How to increase your business by building client relationshipsDr. Kerry Johnsonrefinance or purchase, real estate agents, certified public accountants
Tim was on the verge of bankruptcy. Nobody seemed willing or
motivated to refinance or purchase. Still, Tim didn't want to have
to start a new career. Real estate agents seemed to spin his
wheels. While he was able to meet with certified public accountants
and financial advisors, they seemed more willing to receive
referrals than to give them. Tim did five loans in June and only
three in July—a classic downward spiral. There was not enough
business even to keep the doors open. Then he decided to do
something about it. He became proactive about sales, instead of
reactive, hoping business would just call in. He became a
sales-focused Mortgage Broker, instead of one waiting for the phone
This month, Tim put 15 loans in the pipeline. He hired another
two sales producers, instead of standard cookie-cutter loan
officers waiting for the phone to ring. Tim is on track to
originate 180 loans this year, while many other brokers are closing
their doors. How did Tim do it? How did he turn his company around
from a money loser to a cash cow?
When your clients first approached you years ago, they shopped
your rates. If you had the lowest cost, you got the business.
Often, prospects would even call, ask your rates and fees, and then
hang up without even saying thank you. Prospects haven't changed,
but you should. According to the University of Connecticut, 87
percent of your clients care more about their relationship with you
than your rates and fees. This seems illogical, unless you consider
why they bought in the first place.
Al was like that. He refinanced my house in 1999 and didn't even
so much as dial the phone to say thank you for the business.
However, I did get a postcard telling me how much his company has
grown. I have refinanced once since then, with another lender. Two
years ago, I added 3,500 square feet to my home and did a new first
floor with a third lender. I didn't use Al. Why? Did Al do a good
job? Yes. Didn't he lower my monthly payment? Yes. Why did I use
the competition? Al lost the relationship. He didn't keep in touch.
While Al did send a postcard every six months, he made me a
transaction instead of a client.
What clients want
According to the Consumers
Union, only 17 percent of consumer purchasing products last
year for more than $500 used the previous lender. This means that
you have likely lost contact with your clients. Many producers are
still waiting for the phone to ring. However, when customers were
asked if they would purchase again from the last vendor, 89 percent
said yes, if their vendors had bothered to follow up on the
relationship. According to Forrester Research, there are
three key items your clients want most.
1. They want a working knowledge of the product. Your clients
really want to know what they bought, and they want to know about
other service and product options. They don't want to become
experts. They depend on you for that. They do want to know what
they have and what is available.
2. They want you to monitor their purchase or service as if it
was your own. You are constantly looking for ways to gain more
value. You are privy to the most current products and services on
the market. Your clients want the same consideration.
3. They want frequency in a relationship. They want to hear from
you at least every three months. I mentioned this to one sales
producer who told me he sends a newsletter every quarter. Didn't
that make a difference? The answer is: Would you rather hear from a
trusted advisor personally or see her name on a sheet of paper
every once in a while?
How to triple your sales this year
Peter, a Mortgage Broker in Atlanta, Ga., has 3,000 clients from
business he has refinanced over the past four years. This is a
treasure chest in future business. Lately, he has been striking
out, calling real estate agents who are also suffering. The problem
is they are sometimes rude and often flaky. So Peter started
calling his past borrowers. At first, it was awkward. He felt
guilty calling borrowers who hadn't heard from him in the past
three years. However, he sucked up his call reluctance and did the
dialing. Surprisingly, nearly everyone seemed glad to hear from
him. They asked about his family and even expressed gratitude for
the great job Peter did on their last loan. Peter is now using a
three-step process that is earning him an 11 percent closing rate
on all past borrower calls. He is closing 11 applications out of
every 100 phone calls. Here is his three-part strategy.
1. Catch up: Peter calls the client and catches up on
the family. He asks about Johnny's soccer schedule, if dad
volunteered this year to be Johnny's coach, and how mom's new job
2. Update: Peter then tells the client where rates are
right now and how that will affect the client's home's value. This
appraisal estimate is the silver bullet for real estate agents,
helping them motivate sellers to list their home. Even when the
client doesn't want to sell, he still wants to hear about his
home's value and what is likely to happen over the next year. Peter
did some research on the client's rate before the phone call. He
also knows, ahead of time, if he can save his client money. He asks
if the client would like to combine the first and second to save
another $500 a month. Most say yes. Even when he can't offer
savings, he knows how to follow up with a product his clients can't
say no to.
The average American household has $17,000 in credit card debt.
Peter pitches that for effect. He then asks if the client has more
or less than $17,000 in debt to get the conversation started. He
then closes by asking, "If you could write off the interest
payments on your credit card debt and save 30 percent, would you be
interested?" At that point, Peter starts the discussion about a
home equity line of credit and/or a second mortgage. Eleven percent
of all past borrowers ask to start an application.
3. Referrals: After the questions about loan programs
and consolidating debt, Peter asks for referrals. He knows that
every client knows 250 friends, relatives and neighbors he could
refer. So he expects to get three referrals on every phone call. In
fact, 55 percent of all his clients will refer at least five
friends. All Peter has to do is ask. He doesn't make the mistake of
advertising for referrals, as most loan originators do. He doesn't
say: "If you know anybody, please tell them about me." He says:
"Who do you know who could benefit from the kind of relationship we
have had so far?"
Five hundred committed relationships
We know that a typical consumer makes a car purchase every five
years, leases a car every 3.2 years, refinances their mortgage
every seven years, makes a major financial investment every nine
months and purchases an insurance product every 10 to18
Mortgage Broker David's formula for success is
five-two-11—five contacts a day, two appointments a day and
11 closed sales a month. The math is simple. The results are
spectacular. David can't hire enough new sales producers to take up
the overflow. The ones who will make the outgoing phone calls are
hard to find—but the ones who do are now making $200,000 a
year, even in a bad economy.
Getting to the next level
Making your business profitable is all about relationships, rapport
and trust. That is easy to agree with. Would you like to get an
even better return on your time than Tim and Peter? See your
customers face-to-face. David did that. At first, he started the
three month call script. He was also shy about forcing himself on
those who didn't have a need. Through coaching, David was
encouraged to book appointments and get to know his customers
better. Then, magic happened. Even those who didn't have a need for
a new product on the phone decided to buy when David met
face-to-face with them. While David was able to close 11 percent of
his past customers on the phone, he closed 36 percent of those he
saw face-to-face. His closing rate on referrals was even
Why would you see someone in person when you can save time on the
phone? Would you rather see your real estate agent face-to-face, or
would you be able to gain the same level of trust only on the
phone? Would you rather see your lawyer face-to-face on an
important case, or is the phone just fine? The answer is obvious.
Your closing ratio face-to-face will always be higher than on the
Your business has changed. No longer will you be able to stare at
the telephone, hoping it will ring. There are strategies you can
use to double the business you were able to snare over the last
three years. Your business now is all about relationship, rapport
and trust. The better you can manage them, the more business you
Dr. Kerry Johnson is an author, frequent speaker at
conventions around the world and head of Peak Performance Coaching. He
may be reached through his Web site, www.kerryjohnson.com.