You Can’t Help Those Who Won’t Help Themselves!

It sounds like a very simple statement, but it’s true, you can’t help those who refuse to help themselves. As a coach and mentor, I know that all the direction and philosophy is wasted on those who won’t implement. In more than 20 years of managing, mentoring, and coaching mortgage professionals to the highest levels of success; I know all too often that many people will never invest their energy in improving their own outcomes. As my friend Steve Harney once said, “You can only pave the road in front of people; they have to drive the bus!”

You only need to look at the mortgage and real estate markets to see the proof. People are becoming more and more addicted to paying for opportunities than they are learning and mastering the skills required generating them on their own! This comes from the highest levels. Some coaches and trainers push the narrative. The very organizations who are supposed to grow and build these industries do nothing as the landscape shifts into a model the will push a vast majority of Realtors® and lenders into a low paying support role of a newly defined and automated industry!

Just like the companies who have reacted by putting in scanners in stores to take orders and check-out customers because of price pressure and the lack of people who feel that the quality of the customer experience is no longer required, those who no longer have those starting jobs now complain they have no opportunities to get a start! Well, this is being done to the mortgage and real estate communities. Loan originators and Realtors® don’t want to do the work and turn to automation to generate an opportunity, then don’t provide a great customer experience, the customer doesn’t see the value, then buys from an online company because it all became about the PRICE and not the total VALUE.

NAR and the MBA do nothing to warn, educate, support, or even bother to debate the issues at hand. When a CEO of a major lead seller, property marketer and buyer, and builder of the one stop shop to cover the entire transaction with the push of a button and not around qualified professionals; don’t be surprised when the consumer runs toward price and a lousy experience because that CEO know that Realtors and Lenders now need the lead provider MORE than the other way around!

So you get to choose; buy your leads and become dependent of the handouts, or learn the craft of being a quality professional that offers the consumer a choice of a quality experience. You can’t command top dollar for your efforts if you aren’t doing anything more than what an algorithm will do for far less money!

By 2025 more than 75% of those licensed in real estate and mortgage will be working in call centers, be in support of a lead person of a team, or out of the industry completely! Just watch! It’s becoming more about becoming a celebrity agent or originator, and NOT about being the local professional who provides a great customer experience. A handful of a few, supported by many, will become the new normal as nobody feels the need to do the WORK anymore!

Questions or comments: Mike@IMTcoaching.com

Are You Worth More Than $11.35 an Hour?

When you are involved with as many loan originators as I am, you hear all kinds of stories and concepts about how to generate loan opportunities. I think over the last few years, so many people have focused on lead generation that they haven’t spent too much time looking at conversion rates and profitability. A big issue was the issue of paying for leads. So I asked a number of originators to share some insights as to how they track their investment in buying leads and what the total return on that investment was, and how profitable it may or may not have been. The answers were pretty interesting.

  • The number one most interesting item was that mostof the originators don’t track their cost/hour investments in purchasing leads.
  • As a total percentage of their marketing budget in time and money, they don’t draw a comparison between purchasing leads and other opportunity generating investments.
  • Last but not least, they don’t work the math to show their effective income rate per hour of the work needed to generate each application that closes.

I believe that the mortgage business doesn’t do a very good job at working through the numbers. In one specific case, a loan originator with a significant investment in time, money, and effort; the math was very interesting to work through. It also opened the door to another whole area of discussion that we will follow-up in the future, what “power” do you give up when you are in pursuit of those leads?

After working through the math, this loan originator saw that the net income after expenses on all the other areas used to generate opportunities, her net hourly rate for just generating the lead that closes was almost four times the hourly rate that was found on the leads that were purchased. In fact, the net income per hour prospecting and working the purchased leads netted $11.35 per hour invested!

Now this is just one set of numbers, but I believe that they do share a story. The story is that the work needed to obtain the opportunity can vary widely across the board. The time it takes to work each lead and convert it into a transaction is something that becomes really important to measure.

As we all know, the math used to calculate how “well” someone is doing in our industry can vary widely. Units closed and dollar volumes can be just the tip of the real story if you don’t dig down to see the entire story. We all know people that have greatly inflated numbers or have huge teams of people funneling up that volume, or at what cost?

Purchasing leads isn’t a bad thing by itself. Large production teams are not a bad thing by itself. Marketing agreements, desk rentals, joint advertising, and other opportunity generating techniques are not bad things by themselves; it’s just vitally important that you know the true cost in time, effort, and assets and compare!

This loan originator discovered that making $11.35 an hour to work the leads to the point of a genuine loan opportunity wasn’t worth the effort. Others may feel differently, but you really need to drill down and know the math to be sure you are happy with the money you are netting for the work you are doing!

Questions or comments: Mike@IMTcoaching.com

Common Misconceptions

When you coach a wide variety of people you can hear a great deal of perspectives. People believe what they believe because that is what they know, not always what is true. The world is full of people who have always believed what they believe and have never had cause or reason to challenge those beliefs. However, many people have never reasoned out their positions one way or the other and are often spending time questioning them or abandoning their beliefs for something that appears more popular.

