Last week, shock waves rippled through mortgage banking after 50 basis points were unexpectedly added to refinance loan fees. This action took a lot of lenders by surprise and sent many originators into panic mode. This is yet another example that the business world is filled with events that can seemingly come out of nowhere. While no one can predict the future, the best strategy for long-term success in our industry is to be prepared for the unexpected.
In our global economy, events that happen a continent away can upend Main Street Lending USA. For lenders and their originators, navigating these disruptions requires them to quickly adjust their selling practices.
While all businesses are challenged to adjust to marketplace changes, many companies postpone necessary action until something catastrophic occurs. Granted, revamping your sales strategy is not easy. More often than not, it takes a painful reality — a reduced pipeline or loss of a certain income level — to prompt originators to make a change.
In a great Washington Post article, “These Car Salesmen Shifted Tactics — and Succeeded,” author Todd C. Frankel told the story of how one salesperson with 16 years experience adopted new selling techniques as a result of the COVID-19 pandemic. As Frankel noted, “car selling is perhaps the ultimate handshake deal — now they were operating in a socially distanced world.” Frankel revealed that the old-school salesperson had his best month in May by working deals over Zoom and text messages. The salesperson even used FaceTime with customers on test drives. In other words, he used new communication tools that could help him connect with the customer. While it was different than what he had been doing before, he realized he had to change if he wanted stay in business. No one forced him to make the changes and he did it on his own.
In the article, the old-school salesperson observed that those who failed to shift from in-person meetings to online sales tactics were struggling: “Covid-19 is going to retire a lot of people in this industry — and in a lot of industries.” This is a great lesson that originators should take seriously. While the mortgage industry has received a gift of historically record low interest rates, at some point, that will change and we will be faced with addressing a more difficult purchase money environment.
Embracing New Sales Techniques
The reality is that the old selling strategies are being replaced by more innovative sales techniques. In my view, sales professionals who find new ways to connect with prospects and referral sources will come out ahead of the competition.
Developing a relationship in the virtual world is different and harder to do than face-to-face selling. Attention spans are shorter than ever. Home buyers and referral sources have 24/7 access to information, whether it is accurate or not. Thus, originators must possess a higher level of selling skills to convince a referral source to make a change; or to earn a prospect’s business.
Are you and your sales team willing to adopt the new selling practices needed to succeed in a tougher business environment?