During Volatile Markets, Referral Relationships Matter More than Ever

In my recent conversations with senior executives, many sales leaders are panicked about their drop in sales volume and how tough the remainder of the year looks for their organizations. While the refinance boom’s record profits are quickly fading in the rearview mirror, the traditional purchase money market looms large on the road to success and is undoubtedly the biggest obstacle mortgage managers and their teams must navigate in 2022.

As I’ve mentioned in previous posts, building mutually beneficial relationships with referral sources is essential for originators if they want to reach volume goals in a purchase money environment.

Many managers are fielding calls from producers about how to quickly open conversations with referral sources as if there were some magic spell to enable them to instantly connect with people they don’t know. Unfortunately, building referral relationships and convincing someone to partner with you takes time and effort. There is simply no way to fast-track this process.

Connecting in a Digital World

In my view, the digital landscape has made it harder than ever for originators to open conversations with prospects and referral sources.

While the internet and social media platforms have made it faster and easier to communicate,  technology has also made it more difficult to develop trusting relationships in the sales arena.

Just because you can reach anyone in the world via social media doesn’t mean that a real relationship has been formed. Relationships are still developed offline and not online.

Now there’s no question that in our digital world, sales professionals have incredible reach. Here’s a recent example:

Many of you know I’m an avid reader of sales books. I’ve read hundreds over the years, rooting out the best tips to incorporate in my training programs. When I am impressed with a book, I often contact the author to let them know what I liked about their book. I just finished an excellent sales book, “Combo Prospecting” by Tony J. Hughes. Although Hughes resides in Sydney, Australia, I connected with him on LinkedIn and asked him to be on my podcast to discuss his book. We are now scheduling an interview. Hughes is halfway around the world and yet it was easy to contact him even though I have never met him in person.

This is our new sales reality. Digital tools make reaching out effortless, but we are kidding ourselves if we think that connecting through technology is enough to forge a great business relationship.

Having the most connections is not the goal in selling but cultivating deeper trust-based relationships is.

While technology has made it easier to connect, it has also made establishing trust and building referral relationships more difficult. Do-not-call telephone lists and software applications can block unwanted sales solicitations. Add the fact that it’s human nature to distrust people we don’t know and it’s easy to understand why prospecting has become so challenging.

In my sales training classes, students seem to think that sending an email or a company newsletter is all that is needed for a Realtor to give them referrals. These same originators mistakenly believe that the lender’s brand and reputation are all they need to win referral business.

As I teach in my training programs, emails do nothing to establish trust for the simple reason that even opening an email from someone you don’t know can result in your computer being infected with a virus. Plus, even if an email is personalized, it still falls short when it comes to conveying the reliability and trustworthiness referral sources want in a partner.

So, amid all of these challenges, what is the answer?

In my opinion, originators must physically go out to the field and start to form personal relationships with targeted real estate agents. It takes more than one meeting and an investment of time by both the Realtor and originator. Today’s online channels can increase awareness but visiting someone in person is still how you build trust with another individual.