Last week, I attended the MBA’s Secondary Market conference in New York City. My discussions with many of the attendees centered on two themes: why Gen Ys prefer renting to buying and how to increase production. Both topics I think lead to a broader question for managers: Do you have a sales professionals who can sell or simply customer service reps masquerading as a sales force?
In the last five years in mortgage banking, originators never had to truly go out and sell due to a high volume of refinance business. During that period, compliance requirements were less rigorous and companies could make a profit with mediocre performers. Now with higher origination costs, it is clear that there are many more customer service teams in the business than real sales forces. A real sales force is always sourcing new customers for the company. Their role is to attract new customers — not by pricing concessions but by a targeted value proposition. If the only way an originator can sell to new customers is through discount pricing, the sales person is not really selling.
In Mark Hunter’s High Profit Selling: Win the Sale without Compromising on Price, he makes a great point: “the failure of salespeople to spend a proper amount of time prospecting and maintaining a strong list of sales prospects is typically the reason they struggle with holding firm on pricing. When salespeople believe the customer they are working on is the only one, it creates intense pressure on pricing.” The predictable end result is the company not being able to make a profit. (The MBA’s recently released 2013 Profitability Report lays out the dismal stats for our industry.)
Prospecting is not an occasional effort but a consistent part of what top achievers do daily. Too many originators spend time preparing to prospect than actually prospecting for new customers. Prospecting is speaking to new contacts. As Hunter observes, “if you can’t prospect, then you can’t sell. Selling is synonymous with prospecting.”
Nearly halfway through 2014, it is time to ask the hard questions. Do your originators really prospect or do they function as customer service reps?