The First Question All Originators Must Answer

The beginning of each year always sparks the desire to make improvements in our personal and business lives. From losing weight to increasing personal productivity, there are an unlimited number of resolutions to consider. Deciding where and how to begin can be difficult.

Productivity experts typically suggest outlining goals and listing plans — essentially starting at the endpoint and working backward. However, before moving forward with a plan, I think originators who want to succeed in 2017 would be better served to answer a simple question: “Why should a referral source change from their current lender to you?”

I know many originators will answer that they have the “lowest price and/or the best service.” But the reality is that there can only be one lender with the lowest price in any given marketplace and everyone else is merely competitive. When it comes to providing the best service to a referral source, what does that really mean in today’s world where everyone claims to deliver great service?

The point is that “low price and great service” are not enough to win in the marketplace anymore. Whether they are referral sources, borrowers or brokers, convincing potential customers to change lenders is an enormous challenge for salespeople.

In a great book by Erik Peterson et al, “The Three Value Conversations: How to Create, Elevate, and Capture Customer Value at Every Stage of the Long-Lead Sale,”, the authors observe that even if a customer is interested and may have even reached out to you, that does not necessarily mean that he or she will change vendors. Even if you were fortunate enough to have the lowest price in your marketplace or the best service, that doesn’t always translate into securing new business. So what’s going on here?

According to Peterson, behavioral economics can explain this situation. “In economics, this phenomenon is known as declared preference versus revealed preference. This means people will say one thing when they have no money or reputation on the line, and then do the complete opposite when real money and reputation are at stake.  As a result, when push comes to shove and they have to actually do something, they can’t pull the trigger. Something else always seems to come up that they need to take care of first.”

Peterson points out a critical juncture: “When salespeople say ‘the customer called me and they’re looking to make a change,’ that is still theoretical. Despite what your potential customers are telling you, a salesperson needs to take a step back and make sure that the prospect is convinced they can stick with the status quo and they understand the urgency of the situation.”

This is not easy to do as any originator will tell you. Selling is emotional — a roller coaster of highs and lows — especially when producers believe that their products, services and lenders are the best.

Taking a step back when there are goals and budgets to meet each month is difficult. But as interest rates rise, customers will need help in defining their buying vision. The status quo is powerful and change is risky. When a salesperson says they will deliver something better, frankly, many customers are skeptical.

As we move into this new year, originators must be able to clearly and concisely answer why someone should make a change to conduct business with you. This takes time and reflection but is well worth the effort.