Forget the Top, Focus on the Bottom!

Coaching people to reach peak performance is all about the numbers. If the numbers don’t improve, the client doesn’t improve. If people aren’t improving, then why would they coach? The issue always becomes, what is that client looking to accomplish? Do they want to do more transactions? Do they want to make more money? Do they want to have more efficient systems so they can work fewer hours and take more time off? Is it a combination of all of these? Knowing the answers to these questions can point you in the direction you need to go. That is why it is always one of the first discussions I have with a prospective client, so I can understand what they want from the coaching experience.

Most of the time, the answer I get is that they want to do more business. They are looking to increase the number of transactions they do every month. Originators, like most other commissioned people, tend to look at the numbers in terms of most units closed in any given month and year. And while I agree that our industry does focus on monthly and annual production numbers, I think I can help my clients more by helping them adjust their focus in a slightly different direction. I want my clients to focus on the bottom portion of their production, not the top!

Here is what I mean by this. Far too many originators try to set personal best closing months. And while this may be one way to improve your overall numbers, there is no guarantee that setting a personal best month will make for a better year in total. Think about that. If you are an originator and have a personal best month of say 5 closed loans. You could work on having a month where you close 6 or more. And while that would be good, it doesn’t remotely mean you are going to have a better year!

So as I am prone to do, I flip this thought process around and have my originators look at the bottom of their production curve. That same originator who had a top closing month of 5 units also had a bottom closing month of zero! In most cases, average originators have one or more poor production months. In fact, you will find that somewhere between 10 and 15% of all originators in any given month has a zero closed loan total. Now it doesn’t have to be zero in order for this to be a problem. Whatever your low loan monthly total is, you would benefit from focusing on raising the bottom!

Try this exercise I like to do. Take a piece of paper and in the margin write the numbers 1-18 from top to bottom. Then look at your month unit production numbers over the last 18 months and from best to worst, list the number of units closed.

Once you get this done, add up the total of all the numbers and divide by 18 to find your average monthly units. Now go down to line #12 and draw a line between line 12 and line 13. Looking below at numbers 13-18 there are likely four, five, or even six numbers lower than line number 12.

Now, on the same sheet of paper, draw a second column of numbers using the same numbers from #1 to #12, but substitute the number in line 12 for all the numbers you have listed 13-18. Once you have done this, add all the numbers up and divide by 18. You will notice that both your total units and your monthly average have both gone up!

Many times we focus too much on peak performance without looking to improve on our poor performances. Sometimes it is impossible for an originator to see a clear way to beat their personal best, but it isn’t hard at all to know what needs to be done to limit the low numbers. Just like a business doesn’t always show a bigger profit when it increases total sales, originators don’t always get better by having a single good or great month. While I am still a big fan of personal best months; I am a bigger fan of being really boring by raising the lower levels of production first!

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Regardless if you are an originator or a manager, you must always have a place and a plan for recruiting. For originators it is recruiting new referral partners; for managers it is recruiting new originators. Depending on each set of needs, the process would appear different, but is really pretty much the same. It’s all about setting the targets and then scheduling the activities needed to execute the plan.

Recruiting for me has always been less about “selling” the company or the brand as much as it has been about problem solving. Instead of telling the world how great you or your company is; it often works much better to identify with a common challenge and provide the solution to that challenge.

When originators are looking to expand the number of referral partners they have, it is important to be sure they know what exactly they are looking for. Are you looking to expand with just anyone who might refer business, or do you have a specific set of needs for the types of referrals? It is simple enough to look at what you are trying to accomplish and create a realistic number of targets. An example I like to use is if you are looking for a referral partner that can send you one new transaction per month, you need to find someone who can send you two or three opportunities a month. You will also need to target three or four people so you end up with the one person you are looking for. It is also important to do a little bit of research into your targets to be sure the people you are targeting are really the people you want!

When targeting originators, you can’t just look for top producers to leave and come over to your side. While it would be great just to target the best two or three originators in your market, reality dictates you need to also look for more average originators that you can help grow into those top producers you need. Again, sometimes it is easier and faster to grow three or four originators with your better system than to pick off a top producer. Helping a 2-3 loan per month originators go to 5-7 loans a month will not only help your business, it will also give you a larger number of potential targets.

Now that we have looked at targeting, we do need to look at the final two pieces of the puzzle which are solving challenges and consistency of contact. Solving challenges is a pretty simple, ask what challenges people are seeing and resolve those issues. In today’s market we have a few issues that come right to the front that cover both areas, one is dealing with TRID. By now it has become pretty obvious the people and the companies that have a handle on TRID and can get deals closed in thirty days or less consistently. You either can or you can’t. If you can, find those that can’t and bring them over. Realtor® and originators alike are  finding that the public doesn’t care what the process is as long as they close on time. Those who can still close in thirty days or less have a huge competitive advantage; use that advantage to secure new relationships or acquire new originators.

