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This article describes a competitive situation in the mortgage industry, but the concept applies to all industries. If you are a sales manager or salesperson, please use this article to help evaluate your team's or personal selling habits.
I"ve consulted with and coached many mortgage loan officers, branch managers and more senior executives. Almost everyone of these individuals specifically mentioned Quicken's Rocket Loans and their effective advertising as a significant competitive threat. Therefore, we spend significant time preparing pro-active and reactive responses to the loan officers' referral partners and prospective clients when Rocket Mortgage is a competitor. The successful loan officers who are consultative and can sell value typically handle the objections and have very successful results and Quicken becomes just another competitor to them. Many mortgage companies now have or are developing their own on-line solution to this threat.
Most loan officers are missing a competitive challenge that is costing them and their company millions of dollars in closings. Most loan officers lose do not put in enough effort to convert a referral partner or client as Quicken does. This lack of follow-up activity applies to almost all sales positions in any industry. If you aren't in the mortgage industry, what would this lack of follow-up activity cost you or your company? Lots of money for sure.
Here's my story.
I recently refinanced my home to purchase some land. Out of curiosity, I contacted Quicken Loans for more information. My objective was to study their sales process for the benefit of my clients and also to get a rate quote.
Here is What I Found
1) Quicken Loans sales personnel are well trained on the phone. They handled my call perfectly. They absolutely refused to give me a rate quote, which is the mortgage industries version of "price". When I used the objection that I had to speak with my significant other, the person immediately tried to set up a meeting with both of us. The person was clearly trained to follow a specific process. Most likely, it was scripted, but it did not sound scripted.
2) I got more than 30 phone calls over the next 40 days! This is the big difference. 30 call attempts to make a single contact! That's an amazing number of dials. Sounds excessive, right? Well, they clearly have a call center and can make an enormous amount of dials per hour. Therefore, they make more contacts per hour than someone working in a non-automated or less process oriented environment, which means a lower cost per dial.
3) They stopped for two weeks and then contacted me 7 more times. That's a good idea to make a few more attempts to see if I closed on a loan yet. Finally, I called them back and told them that I refinanced through the same loan officer I used for my house purchase
Here's the Takeaway
1) Make phone calls to your qualified leads until you contact them and get a decision. The key here is qualified. Your sales people's efforts on the phone following up on leads should be determined by the "Return on Investment" (ROI) on their efforts. Need some help determining the right amount of investment? Then e-mail me and I'll get back to you with a response promptly.
2) Determine the amount of sales effort by the quality of lead. In other words, if a sales person has a highly qualified opportunity and can make a $3,000 commission like the Quicken example, the salesperson should make as many calls as you believe the she/he should to make contact. If you will make $300 on the sale, it may not be worth the same amount of effort. I like the number of a maximum of 12 dials to make contact, but again, that is too random a number to recommend to all. You need to determine the correct number by understanding the cost of a dial and a contact, then doing an ROI on the expected return from a sale.
3) Telephone sales calls maximize lead penetration and sales success! Almost all loan officers do not make many prospecting phone calls. A lead as qualified as a pre-approval often gets little follow up unless the prospect takes some extra initiative. This is another reason why Quicken is a threat. Do not let your sales team contact by email or text only if you have a phone number. Whether the goal is to set up a meeting or close a sales over the phone, they won't get the best results without maximum effort.
What About Your Company? What's your opportunity cost?
Do you invest any money into lead generation? If so, do the opportunities from your investment get adequate follow up? What about lead opportunities self-generated by sales people? Do they put enough effort into closing those opportunities? Are you comfortable that your sales people are putting maximum effort into the right opportunities? How much do you make on the average sale? How much are you losing on a missed opportunity?
Rank your leads from highest value to lowest value. Put your greatest effort into the high value leads, while relegating the lower value leads to email and mail (if you do that). Determine the amount of dial attempts to make contact based upon the ROI you should get from your efforts. Monitor your sales personnel for their dials, contacts, meetings, closes and any other success metrics you may use. Hold them accountable for closing leads or hand them to someone else who will work them more effectively.
Thank you for reading this article. Chris
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