Will Technology Replace Originators?

I just returned from the annual MBA conference in Boston where the Number 1 topic was technology and how companies need to implement it quickly or be left behind. One session conducted by Clara Shih even addressed the importance of originators using social media so they are viewed as a trusted advisor in financial sales. While lenders definitely recognize that the game is changing in origination, the big question is whether great technology and a poor to average sales staff will be enough to succeed. Or will moving forward require that both the technological and human elements be above-average for success? I think the latter is the right answer.

Obviously, technology is changing rapidly. Just look at the rise of Snapchat, a key communication tool for teenagers and young adults that was founded only five years ago. Consider that computers, once used to simply add and subtract, can now encompass artificial intelligence where the computer can be programmed for thinking activities such as processing and underwriting.

Some business experts even envision a world where salespeople are completely obsolete. Today, customers can access and conduct research on products 24/7, prompting managers and lenders to believe that a technological solution will eliminate their largest cost.   These managers are forgetting that selling is always about forming a relationship and not just about product pricing or ease of use. This is especially true with a product as complex as housing finance.

Further, even with a relationship-based transaction, salespeople must be better, faster and more knowledgeable when helping the customer make the right decision. This means originators must be able to form a relationship quickly; connect deeply and frequently; and collaborate with borrowers. Salespeople who lack these skills will not succeed in the new world of mortgage origination.

One important thing to remember is that while customers are demanding a better quality sales experience, they still want to transact with a human being. According to NAR’s latest data, 87% of buyers purchased their home through a real estate agent or broker, a share that has increased since 2001. Even with the vast amount of information on the internet and the rise of social media, human beings still want help from other human beings.

What is changing is that real estate agents’ median income has declined while the better agents make a much higher income. This is true for the mortgage industry as well where the top 10% of originators generate almost 60% of the total volume of a sales organization and make the six-figure incomes. The reality is the best performers in all industries are in demand and they are rewarded for their advanced skill sets.

One of the reasons that the best performers outdistance their competitors is because they adopt and use technology to help them connect with their customers. Time and time again when I am conducting sales audits, the top performers are the ones using technology to stay in contact with their customers and referral sources. They are using Facebook, Snapchat and other tools that free them up to spend time building relationships. These best-in-class sales professionals don’t fight technology, they embrace it and want their lender to acquire it. Mediocre sales professionals fight it and don’t use what is provided to them. Unfortunately, management teams too often listen to the naysayers and don’t make the technology investments that they should.

The new technology doesn’t replace the power of relationships; it is only a way to enable originators to reach out to more people and forge deeper relationships with referral sources and customers.

Cool technology will never be enough to offset the impact of an originator who has poor relationship skills. No software will be able to replace what a great originator can do for his or her customers.

Are you making the investments in your sales force today to increase the number of great originators in your organization? The time is now.