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Taking a More Strategic Approach

Like most salespeople, loan originators are tactical by nature. They operate on a “get-it-done” mentality, moving from task to task throughout the day, taking and making calls, putting out fires, handling issues and trying to pack as many activities as possible into a day’s work. This is why so many loan originators are successful. This is also way so many loan originators fail.

Imagine captaining a boat in a race around the world with no compass and no map. You could have a fast yacht, capable skills and an able crew, but without a course or a bearing, you’ll waste a lot of time sailing in the wrong direction. You may even get completely lost. I speak with many mortgage lenders who admit to me they are completely lost. They work hard and pour a lot into their careers; however, they are not quite sure where they are going (or if they do know where they are going, how they are going to get there.) These men and women are capable captains; they have a good crew of support staff and work for good companies with competitive products and services. The problem comes back to spending too much time in a “tactical” mindset and very little in a “strategic” mindset.

In coaching and training hundreds of mortgage originators across the country, I enjoy asking the people I work with some thought-provoking questions such as:

  1. Do you have clear, specific goals for this year?
  2. Do you have a written game plan for how you plan to achieve those goals?
  3. Do you review your plan on a weekly basis?
  4. Do you start each day with a to-do list?
  5. Do you spend most of your time on activities that generate the most important results?

As you can imagine, most loan originators answer an honest “no” to at least three of these five questions. They are focused on the tactical of today’s work at hand, and have little or no time to strategize what they are going to do tomorrow, let alone in six months.
There are several ways to think and act strategic and still be a successful salesperson executing the tactical activities your job demands every day. Here are five to consider:

Know the numbers behind your business. I hear originators say they want to make $100,000 a year or close $20 million in volume. But many of these same people do not know the strategy behind those numbers. Let’s say Beth wants to make $100,000 a year. Her average loan amount is $200,000 and she earns about $2,000 per loan. Beth must close 100 loans a year or eight to nine each month. Since Beth is successful in closing around 70 percent of the applications she takes, she must take 11-13 applications a month. If Beth converts about 50 percent of her prospects to applications, she must talk with 22 to 26 prospects each month, or an average of five to seven a week. That becomes Beth’s strategy; if she can talk with five to seven prospects each week, or one or two every day, she will earn $100,000 a year.

Do you know the numbers behind your business? You should. It’s not that hard to calculate your average loan amount, average commission per loan, pipeline conversion rate and prospect capture rate. All it takes is a little time studying your business. Once you know the numbers (the strategy) you can “chunk down” to activities (the tactics) you need to get you where you want to go.

Take control of your day. Few things will accelerate your success faster than becoming selfish with your time. Too many loan originators spend too much time doing what they should not be doing that they can’t get to what they should be doing. They move from task to task and fill each day with “stuff” that accomplishes very little (like a captain sailing in circles.) Without a clear map of how they want to navigate the day, they fall victim to other people’s problems, administrative duties and busy work. A group of about 75 loan officers I recently spoke with agreed that on average they spent 50 percent of their day doing things they shouldn’t be doing. When asked why this happens, one brave originator responded, “Because we don’t know what we are supposed to be doing, so we do whatever comes along!”

One of the simplest and best ways to get a handle on the day’s activities is to run your day from a specific to-do list. Five minutes at the start of every day listing the six to eight activities you need to accomplish will do wonders for you. If you are disciplined enough to keep, review and follow this list you will be amazed at how much more control you can create in your day. Your to-do list should detail specific tasks that lead you to your goals. (In our earlier example, one of Beth’s to-do activities each day should be: Talk with two prospects. If Beth achieves this on a daily basis, she will achieve her income goal.)

Abide by a “don’t do” list. Just as a to-do list will keep you focused on the things you should be doing, a “don’t do” list will keep you focused on what you should avoid. An example of your “don’t do” list might include things like:

  • Office chit-chat
  • Running personal errands
  • Driving out to take loan applications
  • Reading web sites and unneeded e-mails
  • Working with poor quality borrowers
  • Over-processing loans
  • Calling on low producing real estate agents

Keep this list posted at your desk. Laminate it if necessary. Review your “don’t do” list each morning to remind you where your time and talent could easily be wasted today. After a short time, you’ll be more consciously aware of those little time robbers that can creep into your day and keep you from executing your plan.

Look at your week first, your day second. This strategic activity will take you about 15 minutes every Monday morning. Ask yourself these three questions:

  1. What do I want to achieve this week?
  2. What events are coming up that I need to prepare for this week?
  3. What steps do I need to take this week to get me closer to my goals?

Thinking this way from the 30,000 foot level, will help you formulate your daily to-do lists with a clearer strategy. Essentially, this step conducted 52 times a year on Monday morning breaks down your annual goals and game plan into five-day segments. For example, if Beth wants to grow her builder relationships and construction financing business this year, she should be thinking about one or two key activities for this week to move forward on that goal.

Track your leads. Do you know where your business comes from? Top producers do. They can show you reports displaying where every loan was originated from and which of their sources generate the most revenue. This allows them to make changes to their sales, marketing and prospecting activities on a month-to-month basis to yield the highest return.

Tracking your leads can be done on an Excel spreadsheet or using a scrap of paper and a pencil—whatever works for you. Each time you get a lead, jot down where it came from (such as a magazine ad, apartment complex letter, or Realtor sales call.) In just a few months you’ll have a much better idea of what is really working for you and what is a waste of your valuable time and money. Then, adjust your tactics to the strategies that work best.

Becoming more strategic with how you run your mortgage origination business will have great advantages for you. Even though you may still invest 95 percent of your day (7 ½ hours) executing the tactical part of your job, you’ll be investing five percent of your day (30 minutes) building, reviewing and improving the strategy of how you do things. Would you be willing to invest 30 minutes a day in simple strategic activities that may result in a boost of 20 to 50 percent in production and income next year? If that sounds good, then the time to get started is now.

Douglas Smith

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