After working with sales organizations for the past 20+ years, I am always amazed how accurate the Pareto principle (80/20) is when analyzing loan officer production. In every sales group, there is always a smaller number of originators (the vital few) who are successful regardless of market conditions, volatile pricing and the highly regulated lending environment. The remaining originators can’t seem to adjust to the ever-changing mortgage banking landscape and as a result, they aren’t profitable. Originators in this category are always complaining about pricing, products and the back office. Lack of production is never their fault.
It is a wonder how unprofitable originators keep their jobs when conditions are as difficult as they are now in mortgage origination. As every sales manager knows, this is not a random situation at a handful of companies, but an industry-wide problem. Certainly, identifying individuals who can make the adjustment to new, more challenging environments should happen during the interview process, but the reality is that mortgage banking’s hiring practices are outdated too. Companies still rely on an originator’s pipeline report and/or their W-2 at a previous lender. These evaluation criteria are not enough to predict success at another lender.
When analyzing the top 20% of originators, it is clear that these individuals possess innate personality traits that translate into behaviors that make them successful sales. I have discussed the personality traits of above average originators in previous posts. In my consulting practice, the best originators are obsessed with improving their sales model which starts with an objective evaluation of their own strengths and weaknesses. This may sound simple but it isn’t. Other key differences between top producers and the rest of the pack include the following:
- For the best producers, prospecting or marketing is a daily activity. They use social media more than other originators because they understand being top of mind is critical today in a highly competitive marketplace. I am often amazed how unprofitable originators don’t even have a LinkedIn profile—a basic requirement for a professional originator.
- Top producers are self-starters who have plans for prospecting, marketing, sales and referral sources. They do not wing their sales process. It is well thought out to match their current marketplace and resources. They recognize that an organized approach is required if they are to scale their production. Unprofitable originators like to let the day happen to them instead of organizing their daily activities. The bottom line is that unprofitable originators don’t have a selling model.
- Top producers are committed to improving their sales skills. It is not surprising that they look for training and coaching because they recognize what worked before does not always work in a different marketplace. Unprofitable originators wait for the company to provide training and even if the company does, it is no guarantee that the salesperson will do the hard work of changing their selling techniques. They are always looking for a magic bullet to change their sales results when what is needed is a combination of selling activities that need to be adjusted.
I can go on but what it really boils down to is that top originators are obsessed with improving their sales model and providing the highest level of service to their customers and referral sources. Being obsessed is all about continuously tweaking their selling activities and doing new activities. They know that if they are not obsessed with being better, that they will become average or mediocre. Mediocrity is what eventually can become a fatal mistake and make an originator — and a company — irrelevant in today’s marketplace.