There is a ton of sales and marketing information out there for loan officers - what is actually worth your time and what isn't? I've read numerous books, listened to plenty of presentations and conducted several training sessions on sales and marketing. Some of it has been junk, some of it has been recycled common sense, but some has been pure gold. What I will do today is try to boil down the key themes (that work) of sales and marketing in five easy to remember points. Although these tips and ideas may look generic, but they do work mortgage marketing, loan officer marketing and pretty much any type industry.
1. Scarcity Drives Demand
No this is not a lesson in economics 101, however it is a rule of economics that holds true. When things are limited or exclusive to a group of people, customers want it. It's part of the "you want what you can't have" cliche. Think back to high school. You may have gotten dumped by your sweetie (maybe you weren't even that crazy about the person). Now that single person is all that you want, all that you can think about. That person just became an extremely scarce resource to you. Okay - common sense, right? However, there are some specifics that make it even more effective. The scarcity rule is most effective when:
The thing desired is newly scarce. The news of its scarcity is exclusive, for example “You can create a seminar exclusively for real estate agents successful facebook campaign management”
2. Social Proof
As human beings, we are innately social creatures. This has helped our survival for thousands of years. We look to others for cues on how to live, eat, act, work - on just about everything. It's only natural that we seek out social proof in order to confirm our purchase decisions. We feel more comfortable in making a decision if we are backed by other people. There are four main types of social proof:
Approval from others that we know and trust - When a friend or family member suggests that we go see a movie or try out a new website for tracking our budget, we tend to buy in at some level. We become comfortable with the idea because they did it.
Approval from the masses - We see product websites and TV commercials with tons of testimonials. When we hear other people had a pleasant experience, we are much more likely to buy. This may not be as powerful as approval from those we know and trust, but it is a powerful tool nonetheless. Think reviews on Amazon.com. Perhaps the best example is Michael Jordan and Nike creating the Michael Jordan shoe - a franchise that still lives on today.
Celebrity endorsement - like it or not, Western culture is obsessed with celebrity. We read magazines about what they eat, what they wear and who their current love is (even if it's not true). When a celebrity endorses a product and that celebrity has people that follow and want to be like them, that is a quick way to get a large group of people to buy.
Expert opinion - When a doctor recommends we try something - a medication or other therapy, aren't we very likely to try that? Or when expert research is shared with us about the product we are more likely to buy.
3. Less is More
Another term we have heard so many times, but is so true. When people are given more of anything it becomes harder to process and make decisions. Here are a few types of the less is more principle in action:
When a customer has less choices, they are more likely to purchase. There is a famous study that was done where a seller of jams at one time had a table of 24 varieties and at another time only 6. After completing the experiment researchers found that on average the table with 24 varieties only sold jam to 3% of customers, while the one with 6% sold jam to 30% of customers.
In branding and advertising, less words = more. In a world full of distractions and seemingly non-existent attention spans, companies need to battle for mindshare. This is why you should try to associate your brand with 1 to 3 words. What comes to mind when you think of the word "search." Did you think Google? Another part of using less words is in advertising, the less you put on an ad the more people will read. An ad with two words will catch the attention of many more people than an ad with a paragraph. Simple.
Adding can subtract to value. In a study discussed in Pink's book there was an experiment where a company was selling a two versions of the same program. One had the full package and they also threw in a free book; the other was just the full package. People were willing to pay more for the package without the book. By adding something less valuable on top of another product, the value had gone down in customers minds.
4. The Law of Reciprocity
Human beings all over the world in different cultures and languages act upon the law of reciprocity. If I do something for you, you feel at least somewhat obligated to do something for me. A popular leadership professor, Dr. Robert Cialdini from Stanford University, gave a speech that included this very subject. He wanted to test out this theory, so he began to send Christmas cards to random strangers. Some of these people started sending Christmas cards to him every year, and he continued to send to them, and eventually became friends with these people.
When people are given something, they feel obligated to give to you in some way. Many companies give customers a small item or do them a favor, and the customer ends up purchasing from them later. Obviously it's not a guarantee to success, but it does increase chances of success.
5. Get Personal
When it comes to selling and the future of selling, the ones who understand how to tell a story and create experiences for their customers will win. Traditionally the selling method had been to have a great product and tell the customer about its benefits. When you get to the core reason for many purchases, people don't buy because of the benefits. Benefits can be helpful to the customer in the process, but what they want is beyond that.
Ted Levitt, a popular economist and former Harvard Business School professor was famous for saying, "People don't want to buy a quarter inch drill, they want to buy a quarter inch hole." This is the next evolution of selling, selling solutions. Solutions based selling goes beyond benefits and specs, and solves the problem that you are currently facing. Great, we've made some progress, but we're not quite there. Keep asking why.
Why does the person want a quarter inch hole? Is it for a room they are renovating? Are they working on a craft project? What is the imagination they hold in their head? Get to that and you may have a customer for life. This is the next step in the evolution of selling, getting to the root motive. Continuing with the drill example. Perhaps you could help the customer imagine all of the great projects they will do with this handy drill there with them. Tell a story of a customer that built an award winning piece of furniture with this drill.
Stories and experiences touch the hearts of people. When emotions get involved, people no longer care about making computer-like rational decisions. In fact, that is how we operate 99% of the time. Our decisions are made by some type of emotional pull, even though we may mask it as rational. I may do a future post on this topic.
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