We see it everywhere. Title companies’ only strategy is to lower their closing fees, their search fees, to basically put a lower price tag on their services. Not only do we think that approach doesn’t really help much, but in the long run, it will destroy a title company. Potentially, it will even destroy the market for title in that county or city.
Reason 1: Because the only thing ‘cheap’ is going to be YOU
Think Mercedes Benz. High priced, premium, leather… the perks. Then think Mitsubishi. Which one would 9 out of 10 people LOVE to have? The answer is pretty easy to guess. Now, some might say the high price tag on a brand-new Mercedes comes from the quality of the vehicle, but they would be only 50% right.
You see, price itself is saying a lot about the product. High prices spell ‘premium’ or ‘high-class’; low prices spell … well ‘cheap’. Price is a self-fulfilling prophecy.
Now, your overall marketing strategy would need to decide upon your approach. Are you a ‘cheap’, ‘fast’ company that just gets the basics done (there is a market for that too)? OR are you a ‘best service’ company that goes to great lengths to satisfy your customers’ needs?
You need to be congruent. You won’t fool anyone saying, ‘We have the best service’ and then showing a $0 closing fee. While you may think this will get your clients saying, ‘Wow… Awesome! I’ll go for it’, it won’t.
It will actually have them thinking, ‘OK… There’s something fishy here! Either they have hidden costs, or this is a scam, or they’re a one-man-show, or… or… or.’
So, bottom line, if you claim to have the best service, avoid looking cheap.
Reason 2: Because overhead will kill you in the long run
There are two trends that will always be like this, that will definitively kill your title company in the long run.
Overhead will keep going up (as indicated by inflation). The costs of doing business will keep increasing too. Rent, salaries, software, hardware, gas, phone bills, etc. You can’t really control this trend.
What you can control is your revenue. If you slash prices and give out discounts, guess what? More clients will want MORE discounts. Before you know it, you’re trapped. And this continuing trend will at some point reach a dead stop, right along with your title company.
Reason 3: Because it’s better to ADD value, than to take away
Instead of cutting prices, think adding value to your clients. It can be something relatively inexpensive that they would appreciate.
One example would be to offer a title quote app that they can use for free every time they need to send their buyers or sellers an estimate of the fees needing to be paid on a transaction. Now, there are tons of other value-added products or services you may offer. It all depends on your understanding of your clients and what they find useful.