Not a day passes when I don’t hear from a manager about how difficult mortgage origination has become. Whether it is battling to recruit top producers or pricing wars regarding interest rates and closing fees, there is no question that competition is fierce. As one sales executive said to me recently, “it is hand-to-hand combat time” if you want to survive. In this challenging environment, what should lenders and originators do to win?
In my view, the answer requires a mindset change that goes beyond installing the latest technology and hoping it will improve sales results. Instead, lenders and originators need to take a hard look at what they are doing to bring value to their customers every day. Yes. Every day. While this might seem impossible to deliver, this is what customers want if you are going to do business with them. Anything less than daily engagement with customers leaves a seller competing against lower-cost providers which is difficult to win if you have higher costs. For lenders who want to succeed in the current marketplace, the solution is to develop a plan to compete based on your value proposition and engagement strategy.
As one manager observed, “in the past, you might talk to referral sources and customers once in a while. Today, you need to speak to them daily and resolve any issues that arise promptly.” According to this manager, “when there is a problem, if you are not available or can’t answer a question, the customer will go somewhere else.” Wow. Talk about no loyalty! Originators and lenders are definitely on a short rope where mistakes or lapses are not tolerated anymore.
Meeting and exceeding expectations on a daily basis can be a tall order for many originators. For referral sources, producers must ask themselves how they can improve their contact’s business. For customers, producers must determine how to service the client’s current and future loan needs. Originators who believe that their responsibility to the customer is over once the loan is closed are in for a rude awakening.
Unfortunately, too often originators believe that knowing their products and how to get a loan closed within their lender is their only responsibility. In my opinion, this is just the foundation for an engagement that requires the customer to be wowed enough to refer their friends and family. Knowing your products and lender’s loan process is really a low bar of value engagement.
Similar to what is happening in other retail businesses, more is being demanded from mortgage originators if you want to be a valued partner with consumers and referral sources. The reality is that every part of the sales process from the initial contact to closing and beyond needs to be reevaluated to match the customer’s buying journey. The key issue is how to optimize customer engagement with every contact point.
All too often, consumers raise their hands and they are ignored. Yes, ignored. Recent research shows that half the assigned leads in mortgage banking are never even called by an originator. If you are not responding within minutes, the customer will move on to someone else. The options are unlimited today in mortgage banking for lending sources. When customers are knocking on your door, failure to respond is a sure way to go out of business.
When conducting sales audits for lenders, I also see originators not asking potential customers enough “discovery” questions. Research shows that originators should be asking 11 to 14 good discovery questions during prospecting efforts. Sales professionals who ask the best questions and listen to the answers have a much better chance of earning the business than their counterparts who do not put in the time or effort to develop the relationship. Meaningful engagement starts with a producer really listening to prospective referral sources and customers.