads are practically everywhere and endless. Some will require investment. For example a typical annual membership at your local Chamber of Commerce will often be $300 or more. On the other side of the coin, utilizing social media such as LinkedIn and Facebook to build important relationships and develop referral business costs absolutely nothing.
Networking and relationship building will, however, take more time than direct marketing. In fact many industry brokers, and especially part-timers and those on a budget, strictly utilize their website, email marketing, and networking to generate leads and source clients. It takes a little longer to book business this way and you will need to be patient, but networking with bankers, accounting professionals, and others in person and online (LinkedIn and Facebook) is a surefire, lead-generating strategy employed by almost all consultants and brokers.
Professional Websites & Hosting Options Through IACFB
As anyone in business today knows, you absolutely have to have a professional-looking website if you want prospects to take you serious and the business of brokering factoring transactions is no different. IACFB supports two options when it comes to broker websites.
- WORD PRESS WEBSITE HOSTING: For the “do-it-yourselfers”, IACFB supports WordPress with the most affordable installation and hosting found on the internet. Standard WordPress hosting for IACFB Members is just $5.99 per month when purchased annually.
- FACTORING 101 PROGRAM WEBSITES $119.95: The Factoring 101 Program at IACFB includes your choice of professionally designed website from our suite of over 20 templates for just $119.95. All sites include a video salesperson as well as support for building your sub-broker agency if desired. Optional add-ons for the website include:
- Business-in-a-Box ANNEX Access: Featuring all types of marketing material templates such as flyers and postcards for direct mail, brochures, telephone scripts, case studies, elevator pitches, and much more. ($79.95 annual)
- Business Email Pak: Two domain related email boxes to help give your factoring consultant business a “professional look” ($23.95 annual)
- Factoring 101 Training Guide: For those that have not already purchased our 5-star rated comprehensive training guide from Amazon.com ($39.95)
- Lenders Directories: Most new IACFB brokers will clear their business through the convenience of IACFB Wholesale Operations but for some “standalone brokers”, the American Directory of Factors and Lenders, published by IACFB is the answer with direct links to over 500 broker-friendly factors and lender. ($79.95 annual)
Organizing Your Factoring Business: The Need for a CRM
When consulting in factoring and commercial finance products, you will be dealing with numbers…LARGE NUMBERS. And by this we mean numbers of prospects and referral sources. It is not unusual, for example, for a broker that has been in the business 3 years or longer to have over 5,000 contacts including business owners that are financing prospects and sources of referral such as bankers, accounting professionals, SBDC / SCORE members and others. You simply cannot effectively manage such large numbers of leads without a CRM (Contact Relationship Manager) and one of your early tasks will be to explore CRM options and make your choice. This is an essential tool and you will absolutely need it if you are serious about the business.
At IACFB, we have tested dozens of CRMs and highly recommend Pipedrive. In fact, we completely support the Pipedrive system with additional setup instruction in our ANNEX marketing support area. Pipedrive is a very low cost ($15 per month) CRM that is tailor made for consultants such as factoring brokers. You can get a FREE 30 day trial of Pipedrive through IACFB.
Utilizing Email and Drip Marketing When it comes to building relationships with prospects and referral sources, drip marketing is the “BIG KAHUNA” and you need to invest some time in learning more about it.
As a consultant in factoring and alternative commercial finance, you are NEVER a salesman. Factoring and finance products cannot be sold. A business either needs financing or it doesn’t. The owner either has access to bank financing or does not. Those businesses that require financing but cannot get it readily from the banks are your prospective clients. And there are tens of millions of such businesses for you to prospect. They need to know what you do and where they can locate you when the need arises. Keeping your name and business information in front of them on a consistent basis is the job of “drip marketing”.
Dripping is simply a marketing task that requires an email or piece of direct mail to go out to prospects about once every 2 months. Ideally, you will also want to personally speak with (by telephone or in person) prospects and referral sources at least once each year.
Dripping is “stealth” marketing. It’s purpose is very simple. Factoring and alternative commercial finance is typically a “long cycle” sale. You want to build lists of prospects, let them know who you are and what you do, and when the need suddenly arises for such finance, you want to make certain the prospect knows how to get in touch and calls you for your services.
The task of dripping can be handled by any email program but we highly recommend MailChimp due to its exceptionally low monthly subscription cost and its user-friendly dashboard for configurations. Mail Chimp is a FREE resource for new brokers having fewer than 2,000 subscribers and most important, MailChimp integrates seamlessly with the Pipedrive CRM for Drip Marketing.
If you are looking to enter the business of brokering factoring transactions on truly “professional” basis, the combination of Pipedrive and MailChimp is unbeatable and at monthly subscription prices anyone can afford.