Dale Vermillion
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Why lenders and loan officers must do everything well to thrive in today’s fiercely competitive mortgage market.

Stepping into the new year, many in the industry are taking stock of the challenges ahead in 2019. From stifling competitive pressures, to ballooning costs per funded loan, to the demand for digital, it seems every aspect of our business is in a state of flux—driving lenders and loan officers alike to scramble for answers as pundits prophesy yet another apocalyptic culling of the industry.

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Over just the past few weeks, I’ve seen dozens of prescriptions for how to “succeed in 2019,” “curtail costs,” and “give your borrowers the digital mortgage experience they want.” And while many of these offer great value to their readers, none have taken into account the larger reality of what it will take to succeed this year in the mortgage industry: what I like to call Specialized Diversity, to coin a phrase.

Oxymoronic though it may seem, Specialized Diversity encapsulates my deceptively helpful answer to the question, “How do lenders and loan officers thrive in 2019?” By doing everything well.

Now, before you stop reading in exasperation, it is possible to do everything well. In fact, I’d argue as a lender or loan officer in 2019, you must. But let me be clear, while it’s possible—and, I would argue, necessary—to do everything well, you cannot do every single thing well.

Understanding Specialized Diversity

A fed-up engineer decides to sacrifice the security of a pension for the opportunity to launch his own car manufacturing company. Let’s call it Affordable Autos. Why? Because this engineer saw his former employer balloon production expenses by trying to offer luxury features at less-than-luxury prices. As profit margins compressed and sales slowed, wages—and eventually staff—had to be cut.

So, this engineer wants to do things differently. Rather than imitating what’s already out there, they’ve settled on a simple but actionable mission for their new venture: manufacturing a safe, affordable automobile for every type of driver.

From this vision, this engineer has set about drafting a production plan that outlined the development of the safest, most affordable model possible for each category of modern vehicle (a 4-door sedan, mid-size and full-size SUV, minivan, 2-door pick-up truck, and hybrid).

You see, Affordable Autos wasn’t in the business of offering several models in a single category (e.g. a 2-door and 4-door pick-up truck, or a luxury 4-door sedan and a performance 4-door sedan), nor was it in the business of competing for the titles of “fastest,” “fanciest,” or “most feature-rich.”

Affordable Autos was in the business of making the best model of every type of car in the safest and most affordable way possible.

In other words, Affordable Autos was committed to doing everything well, but not every single thing well.


Practicing Specialized Diversity

Returning to the question at hand, “How do lenders and loan officers thrive in 2019?” By taking the Affordable Autos approach to mortgage lending and practicing Specialized Diversity through the lens of their corporate or personal mission.

Is your company’s mission to provide the best customer service in the mortgage industry? Then ensure everything you do as a company (from the products you offer, to how you interact with your clients, to the technology you buy or build) you do to provide the best customer experience possible.

Is your personal mission to be the world’s most knowledgeable loan officer? Then ensure everything you do (from how you spend your time, to who you choose to work for, to the product line you offer) you do only if it contributes to your being more knowledgeable than your competitors.

Sounds easy enough, right? Wrong! Practicing Specialized Diversity takes intention, conviction, and—most of all—thick skin. If you’ve been to the company water cooler (let alone an industry conference), you’ve likely been battered by colleagues, competition, and the rest on how you have to “do this” and “not do that.” It takes guts to tune out the noise, to stay committed to your mission, and to only do what needs doing to accomplish that mission—regardless of what everyone else says or does.

But before I wax conceptual till the bone shows, let me share some practical tips for practicing Specialized Diversity as a lender or loan officer in 2019.

Specialized Diversity in Lead Generation

Understanding and acquiring the lead generation sources that will sustain your business growth in today’s highly-competitive market.

Learning the art of practicing Specialized Diversity begins with knowing how big of a net to throw, where to throw it, and when. So, I thought it best to start with the biggest net successful lenders and loan officers will be casting in 2019: a diverse suite of unique lead generation sources.

Though you could no doubt pursue more, the primary lead gen sources you should include in your mix in today’s mortgage market are: consumer direct, partner referrals, customer referrals, and customer renewals (i.e. repeat business). If you endured the analogy above, these sources would equate to the vehicle types Affordable Autos limited their focus to (4-door sedan, minivan, etc.).

In other words, you have to have a form of all of the above lead generation sources working for you in order to achieve the diversity portion of the Specialized Diversity equation. If you are lacking any of the above sources (and you most likely are, with my bet being on customer referrals), you have to activate those missing channels before you can outline your plan for specializing within each in light of your corporate or personal mission.

Ok, now that you have the proper mix of lead generation sources to sustain your growth in today’s market, it’s time to determine your focal point within each, and there’s only one way to do so: by knowing (and clinging to) your mission, and by knowing (and respecting) your unique advantages.

