Popping the Old Sales Myths
Lenders must let go of the past and embrace new metrics to thrive in 2015
Entering 2015, the mortgage industry faces some major challenges. One of these is letting go of historic methods of thinking and realizing that the world has dramatically changed from the champagne days that preceded the 2008 disaster. The industry fought through tough times to rise from the ashes in 2010 and 2011, and it enjoyed good times during the refinance boom in 2012 and 2013, but now mortgage professionals face a more purchase-oriented market that has leveled off and settled into a new norm heading into 2015.
With that new norm in full effect, which business-as-usual myths must your company defeat if it hopes to rise above the rest? Three in particular stand out.
Looking at 2015 and beyond, it’s clear that some constant components must be addressed and dealt with to have a profitable business. To begin with, more lenders are now competing for fewer available dollars, and in that environment, skill wins. To achieve the level of skill required to win more than you lose, lenders must first pop the bubbles on three common myths regarding sales:
1. Price is the best sales tool.
2. Rate is the most important client issue.
3. All salespeople can be trained to succeed.
Let’s take a closer look at each.
The industry has lived with this myth for so long, and many mortgage professionals still buy into it. It’s become apparent from both the retail and the wholesale lending sides of the industry that “price sells” is a total fiction, however.
More than price, clients want sales professionals who understand their business and its challenges, and who can help them overcome those issues to get loans. Be an asset, not a loan officer or an account executive.
Clients also are looking for someone who manages the total relationship. Your ability to navigate through the administrative parts of a transaction fluidly and make it a positive experience instead of an administrative nightmare will generate repeat business.
With compliance and conditions constantly changing, the ease of doing business in a seamless manner and the ability to troubleshoot problems before they start are worth much more than price to a Realtor, borrower or broker. A good price can be great, but not if the process is painful or the loan doesn’t close.
The ability to proactively communicate throughout the loan process will turn you into the expert and make clients feel you are in control of the outcome. Don’t make the all-too common mistake of forcing customers to track you down to find out what is going on.
One common comment that all respected loan officers and account executives receive is that they reach out regularly to their customers so there are no surprises while guiding them through the key steps. This alleviates anxiety. Communication is the lifeblood of personal and business relationships — it is far more valuable than price in today’s challenging lending world.
Rate is important
Borrowers create initial impressions on the first phone contact with a loan officer, and it is crucial to establish that you are a true financial consultant, not just someone looking to sell a loan. As a consultant, you should avoid giving pricing-related responses and instead focus on questioning your clients to truly understand their situations.
As soon as you recommend a product, it inevitably leads to a possible rate-range discussion for clients to consider. This error leads to customers shopping around or saying that your rate is different and they like it — or not. Remember this simple phrase: “The customer called to be sold to, not told to.”
Rate is a variable component, not a finite number. To even discuss possible rates early in a conversation leads to the potential end of the call. It should be the last part of the conversation once you have established a potential valid product for the client to consider. Even then, never give a rate; instead, give a rate range so that you have flexibility. So many calls have been lost on this one element that it’s amazing how easily lenders fall into the trap and become their own worst enemy.
The key is the total analysis that you perform through questioning potential clients before getting down to pricing issues such as rates and costs. Only after learning their issues, concerns, timing, credit and other critical factors does price become relevant.
If rate comes out early, you give the client all the power and leverage to say “thanks” and call other lenders to compare. If you save it for the final component, then rate can be the beginning of a relationship.
Everyone is trainable
To develop critical skills in your staff for a successful 2015, you can’t just offer online training or bring someone in to work with your team once or twice. Training is an ongoing coaching process you commit to that leads to long-term results.
A good manager leads by example. You have to get out in the field and go on sales calls, or get out on the floor of a call center and listen in on calls. People respect managers who have a hands-on, reality-based approach to their coaching versus those who are theory-based and stay in the office at their desks. The worst thing a manager can do is criticize from afar without being able to point out real-world factors that can improve the selling skills of their staff.
If your company’s management team commits to coaching, improvement and cultural change will follow. Learned behavior is the key. It often takes between 90 days and 180 days of focused management commitment to get everyone moving in the same direction in a sales-oriented organization.
The key to coaching is consistency. It is not a short-term fix but a long-term plan. If your staff sees that you will work with them in 2015 — that you will coach and counsel them on how to thrive versus just survive in a tough market — you will minimize turnover and increase your profitability. Lead by example and good things will happen for your company.
The mortgage industry is at a crossroads. With increased competition, fewer viable products and lower margins because of increasing compliance costs, sales skill will become the most important commodity in your company. Lenders that cling to the old myths and continue doing business as usual will get left behind, while those that cut ties with the past and embrace new metrics of selling will thrive in the future. As with nearly every successful enterprise, education and training are the keys.