The Four Pillars of Mortgage Sales Success

Last week, a National Mortgage News article discussed the results of Fannie Mae’s Q1 2018 Mortgage Lender Sentiment Survey which measures lender’s profit-margin outlook. According to NMN, mortgage lenders had the highest level of pessimism recorded since 2014.

This is not surprising given the current challenges our industry faces: the decline of the refinance market, rising interest rates, fierce competition, margin compression, the high cost of origination and too many underperforming originators. In last week’s post, I explained why providing more training is not a good investment if underperformers are not a match for mortgage origination. Some experts suggest that a technological solution is the answer while others feel that it is time for looser underwriting guidelines and less regulation. In my opinion, the industry needs a comprehensive solution, not piecemeal ideas to successfully address the obstacles ahead. For companies and originators, my winning strategy includes the following components:

  1. Establish a brand
  2. Focus on being the easiest to deal with
  3. Become a trusted advisor
  4. Achieve economies of scale

Let’s take a closer look at each one:

  1. Establishing a brand. This is a mandatory element of a winning game plan. Prospects want to know what you are known for and what you do best. Many companies and originators falsely assume that consumers automatically know their brand’s positioning. They also select meaningless marketing slogans such as they are an integrity lender or originator; are great listeners; or have been in business for a long time. When the slogan doesn’t play out in reality, credibility goes out the window. A brand is a commitment to excellence that a company or originator delivers every day of the year, not once in awhile.
  2. Being easiest to deal with. Being easy to deal with does not mean a technological solution. Technology is a means to an end to help a company or originator deliver an outstanding experience to the customer. Too often, even when companies have great technology, it isn’t being used or worse, used poorly. From Day One Certainty to CRM products, the underutilization of these products is incredible. Even so, more frightening is the lack of structure by management teams to ensure that the customer receives prompt attention. In a recent presentation by InSellerate, the company surveyed 1,000 lenders on when they contacted a consumer who had visited their website—over 50% never reached out to the customer at all! When business is difficult, ignoring your customers reflects poorly on managers and their employees. No wonder companies and originators are struggling now.
  3. Become a trusted advisor. The main purpose of any originator is to source new business for the lender and to wow the customer so they refer their friends and family. An extraordinary customer experience is driven by having the right person in the position to develop expertise and relationships. Sales professionals who do this well are highly rewarded. Unfortunately, there are way too many producers who fail at these job requirements. It is outrageous to me that the solution has been to hire more underperformers and hope that a company’s technology will make them more productive. This is simply not going to happen. Poor performers do not have what it takes to position themselves as a trusted advisor.
  4. Achieve economies of scale. Scale is about optimizing one’s resources to drive the greatest results. When 60% of a sales organization’s originators are unprofitable due to low production, there is no way that the company can have a sustainable and profitable sales performance. Scale is about having the right alignment of personnel and resources and costs. Paying outrageous guarantees to underperformers is a path to going bankrupt. To achieve economies of scale, everything needs to be evaluated from the talent acquisition process to how the sales process is handled. The macro strategy also must include a projection of what the future consumer wants and needs. Every company that wins in a difficult market environment shows an ability to look beyond the day-to-day grind to anticipate future demands. Shouldn’t mortgage lending be willing to make the same commitment?