Do You Have the Right Sales Structure for Your Sales Talent?

It is no secret that top producers have long dominated loan production at mortgage companies. In previous blogs, I have discussed the fact that a minority of producers originate a majority of total volume at most mortgage firms. In the past, the top 20% of the sales force produced approximately 80% of the total volume at a company but this percentage is changing with even fewer producers responsible for the bulk of production today. Clearly, the importance of having top producers is evident but what about the rest of the sales force? What is their impact on production? You might be surprised at what direct managers are saying about average or sub-par originators.

During my training sessions, when I ask managers to rate their sales originators (A, B, C or D), participants identify at least 50% of their producers as inconsistent performers, negative influences or poor performers that don’t even merit a C or D rating. Wow! This is an eye-opening trend that can have significant ramifications.

I have often written about the impact of poor hiring decision but I find that most managers still spend an inordinate amount of their time trying to address individuals who are at best, long shots for improvement. Even with a commission-based sales force, mortgage companies pay in terms of the actual dollar amount value of a manager’s time.

The truth is that the mortgage lending mantra, “If we can just get one more loan from this group of underperformers”  has never worked. The fantasy of getting more production from poor performers prevents companies from facing the harsh reality that not everyone is a match for mortgage origination.

Unfortunately, many mortgage firms are holding on to C or D sales professionals who are frankly, never going to improve. If below-average originators make up 50 to 60 percent of the sales force, senior managers need to ask themselves some tough questions about whether they have the right sales structure in place. Specifically:

  1. If it takes hunters and near hunters to win in mortgage origination and your company has farmers, a typical distributed retail structure may not be a match for your sales efforts. The company either needs to recruit hunters and pay accordingly or grow the hunters themselves. Either way, a large investment is necessary if your company wants to increase market share.


  1. This option would be to abandon the hunter strategy and recognize that farmers are what your mortgage company is comfortable with. A sales organization that is aligned to support farmers such as a call center organization might be the better choice. A call center sales structure can control originators more efficiently. However, this structure requires a large commitment to advertising and marketing support. The good news is a centralized structure has many benefits including the opportunity to recruit rookies and control costs. Also, investment on generating leads can be monitored more efficiently than with a field structure.


  1. A final option would be a hybrid combination with only A and B players in the field supported by farmers in a call center. This approach means recognizing that average originators and inconsistent performers will not hold on to their positions in the field and cannot be supported financially any longer. As a result, distributed retail would be much smaller with only the top-performing originators maintaining their jobs.

Mortgage companies with more farmers than hunters will need to make some tough decisions if they are to succeed in today’s purchase money environment.

Is your sales structure a match for your company’s sales talent?