Whether you have been in this business 15 years of 15 minutes, you have no doubt been told that mortgage loan origination is a business of relationships. Your success is directly linked to your ability to build and sustain strong relationships with real estate agents, builders, borrowers, CPAs, financial planners, attorneys and others. Do a good job at this, and your phone will ring continually with leads, referrals and opportunities every day. Ignore it, and you'll be relegated to cold-call prospecting for the rest of your life.
Some people think that relationship building is easy and it comes naturally. Wrong! If that were true, then these statistics would not be:
* Over 50 percent of marriages end in divorce.
* 70 percent of people who quit a job do so because they cannot get along with their boss.
* The average person has 3.5 "close" friends.
* 45 percent of parents with teenage children say they do not have a "positive" relationship with their son or daughter.
* 15 percent of American adults have at least one sibling they no longer speak to.
Relationships take time and they take work; in life and in the mortgage business. If it is your intention to start new business relationships this summer or grow existing ones, here a few A, B, Cs to doing so:
Approach Your Customers. Mortgage lending offices today are full of unproductive loan originators waiting for customers to come to them, like fisherman sitting in a boat hoping the fish will jump in. Maybe it's laziness or maybe its call reluctance, but you know as well as I do that there is a not a whole lot of "approaching" going on out there right now.
Selling is a proactive sport. You must be willing to get up, get out, and go after the opportunities and the relationships. If you want to meet Realtors, you should join your local real estate association, make phone calls asking for appointments and stop by open houses. If you want to approach builders, you should join the builder's association, make sales calls and visit model homes on weekends. If you are trying to develop relationships with your borrowers, you'll need to attend your closing settlements, phone them once in a while and mail out periodic letters and post cards to stay in touch.
The key to all of this is making the time and effort to approach the people you want for your relationships. A recent survey I conducted revealed that most mortgage originators invest less than five percent of their time approaching new relationships. This is either because: they don't need any new relationships right now or they need new relationships but simply aren't making the time or effort to approach them. Many of these same loan officers in the second group are hungry (if not starving) for business.
We could talk for days about the right ways to approach customers, and if we did, these three pointers would summarize our conversation:
1. You have to know who you want to approach. The old "shotgun selling" approach is old and dead. Start off by identifying exactly who you are targeting for a relationship. If you want to work with real estate agents, select and name those agents in your market with whom you would enjoy working, and do some homework. (The same approach works for any strategic referral partner.) Since you will likely face some disinterest and rejection, make a hit list of more prospects than you need. (For example, if you wanted to begin relationships with two new builders, start out with 10 names.) Plan on the fact that some will not want to meet with you, others will have a preferred lender, and some may not even return your phone call.
2. You have to have a professional approach. Forget the "stop by and see if they are in" sales approach and go for a more professional method. First, send out a letter of introduction with your personal color brochure included. Then, follow up in a few days with a phone call asking for an appointment. This simple two-step approach will differentiate you from perhaps 90 percent of other mortgage originators who won't take the time or effort to do so. Some customers will say yes to your request, some will say no. That's okay. You have your list. Who's next?
3. You have to go for the relationship. Remember that you are approaching people for a relationship, not a loan. If you form and build the relationship with the right customer, the loans will come. So many salespeople try to close too soon and chase opportunities away with their brash style. Smart originators know that relationships are built upon trust, and that trust takes time and must be earned. Be professional and be patient. Relationship selling is a long-term commitment for a long term payoff. Going in, think relationship, not commission.
Build Rapport. Entering into a new relationship, it is natural for both parties to feel a bit skeptical and guarded. Your first goal is to get the customer comfortable with you. The best way to do this is to put the focus on them. People love to talk about the greatest topic in the world: themselves! Let them. In your first visit, avoid the tendency to "show up and throw up" with information about you, your company, your products, your great service, blab, blab, blab. "The customer doesn't care what you know until he knows that you care," is sage advice for any salesperson. The best way to build rapport with a customer and start a new business relationship is to focus on your customers, ask questions, and listen carefully. Such questions might be:
"What should I know about you and your business?"
