March 6, 2013

Third Prize Is You’re Fired – a word on the hard sell

March 6, 2013

Third Prize Is You’re Fired – a word on the hard sell

Second Place Is A Set of Steak Knives

I’ve never been the hard sell guy. In fact just yesterday, I met with a new Realtor who’s ramping up her business and explained how when she’s sending clients for me to pre-approve, I don’t push them to run credit and lock rates, but rather push them on defining their objectives and giving us accurate income/asset information so I can win them over by advising properly. Sure, you need credit to advise properly as well. But you need credibility first.

So after that meeting, I read HousingWire reporter Brena Swanson’s post about how she was researching Quicken Loans and got the hard sell from their call center. Right after she completed a profile on their website, it went like this:

One…Two…Three… seconds and my phone starts to ring. About as fast as I could hit submit, Quicken Loans already had my number in the system and was calling me, and it was not an automated call. I answered and admitted I was a reporter doing research on mortgage originations, to which he replied, “Even a reporter needs a mortgage.”

I told him twice I was solely doing research, but he still persistently interrogated me for information about when I would be interested in purchasing a house.

Fascinating for a couple reasons:

First: Great Technology. That response time is amazing. Speed does kill in a transaction-driven world. And that speed helped Quicken Loans increased their 2012 volume 117% to $65 billion in fundings, making them the country’s sixth largest lender in 2012 according to Inside Mortgage Finance.

Second: Awesome anecdote about The Hard Sell. I laughed reading that story because I’ve seen droves of hard sell guys like that over the years that just won’t take no for an answer. Or worse, they’re so focused on their endgame, they simply aren’t listening to their clients.

Some were hacks and are long gone. I think about guys like that whenever someone learns what I do then replies with: “Yea, I used to do loans back in the day.” Kind of reminds me of this ad Turbo Tax is running right now about a couple who’s got a plumber at their house and the husband looks down and realizes the plumber used to do their taxes. It’s a clever way of pointing out how the big tax prep firms can train basically anyone run down a standard process, but the client ultimately loses. Unfortunately, the same thing goes on in the lending business.

Also reminds me of some loan agent interviews I do when people are looking for jobs. I ask the truly basic questions thinking I’m going to offend people. Something like: which federal tax schedule does a primary residence deduction go on? Or an even more basic question that any loan agent should know for themselves AND their clients who are in sales: which federal tax form and schedule does a W2 employee use if they’re deducting business related expenses?

Scary thing is that there are people out there doing this job for years who can’t answer these questions. I take some punches from friends in the industry who think I’m too hard on that sort of “technical stuff” because the argument goes: “that’s what processors and underwriters are for.”

But damn, if you’re doing mortgages for a living and you don’t even know where the primary residence mortgage calculations go on a set of tax returns, that’s truly scary to me (by the way the answers, respectively, are Schedule A and 2106/Schedule A–like I said, truly basic client analysis questions).

On the flip side, there are some hard sell folks who have been around for years, know what they’re doing, and still don’t take no for an answer. Maybe they were groomed by an old school hard-ass boss who taught them everything about income and asset analysis plus all his secrets about getting clients to commit. Or maybe they just watched Glengarry Glen Ross too many times and think they’re going to get fired if they fall behind in the sales contest (the famous ‘Always Be Closing’ video is below).

These are guys I wish I could be more like. Pressing the “I’m talking to 4 other lenders” type clients to commit instead of trying to slowly win them over with all of the education. But like I said to the new Realtor yesterday, that’s my model and it works for me. Because the “technical stuff” DOES matter (for client decision making and for loan quality), and nobody will ever convince me that it doesn’t.

But I’m sure the sales execs who built Quicken Loans would support their model just as firmly. It’s hard to argue against my model, and it’s also hard to argue against a model built on a combination of speed and strong salesmanship … IF the processing and underwriting support is there to back up the hard sell guys trying to get loan commitments from reporters who aren’t even trying to get loans.

Still laughing about that—it’s so awesomely blatant, it’s hard to even chalk it up as a PR blunder. One day soon that that guy will win the first-prize Cadillac in the big sales contest, and maybe I’ll just come in second to win a set of steak knives. But I can live with that as long as my clients feel more informed. As for those who can’t answer the basic tax return questions, maybe you’ll get by for another year or so as the refi boom wanes, but just remember: “third prize is you’re fired.”

“Even A Reporter Needs A Mortgage” – by Brena Swanson, HousingWire

3 Drivers of Salesmen: Greed, Hostility, Immaturity

Always Be Closing (Glengarry Glen Ross speech – Alec Baldwin)

Follow on Twitter: @BrenaSwansonHW, @QuickenLoans