Mortgage origination has always had boom and bust selling cycles. When the good times roll, originators do well and are so busy closing loans that it seems there is little room for other sales activities. But when the boom cycle ends, originators can be in peril of losing their jobs and their income. The seesaw nature of mortgage sales is not for the faint of heart. What can originators do to avoid the ups and downs of the boom or bust cycle?
The boom and bust cycle has fostered the belief that selling is about waves and catching them at the right time. I certainly hear that from many executives and producers who often will say “I am just trying to ride the refinance wave out as long as possible, then I will retire.” Then, they always seem to be caught off guard when the downturn happens and they feverishly try to save their income levels.
This scenario is currently playing out in mortgage banking. In recent years, the industry had moved out of a refinance cycle to a purchase money market environment. Now, we have entered another mini-refinance boom with recent declining interest rates. While originators and lenders are currently making money, the new flux of refinance business will delay for many the changes that they need to make to survive when the easy business stops.
How to Stop the Boom or Bust Cycle
Here are three strategies I recommend to lessen the impact of a downward cycle.
• Prospect for new business during good times and bad.
When a boom period occurs, originators often stop prospecting or attracting new customers. Then, when the market does change, they are behind finding customers and referral sources. The best correction for a bust cycle centers on a continual effort by producers to promote their personal brand. In busy times, prospecting still must be done.
Sales professionals with assistants can delegate this marketing function. For those without assistants, personal brand promotion can be outsourced to freelancers or virtual assistants. Fiverr and Upwork are two popular providers that provide easy access to these types of individuals. In my personal experience, the talent pool is very good with highly skilled people.
• Be active on social media platforms daily.
Since the consumer starts the home-buying process online, it is necessary to be active and engaged on social media platforms on a daily basis. Yes, daily. It is critical for originators to be in front of consumers before they reach out to a lender. Today, originators must be top of mind for prospects and referral sources in their territory if they want to capture for new business.
This is another opportunity to use virtual assistants to help manage content distribution to a target audience. The reality facing all marketers is that the number of impressions that are needed to generate brand awareness is the same for salespeople. This is an activity that cannot be allowed to lapse. Producers who fail to maintain a daily social media presence are allowing their personal brands to fade away in the marketplace.
• Share valuable content with former customers.
Engaging with former customers by providing valuable content on a regular basis is a must. These are people that an originator has done business with and know their service levels well. Former customers are a category of potential referral sources that often get ignored by many originators to the detriment of their sales performance. In my view, this category is not worked enough. Keeping in touch with these contacts is a golden opportunity for originators and requires a personalized approach. Sending out a postcard or a generic letter through a CRM system is not as impactful if it is not relevant.
Consumers and referral sources crave personalization. Today, this means providing customized educational videos and content that is valuable and relevant to recipients. During the loan process and the many conversations that originators have with their borrowers gives them an opportunity to glean information that reflects a consumer’s interests and passions.
Information about personal interests is the bedrock to forming a deeper bond with customers. This is something a computer or robot can’t do. The originator has the rare chance to form a relationship that can last a lifetime. Don’t let it slip away just because interest rates have declined. In the end, developing deeper relationships with customers and referral sources are what ends the boom and bust selling cycles.