Last but not least is being committed to the recruiting process. You must have a plan and schedule the time to act on that plan. For both originators and managers, it is important to create a consistent long term strategy for connecting. It may take, days, weeks, months, or years to get the attention of your target. You must not give up until that target tells you to leave them alone. Even then, calling them back once a year to see if they are still happy is a good idea, just remain consistent and courteous. Schedule regular days of the week and month to make recruiting calls or visits.

I will have much more on recruiting in this month’s coaching call. For those of you who are clients, you will get your invitation to that call shortly or you can just replay it from the website after January 27th. For those of you who are not clients, now may be a good time to think about investing into “ACCESS!” With “ACCESS” you enter the world of the client’s site that contains all the information. Every webinar, training, all the podcasts, e-books, scripts, fliers and support materials are always available 24/7. One small monthly fee with no long term contracts gets you all the ACCESS you will need to take your business to the highest level.

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“Be careful what you wish for!”

So here we go again, people are getting themselves all worked up over how hard it is to get a mortgage and how hard it is to buy a home. Yes, even those who should know better are looking for ways to lower standards so more people can qualify for mortgages. Are you kidding me? Has anyone forgotten what happens when you lower standards? Did we not just get through an entire era where everyone thought it was a great idea to lend people money that had no chance of repaying it on some misguided effort to grow percentage of ownership in this country only to find out that this was a bad idea and almost bankrupted the world?

We do NOT need to lower standards; we need to TEACH fundamental financial management in our schools at a very early age. We need to teach SAVING. We need to teach people about CREDIT, DEBT, and DISCIPLINE! We need to stop sending kids to colleges and universities who are borrowing huge sums of money in pursuit of a degree that won’t get them a job that pays enough to repay their obligations. We need to provide more opportunities to train our children in a skilled labor and technical trades that can provide great incomes for far less money than college cost and reduce the demand on these institutions so the cost of that education will go DOWN due to less demand. We need to understand that there are people in this world that will NEVER be in a position to OWN a home because it isn’t the best situation for them. We also need to understand a few basic concepts.

  • If you want to buy a home and can prove you are in a position to repay the money you want to borrow, there is no shortage of mortgage money.
  • With such a shortage of available homes for sale in many markets across the country, why the sudden need to find MORE BUYERS to fight over that limited supply?
  • In most of the country, renting is more expensive than ownership; shouldn’t we be looking into generating more rental opportunities?
  • As more and more people conduct their business outside a tradition office setting, and even some work many miles away and rarely if ever make a trip to a traditional office location, why aren’t we moving out of the cities that are too congested and find or grow new or smaller areas of the country where it is far cheaper to acquire land and build?

As a country we need to take a breath and stop over reacting to everything. Everyone needs realize that so much of the self-absorbed behavior and the almost constant victimization just need to stop. If you are offended, then get over yourself. Grow up and realize that being offended by everything is YOUR PROBLEM, not anyone else’s problem. You’re NOT entitled to own a home in this country. You are not entitled to an equal outcome. You are not entitled to be offended. You have freedoms and liberty and the choice to do with that the best you can to suit your own personal needs. That’s it. No guarantee, just opportunity. And while I am at it, let’s get rid of all the participation trophies. We need to go back and teach winning and losing. It feels good to win and it really stinks to lose. If you don’t like losing than practice and get better or quit and go find something you can win at.

So as the government begins another push to “level the playing field” by lowering standards and making it “easier” for people to borrow money. Maybe we need to take a step back and ask ourselves if this is really a good idea since we have already seen what will happen? Stop lowering the standards and spend your time making better people!

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“The Stress of Disorganization”

One of the biggest issues I deal with as a coach with my clients is stress. No doubt we can have many of stressful situations in our industry, but much of that stress is self-inflicted. Yes, many in our industry cause MOST of their own stressful situations by not setting the proper expectations and not having a transaction system that they follow each and every time.

The lack of a significant structured process by which a client and the associated referral partners move from first contact to closing and beyond. The lack of organization consumes a great deal of time, generates a huge amount of stress for everyone involved, and actually prevents a quality experience.

Another issue is that when you establish a firm transactional structure, the sheer repetition of doing the same thing the same way helps generate expertise and allows for patterns to develop that lead to constructive refinement of the process. Once refined and repeated, consistency and efficiencies help elevate the experience for all involved and allow for much more predictable results. This reduces the amount of time it takes to complete the process, and that reduces stress and improves the quality of the transaction for everyone and leads to more referrals!

It is important for originators to have a complete written plan on how a client goes from contact to closing. This also requires a time line that shows how, when, by whom all the tasks required get done. Transaction over a timeline is a key ingredient in getting more organized and creating the structure of a successful outcome. This reduces stress and improves the quality of each transaction while helping increase the quantity of transactions and referral partners.

There is a direct connection between quality and quantity. There is also a huge benefit in having your process clearly defined and measured against a timeline.

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