Consumer Direct Leads

Let’s start with consumer-direct leads. Generally speaking, lenders and loan officers have to both buy and generate consumer-direct leads to succeed; but, how you choose to do so should reflect your mission and respect your advantage.

When buying consumer direct leads, consider your target customer (which should be discernible from your corporate or personal mission) when, for example, choosing between LendingTree or Zillow leads. If you know your customer (and yourself) well enough, one source will simply be a better fit for your business—then it’s as straightforward as choosing that one. Easy enough? Great! Let’s move on.

What about generating inbound leads? Here is where the thickness of your skin will directly impact your success in 2019, because despite the inexhaustible number of ways a lender or loan officer can attempt to generate inbound leads (via digital marketing, social media, direct mail, etc.) no lender nor loan officer has the bandwidth, budget, or customer base to pursue all the roads that lead to Rome.

Instead, you must specialize and choose one—yes one—inbound lead generation strategy and be the best at it. How do you choose? Pick whatever reflects your mission and respects your advantage.

That means if you’re a social media-savvy Millennial with a mission to educate your borrowers better than anyone else, direct mail neither respects your unique advantage (knowing, for example, how to use hashtag) nor reflects your mission of educating your borrowers!

Similarly, if you’re a boutique lender with a mission to provide the absolute best in customer service, generic mass-marketing woefully neglects your mission while straight-up disrespecting your unique advantage (white glove customer care).

All that said, focusing exclusively on consumer direct leads in today’s fiercely competitive market will leave you crooning as your pipeline dwindles and auto dialer collects dust.

Partner Referrals

If ever there were a time to prioritize partner referrals (especially in the distributive retail space), now is it! As home prices cool, rates stabilize (ahead of anticipated rate hikes), and Millennials grow weary of waiting, realtors are poised to see their pipelines burst with activity—spilling referrals like candy from a piñata.

Hyperbole aside, any lender or loan officer who wants to crush it (and not just survive) in 2019 has to have vibrant, referral-generating partnerships!

Whether those partnerships are with realtors, CPAs, financial planners, builders, or some other class of referral source should—once again—reflect your mission and respect your unique advantage.

But let me be clear: just like you must choose only one consumer direct lead source to focus on, the same goes for your referral partnerships. Be the best realtor partner or builder partner or CPA partner on planet earth, but do not try to build partnerships with all of the above.

Why? Because it’s a two-way partnership! You need to understand and be able to meet the business needs of whomever you choose to partner with. So, pick one and be the absolute best partner you can possibly be to as many referral sources as you can add value to within that specific niche.

Customer Referrals

The unsung heroes of sales success, customer referrals should be an essential component of your sales methodology in 2019—the only question is how you choose to cultivate referrals (to learn my personal process on asking for customer referrals, contact my team at info@dalevermillion.com to discuss training solutions that might be right for your team).

And the answer to that question should—for the umpteenth time—reflect your mission and respect your advantage! For example, including a mail-in referral card with a borrower’s documents (or closing gift) after handling their entire application process digitally is a nonstarter.

The way you ask for referrals from your customers should reflect the way you market to, sell, and—generally speaking—communicate with your borrowers. That said, let me get you started down the right path: no matter how you choose to do so, plant the seed for referrals with your customers upfront!

Yes, you read that correctly. By setting the expectation at the point of application that if you serve your borrowers well, they will in turn refer their family, friends, colleagues, fellow bowling team members, etc. eases the tension around asking for referrals when all is said and done.

Now, how many referrals should you be asking for? Three, every time. Why? Walk through the math with me:

On average, customer referrals convert at 35%—or one in three. By asking for three referrals from every borrower and—on average—converting one of those three referrals, you turn every sale into two, doubling your production and your referral network!

It doesn’t take a polymath to see the value in rigorously cultivating customer referrals from every sales opportunity. And yet, because of fear of social awkwardness and—frankly—lousy customer service, most officers neither earn nor ask for referrals from their customers.

So be different! Stand out from the pack by serving your borrowers with zeal and they will want to reciprocate! You just have to show them the best way to do so: by allowing you to serve their loved ones too.

If you’re truly an advocate for your borrowers, and practice an OthersFirst mindset, your borrowers will not only be willing, but actually excited, to refer their loved ones to you.

In summary, diversify your lead generation with consumer direct, partner referral, customer referral, and repeat business leads, but take a specialized approach to generating leads that reflects your mission and respects your unique advantages.


Dale Vermillion

As a 36-year industry veteran, Dale boasts an unparalleled knowledge on running effective sales organizations. From leadership and team building, to systematic sales and service, to vendor and parner relationships, Dale understands every aspect of modern day lending and is committed to sharing his expertise in an accessible, actionable manner.