This week, the spotlight shines on selling, and our guest expert is Nick Hedges, CEO of the El Segundo, Calif.-based Velocify Inc.
Q: How would categorize the overall state of sales within the mortgage industry?
Nick Hedges: I would give the state of sales in the mortgage industry a five. Mortgage salespeople face two major challenges right now. One is a little beyond their control, which is the growing number of rules and additional steps that are required to sell a mortgage today. This makes a loan officer’s job that much more difficult, because part of selling loans is explaining to borrowers how the mortgage process works and what they, as borrowers, need to do. The second challenge is that the industry, as a whole, is struggling to keep up with how borrowers are shopping for mortgages today. A recent Fannie Mae survey found that more than half of all borrowers are now shopping online. This trend is challenging mortgage professionals who relied on referrals or more traditional ways of attracting business. And the trend is only going to continue when the Millennial generation really starts buying homes.
Q: How do mortgage professionals compare to other financial services professionals when it comes to sales and customer service?
Nick Hedges: From a one-on-one standpoint, mortgage professionals are impossible to beat when it comes to sales and customer service. It takes a very special type of person to sell home loans. Mortgages are the ticket to homeownership for millions of Americans every year — yet they are incredibly complex products, and they are growing more so all the time. The mortgage sales cycle can take weeks to months, and each borrower must make many important decisions along the way. It takes a lot of experience, coaching and patience to help borrowers through that maze. Mortgage professionals also face tremendous pressure knowing that if things go wrong — even if it’s not their fault — they could get blamed and their business could suffer. It’s not a trade for the faint of heart.
Q: What industries outside of the financial services world can offer inspiration and education to mortgage professionals when it comes to quality salesmanship?
Nick Hedges: If there’s one thing mortgage professionals could use to improve their salesmanship, it’s speed. Ask most borrowers who had a bad lending experience what the problem was, and more likely than not, they’ll say the loan officer didn’t return their calls. In fact, the mortgage industry does not have a great track record in this area. A couple of years ago, we did a blind study of mortgage lenders and found that most did not respond to a customer inquiry within 24 hours, and some never called back at all.
There are certainly lessons to learn outside the mortgage industry. For example, besides providing sales automation tools to the mortgage lending industry, my company, Velocify, also works in the insurance space. There, speed is even more critical than in mortgage sales. Someone shopping for an insurance policy online can expect a call from as many as 10 insurance agents within an hour of submitting his or her contact information.
Many large insurance companies have poured millions into high volume call centers. Yet we have one client that is generating 400 new policies per month with just eight full-time agents. That’s 50 policies per agent per month, which is practically unheard of in the industry. I know we’re talking apples and oranges here, but just imagine loan officers having those kinds of loan numbers. They’d be unstoppable!
Q: How can today’s technology be harnessed properly to ensure improved sales?
Nick Hedges: First, lenders and mortgage professionals need to change the way they think about technology and sales. CRM software and an email drip campaign are not going to help you convert borrowers. To get real results, one needs to apply the same level of automation to mortgage sales that is currently applied to the mortgage production process.
The second step is to create a strategy for targeting and attracting borrowers online. We’ve seen a tremendous surge in the number of lenders using digital marketing, third-party websites, social media and mobile apps to find motivated borrowers. But many of these lenders fail because they don’t have a clearly defined strategy for following up with interested borrowers.
Finally, mortgage professionals need tools to respond quickly to borrowers and to stay engaged all the way through to the closing process and beyond. This is where Velocify comes in. We have mortgage clients from large lenders to small shops that are using our sales acceleration suite to successfully target and convert borrowers, and many of them have increased their closing rates by 50 percent or more. Talk about an edge!
I should mention that the mortgage industry is still in the very early stages of leveraging sales acceleration. That means there are still huge opportunities for today’s lenders to leverage these tools and transform their sales operations. It’s exciting when technology can dramatically improve the conversion of leads into prospects, so we’re very excited to be on the cutting edge of this change.
Velocify Inc. is online at http://www.velocify.com.