In our profession we are subject to constant pressure of outside influences. Market conditions change so we must adjust to them, but often we never question the adjustments we are making. Are the adjustments we are making really the correct ones to make? In many cases what has worked before will work again. In other situations, we must explore new solutions to old problems. However, we often don’t think about old solutions to new problems!

With the world full now of algorithms to solve every problem, the quality of the customer experience is now left to an artificial and programed response instead of a person communicating with a person. Just like the incredibly frustrating phone trees when you call many companies that try to electronically answer your question in a number of ways until you either hang up, or have to wait for a live person to answer and they have to ask all the same questions all over again to figure out that THEY now have to transfer you to yet another person to help you and you have to answer all these questions all over again!

Technology and speed are not bad for customer service, but its the failed integration of technology and personal attention that causes a great deal of modern frustration. So let’s have a look at a few things that can help mitigate some of the customer service nightmares and provide guidance to our customers and referral partners on how to have a great customer service experience by integrating our technology and our personal connection to our customers.

The number one misconception in our industry is that we must be available 24/7/365. Since that isn’t even remotely possible, why do we even try? Clients and referral partners will understand and appreciate knowing exactly how you handle calls and messages; and when they can expect a response. When you use a combination of voicemail, email, text, video and old fashion phone calls, you can provide a great experience for most everyone in your market and have a life at the same time.

The next biggest challenge seems to be lead generation. Everyone seems fixated about generating or gathering leads. I actually have to laugh at this because there is an entire multibillion dollar industry thats sole purpose is to sell leads to people that won’t spend a few minutes a day to generate them themselves! The belief is that the more leads you generate, the more money you make. Um,NO! The more deals you CLOSE the more money you make! So why is it that so few people in our industry have even the slightest idea of what their actual conversion rates are, and how to improve them?

The last misconception of the day is the actual VALUE of each referral partner and the COST in time, money, and effort that each referral partner takes. So much of the time I see people investing 30%, 40%, 50%, or more of their time, money, and effort into a referral source or area of business that produces less closed revenue than the percentage of the revenue invested in it.WHY? There needs to be a direct connection between effort and outcome!

So what are your challenges? What do you want to talk about? What are the areas of business that you want to discuss? Please let us know!

Questions or comments: Mike@IMTcoaching.com

“Stop looking for leads, generate opportunities”

It seems like the entire real estate/mortgage industry is heading down a path that is obsessed with lead generation. With rising rates and tight inventories, people are flocking to seminars, webinars, websites, and social media to spend all kinds of time and money to find leads. The issues are numerous with this concept, too numerous to deal with in one blog post, but the pure focus on lead generation is absurd and expensive. One of my clients told me that one of his realtor referral partners urgently called him because there was a popular service zip code now available for just $4,800 a month. She was very excited about this deal. I expressed to my originator that if this was truly worth the money, why did the last person give it up?

Another client I have was generating almost 200 leads a month. He had a team of eight people and converted about 20 loans a month. He came to me frustrated that his days were consumed with chasing prospects and documents instead to spending time talking to those referral partners he really wanted to work with. In the past year he has worked to reduce his lead generation activities and worked on creating opportunities for him and his referral partners to locate and assist the very people they wanted to serve in the first place. In the one year he reduced his overhead by more than $40,000 just in useless credit reports! He was able to eliminate two full time positions and convert another two positions to opportunity generation and relationship management from processing leads that were never going close.

In addition to those cost and staff reductions, the number of total hours worked was reduced significantly at the same time they were able to more than triple the amount of time spent with personally connecting with clients and referral partners. The result has been a real change in his business and quality of life. The contact to closing ratio has gone from less than 9% to more than 30%. He anticipates that by the end of this year he will see that grow to 40%! At the same time they are closing the same or more units each month.

By understanding where your business comes from and the type of people you really want to work with, you can vastly improve your business and not sacrifice results. You don’t get paid to generate leads; you get paid to close transactions. You need to fully understand where your business comes from and the time and money it cost you to make that happen. As I have said before, your process acts like a filter. Share the proper process, you will find the client’s and referral partners that control those opportunities. You must understand that it’s the quality of the customer experience and the value you provide to your clients and referral partners in the execution of your process that generates the opportunities you are looking for.

So compare your business to the “Referral Triangle” to see where your business is coming from. See if the time and money invested into your prospecting is generating the return you are happy with. If the percentage of investment isn’t equal to the return; you may want to rebalance yourself and make the most out of your efforts.

There is real change in our industry. Everyone seems to be in discount mode and ready to give away their money for the sake of closing a transaction. Well, unless you have an endless supply of money, you can’t ever lose money on deals and make it up in volume; that never works! The power is in being an expert. The value is found in the quality of the experience. It’s not about leads; it’s about closed and satisfied customers!

You can get a free copy of “The Referral Triangle” on the website: www.IMTcoaching.com

Questions or comments: Mike@IMTcoaching.com