MirroringJoe Cornosimilarities in businesses, marketing tools
There are numerous references to mirroring in the lending
business. It has become a very popular practice to mirror systems,
practices and processes. However, we should examine common errors
made with the various mirroring taking place.
For example, there is the mirror-under-the-nose loan qualifying
program. You hold a mirror under the customer's nose; if it fogs,
he qualifies for the loan program. These are the nothing-needed
types of loan products. These programs allow anyone to obtain a
loan, and the lenders have built-in risk protection for default and
possible foreclosure.
The programs do fill a need and are used repeatedly. If this
were not the case, lenders would not have the programs available.
The loans are used as a Band-Aid for a short time period - usually
within one year - but there are two- and three-year programs. They
come with prepayment penalties so that the lenders can benefit from
early payoff attempts. This is one of the built-in risk protector
examples.
The error associated with placing someone into such a loan
product is assuming that the borrower will change his past ways in
managing himself. In order to improve the borrower in credit score
or verifiable income, we may require that the borrower be nursed
through some system or organization rather than placing the burden
to improve on the borrower himself. Most people are creatures of
habit and will not change.
A few years back, the lending industry introduced 125 percent
loans. This is a proven standard of how people did not change
habits and did not follow the conceptual plan to eliminate debt. In
fact, it created added debt, and the default and foreclosure
percentile caused the loan program to cease. There are various
companies that are paid to handle the borrower's financial
functions. This is yet another Band-Aid for borrower habits.
We may wish to change our way of processing these types of
customers, making them accountable for their habits, ceasing to aid
them toward worse problems than when they were renting and making
them responsible for their own credit and/or financial ills.
Another mirroring shows up in Web-based loan companies. More are
copying each other as the leader in discount lending, and we see
startup, bargain basement, loan-in-a-minute Web sites. These, in
themselves, are very similar. The customer applies and receives
loan approval online. In an instant, the impulse consumer can
receive loan approval.
When comparing rates and fees, there are no large discounts or
savings to the consumer. The commercials, which run every 9.5
minutes on daytime and late night television, draw the customer to
the Web site. The speed and ease in applying draws people to
utilize such Web-based businesses. Service is very limited, and if
the loan takes longer than expected, there is no one to communicate
with.
Two items to consider in Web-based lending systems is to offer
better service and to truly discount the loan online. With less
cost to process the loan, there could be added service to the
customer. Create a virtual image in the upper-right corner of the
screen that would interact with the consumer, a virtual assistant
that could speak any language as picked by the consumer. Through
instant messaging, the virtual service representative would be
available 24/7. There could be a real person behind the monitor
somewhere in India. You knowoutsourcing!
Being the actual lowest in cyberspace is really difficult, as
already proven. If there are four Web sites claiming the lowest
rate and cost, three of them are lying. This concept of being the
major draw provides for a short-lived career. The point is, if you
are going to market the lowest cost and rate, then be the lowest
and actually discount the product. Service may be an easier task to
maintain than claiming to be the lowest.
Another mirroring is in marketing and processing loans. Most
companies operate on a month-end practice, and each and every final
week of the month is the most frustrating in the industry. If we
would change our own month-end to the middle of the month, we would
be closing deals in the most enjoyable time of the month.
Market the last two weeks each month and close loans by the 15th
of any given calendar month. With the exception of HUD loan payoffs
due to the interest expense, no loan saves any money or is better
off closing at month-end. Take advantage of the first two weeks of
the month by making them the last two weeks of your loans month for
closing and recording rather than the actual calendar
month-end.
Of course, in changing our perspective of closing loans, we need
to change perspective in prioritizing loans. The login stage of a
loan file is more critical than closing a loan. By making the login
stage the more important stage of the loan process, we reduce and
actually eliminate delays in the funding. Loan document arrival and
document order stages of the process would fall right into place
when the loan login is focused on as the most critical stage of the
loan.
By training staff and originators to do the critical work at the
login stage, we push-process and acquire key data to meet contract
expiration dates. In actuality, we are far ahead of the dates and
can close better and faster. This beats people waiting in hotels,
moving vans waiting in driveways and customers waiting at the
closing table with no loan documents to sign.
Mirroring service techniques is possibly the reason behind the
failings of most mirroring. The industry has unintentionally
downgraded customer service due to mirroring systems and processes.
With automation, service should be better, yet it continues to
decline.
Let me give one example. As an originator, you work with real
estate agents and the borrower in a purchase transaction. When you
receive the automated loan preview, whom do you contact first? If
the borrower came to your mind when reading the previous sentence,
no wonder sales agents do not like working with loan
originators.
The sales agent represents the buyers in the transaction and
your mirroring is circumventing the relationship when you go
directly to the buyer with the automated approval. Be true to
yourself. Did you not even realize that telling the borrower
directly is a disservice to the sales agent? Most companies run the
automated approval with the customer at the origination desk. Is
this customer service or professional disservice? As we stop
mirroring others poor service, we are able to look at things in a
different perspective. I was recently training, and a student made
the comment, When we see faults in the trainer, we are only seeing
faults that are within ourselves. We need to stop mirroring
ourselves to others and start measuring ourselves against
ourselves.
This logically leads into a mirror process of looking at
ourselves in an actual mirror. What do you see? What do you like?
What would you like to change? Of course, I am referring to more
than the physical image in the mirror. It is very important to
maintain a clean and professional appearance, but more important
are the attributes, qualities and professional code that we have
embraced. What is it that we see that we want to change within
ourselves? When we are trained by management to be ruthless,
vicious and downright difficult to work with, do we remain team
players? The extreme bottom line wears on people that lie in the
wake of the pounding waves that you pour out to acquire a piece of
someone elses market share. Are you part of a vicious or virtuous
company?
There is a trend to be a virtuous company and treat the
competition as allies in the industry. IBM averted a self-inflicted
demise by opening up their think tanks to others within their
industry. IBM is rediscovering and reinventing alongside past
enemies who have become allies, creating new mission and vision
statements and being in the service business to everyone. Is this
reverse mirroring or a switch to better brighten the image?
The purpose of this article is to make you think before you
accept some manner of mirroring. Though mimicking what seems to be
a successful business model may appear logical, the practice cannot
possibly take into account every factor integrated into another
corporate system. In other words, the mirror is warped. The time
may come when you look back on mirroring practices to see who
destroyed your business, only to see your own reflection. Joe
Corno is president of Utah-based We Be Consulting and Seminars. He
may be reached at (801) 836-2077 or e-mail
[email protected].
