An ex-real estate executive gives mortgage originators words of wisdom he learned from his father in a business downturn.
Even though today’s real estate crisis is reportedly one of proportions unseen before, the truth is there are lessons to be learned from the past, the opening keynote speaker at the California Mortgage Bankers Association’s Annual Sales & Marketing Conference said.
Rick DeLuca, who is now a speaker and trainer for Buffini & Co., told attendees at the Long Beach, Calif., show (co-presented with the California Association of Mortgage Professionals) that he got into the real estate business in the mid-1970s and thrived until 1979. In that year, business fell so much it was like “someone turned off the faucet.”
Eventually, he admitted he went into panic mode, so he turned to a trusted source for sales advice, his father who ran an auto dealership.
One of the first pieces of advice his father gave him was that while it was great to have a 12-month plan, given that times were tough for everybody, we really have no idea what will be going on 12 months from today.
DeLuca mentioned his father said rather than focus on 12 months, focus on what will be happening in the next 12 weeks. While it is good to have an annual plan, the 12-week cycles allow salespeople to adjust and modify their plan to meet current conditions. If a sales person can do that, the year takes care of itself, he said.
He added what is missing in the real estate sales business is the need to create accountability for one’s job performance.
During the 12-week (or 90-day) cycle, it is important for sales people to schedule personal time in their calendar, because if it is not scheduled, it won’t happen, DeLuca said.
Sales people should also schedule self-imposed deadlines; yes, it creates more pressure but it allows for better focus on the task at hand.
Another lesson he said he learned from his father was regarding generating sales leads. Before the crisis in his business, DeLuca was doing many different things.
His father told him that people become successful when they do fewer things but they do those things well and consistently. If you are spread too thin, the best you can hope to become is adequate.
DeLuca said he talked with his father regarding building a referral-based business. While there are many answers on why someone would recommend a business to their friends, DeLuca declared his father told him it came to trust.
Sales people need to examine how to build trust and why do their clients trust them.
There are two ways to build trust: demonstrating your character and demonstrating your competence. The issue is how to convey these traits to others.
However, DeLuca declared, peoples’ ability in getting the message out regarding their competence has been pathetic. The way to show competence, he said, is through the professional activities you take.
In the days before the rise of personal computers, DeLuca’s father used the “shoebox” approach for client relationship management. The boxes contained index cards of whomever his father sold cars to and each evening, he would be calling clients, typically for 90 seconds, and after the call put more notes on the card.
His father used a “target” system to determine who to call and how frequently. His father didn’t treat people equally but rather on what part of the target they were in; he did treat everyone fairly, DeLuca declared.
Those in the bull’s-eye are the ones who enjoy when you have reached a level of success. In fact, DeLuca said, these people “live and die with your success.”
When he was in the real estate business, the mortgage originators he would refer would be the one he had a relationship with. The No. 1 thing he wanted from the mortgage originator was communication.
This was because without any communication, DeLuca could lose credibility with his client, the homebuyer.
One of things DeLuca’s father suggested was to send the entire database once a year a thank-you letter. This would help to give the database “ownership” of his success.
Another suggestion was to host some type of client activity, like a party. Invite everybody and don’t give any sales speeches. The people who show up are the ones who like you, DeLuca said his father told him.
After the event, send a thank-you note to those that attended. As an update to match the current technology capabilities, DeLuca suggested getting a Flip camcorder (a small video camera that links to a computer via a USB port), taping the attendees giving you a testimonial and putting it online.
While the ideas haven’t changed, he declared, the tools that sales people use have. Speaking of testimonials, he went to YouTube and found only 38 hits of California lenders; the first 15 of those were Quicken.
There is a disconnect between sales people and their activities after initial contact. DeLuca cited figures that found nearly half of sales people do not follow up with a potential lead. But nearly 80% of people make a decision to buy after the fifth contact.
He added that many people abandoned their marketing activities during the boom time because they got so busy; they stopped doing the activities that made them successful in the first place.
About two-thirds of the business lost by sales people is because of “perceived indifference.” This is especially true of the people DeLuca said should be in your bull’s-eye. This group should not be treated the same as your other clients.
Thus mortgage sales people need to either mail or e-mail something to this group that reinforces the sales person’s competence. During his presentation, DeLuca showed some of examples of e-mails that failed to reinforce competence. The poor examples included an e-mail with a typo, one that had too much information and another that was three pages long.
To demonstrate competency, DeLuca suggested originators need to be a student of the industry, they need to know statistics and they need to know the history of the business.
Another pair of presenters during the show, Deborah Shames and David Booth of Eloqui, spoke of the need to create a connection with the client.
Booth said being seen as a trusted advisor is the most valuable role a mortgage sales person has. Shames said the first step to achieve this is the need to communicate care and empathy.
Booth said the second step is to show an understanding of the industry and of your client’s needs, while the third is to listen and ask good questions, added Shames.
Too often, sessions with clients are data-sharing exercises, Booth explained, and only if the sales person starts digging deeper to find out what brought the client to this area of challenge they will have a better business development meeting.
And it is important to be “authentic” when speaking to a potential client. The more the sales person is his or herself, the more likely the client will trust that person sooner, Shames said.
Stories appeal to potential clients, as long as they are not rambling ones. Shames compared it to a “three-act play.” The story has to have an obstacle for the client. It needs to have a solution you provided to help the client overcome the obstacle and it needs to end with an unexpected benefit for the client, she said.