"How would you describe your customers?"
"Where do you see opportunities to expand your business?"
"What could a mortgage professional like me do to help you?"
Questions like these show a genuine interest in the customer and send the message that you are not there to try and sell something; you are there to learn something and to form a mutually beneficial relationship.
But rapport building goes well beyond what you talk about. In the advent of a new relationship, the customer is trying to size you up; who you are and what you stand for. Little things like showing up for your appointment on time, dressing sharp, taking notes and other non-verbal skills make a powerful statement about who you are and how you conduct your business. Too many loan officers are arriving late for appointments, dressing in "business casual" clothes and doing all the talking. No wonder they are failing. Look at it from the customer's point of view: If you were a top producing real estate agent who had given a new loan originator an appointment today and he/she showed up late, dressed casually, asked no questions, took no notes, and dominated the conversation by telling you how great he/she is, would you want a relationship with this person?
In every good relationship there is a bit of "chemistry" involved. Not everyone will take a liking to you and your style. You may not take a liking to them and their style. This is to be expected. Remember that your objective going in is to build a long-term relationship with another person that may last for years, even decades. Entering into the wrong relationship with the wrong person for the wrong reasons is a dead-end to disaster. (Remember the divorce statistic?) To be a successful loan originator, you only need a handful off good relationships. Be smart. Be selective.
Contact Them Regularly. The best loan officers are great at sustaining relationships over the long haul. They do this by staying in touch with their customers in a variety of ways. These include:
* Monthly sales visits
* Weekly phone calls
* E-mailing notes, quotes and messages
* Personal letters
* Greeting cards
* Lunches
* Attending outings and sporting events together
* Breakfasts and coffees
* And more
This kind of frequency of contact maintains you and your relationship as "top of mind" as well as keeping your customer from saying yes to another lender's advances. You send your customer the message that: "Our relationship is important to me, and you are important to me. Important enough to take the time and effort to write you, call you, and come out and see you." People like attention, and customers are people too.
I conducted one of my seminars recently entitled "Relationship Selling" with a group of highly experienced lenders. At the beginning of the session, I asked the originators: "How many of you would like to have more loans to work on right now?" To no surprise, every hand in the room went up. Then, we launched into the exercise of identifying their key business relationship partners and determining their frequency of contact.
It didn't take the participants long to discover why they weren't writing as many loans as they had been in the past: they weren't making many contacts! Few were making sales calls, almost none were sending out regular mailings, and the last customer who got invited to lunch by anyone in the group, we discovered, was over Christmas! This group had the right relationships with many of the right people, but they were failing in working those relationships. The prevailing attitude was: "My customers know where I am if they need to get in touch with me. I don't have to contact them." This all to assuming way of thinking was costing them business, and I had to show them how to get it back.
Our next step was to identify key customers where we knew the opportunity for more leads and referrals existed and then build a proactive monthly contact plan to get back in touch. This plan would require a time/effort investment of just one hour per month per customer. While many excitedly embraced their plan when completed, a few still held to the stance that they didn't have the time. (Interesting how they have the time to write more loans, but not the time to build the relationships that bring them those loans.)
Once relationships are established, contacts are the keys to sustaining and growing that relationship. Just like spending one-on-one time with your spouse or your kids helps strengthen your bond; time spent with your customers strengthens your relationship. Many highly successful loan originators tell me that they get leads and referrals every day from the customer relationships they have worked hard to build and maintain. They truthfully believe that they get these leads and referrals not because they have the best rates, most products or fastest service, but because they have the best relationship with the customer. The time and effort they invest in those relationships is paying off
all the way to the bank.
There are few things more valuable to you and your career in mortgage lending than great relationships. Isn't there someone you should go see today?
DOUGLAS SMITH is founder and president of Douglas Smith & Associates, a training, speaking and coaching firm, Asheville, N.C., 877/430-2329, Web site:
