A little while ago, McDonald’s saw their profits dropping. It came as the result of increased competition in the fast food market coupled with consumers’ tendencies toward healthier meal choices. What did they do?
McDonald’s continued to offer their core products of burgers and fries (I think they have the best fries) to serve their base customer.
But, they decided to add other offerings as well:
- Breakfast Meals
- More healthy choices
- Specially priced drink offerings
- A line of boutique Starbucks type coffees through its new McCafe
- All at McDonalds’ discount pricing.
It worked! In the second quarter of 2017, they reported second-quarter profits and sales that were stronger than analysts had forecast, sending its shares to a record intraday high. McDonald’s had reinvented itself for the better.
Not hard to see that mortgage lenders can take a page out of this book. With competition fierce, home sales down, and mortgage rates rising, lenders need to find ways to generate more business from less.
Lenders need to supplement their core financing products offered during the refinance boom times, with other products, services, and systems to provide the consumer with more choices, better service, and ease of communication.
You need to become a one-stop-shop for all their mortgage lending needs; education, prequalification, online applications through eClosings, all done conveniently and with the personal touch.
MBA is forecasting an increase in purchase originations in 2018 but a decrease in refi’s. Overall, the forecast for 2018 is about $1.6 trillion, down from the $1.7 trillion expected for 2017.
Currently, they see a slight rise in 2019 to about $1.64 trillion. That’s still quite a few loans to be originated but not quite as many as in the past.
- What are you doing to compete in a shrinking market?
- Aside from cutting staff and expenses, if you can, what new products and services might you offer to attract more potential customers and close more loans?
- What are your plans to reduce fixed expenses while increasing staff productivity?
- How might you reinvent your business?
In this case, if you keep doing what you’ve been doing, you just might get less than what you got. On the other hand, if you’re satisfied with the way things are, then keep on truckin’. It’s your call.
McDonald’s saw a need for a change and made a change for the better. How about you?