Let’s talk about the power of consistency and what it really takes to create a consistent growing and evolving purchase-driven origination business.
One of the things we have to recognize is that there's a delay in the sales process in a purchase market environment. Right now, you're talking to buyers who won't likely be closing until July or August just because of the natural time involved with getting them pre-approved, getting them out shopping for a property, helping them get offers accepted, and then moving through the documentation and loan processing phase to closing. Having an impact on June volume is pretty much too late. What you have in the pipeline already is pretty much what's going to close for June.
So, now you need to be shifting your focus towards August, September and October. As our communities start to transition into back-to-school and fall activities, the purchase market across most of the country naturally slows down. Yes, I know you are also in the midst of one of the busiest buying seasons ever, in many markets around the country; however, the practical reality is that we need to be consistent in our marketing through the busy times, to have consistent closing volume in the slow times.
In our business, we really experience three filters or three cuts with clients.
Think about how many people you talk to who are interested in buying a home. Now ask yourself the following questions. How many of the people you talk to actually qualify for a loan? Out of the ones who qualify, how many actually end up winning a bid on a property? Out of how many who actually win a bid on a property, how many are actually pulling through to closing?
It’s key to know what those lead-to-closing ratios are. If we know that number, then we can determine what our weekly sales volume or lead generation activity should be based on. For most of the coaching clients I work with – even the best sales people – that net contact-to-closing ratio is about 25% to 30%. Translate this to numbers and that means 1 out of 3 people we talk to or 1 out of 4 people we talk to will eventually end up being a closed loan.
Now, work your numbers backwards. If you want to generate five leads a week that means you need to be talking to 15 to 20 people a week who are interested in buying a home or could benefit from buying a home. Remember, only 25% to 30% of them will get to closing.
As you plan your business activities to drive purchase business through the summer and into the fall, figure out your lead-to-closing ratio and build your lead generation activity around it. Remember, you’ll want to be connecting with three to four times more individuals than your closing goal.
To maintain consistency, keep track of the lead volume weekly with a lead log and focus on consistent activity each week. Every Thursday review the log and make strategic decisions about your activity late in the week. If you are on pace to meet your goal, celebrate and reward yourself. But if you are off pace, you still have time to make short term adjustments to your activity and make a few extra prospecting calls.
Erik Janeczko is the head coach and CEO for Maximum Acceleration, a coaching system designed to help mortgage, financial services and real estate professionals build their businesses faster by implementing proven strategies, with the use of exclusive technology and proprietary performance development systems. Erik is also active in state and national trade associations, serving on the education committee for NAMB and as education chair for MAMP since 2010 and as MAMP State President for 2013 and 2014. In 2013 Erik was honored with the designation of National Mortgage Professional Magazine’s “40 Most Influential Mortgage Professionals Under 40.”