There is a ton of sales and marketing information for loan officers - what is actually worth your time and what isn't? 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 chunks.
Although the ideas discussed in this article seems to be generic, sales laws applies to any loan of sales and marketing business, whether you are a loan officer, real estate agent or an insurance agent, if you master the 5 marketing ideas below you will increase your mortgage business drastically over the next few months.
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:
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.
Google, Yelp & Facebook review - Believe it or not a big percentage of clients will make a decision whether to call you or call the next loan officer based on the number of stars you have.
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 sign for a home loan with you. 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. So don’t try to be the jack of all trades, focus on 1-3 programs and present yourself to the market and the specialists in these loan programs.
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 a 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 getting a loan from them or referring people to them later. Obviously it's not a guarantee to success, but it does increase chances of success.
5. Stories and Experiences, Not Things and Benefits
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.
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.
Now You Are Equipped
You now have the tools that you need to put into practice to become the best salesperson, marketer, entrepreneur, etc. Although this is not an exhaustive list of all sales & marketing techniques, if you get these right the others are insignificant. Actually, many successful marketers and salespeople use just one or two of these ideas really well.
My challenge to you is to start with one. Think of examples of how you can implement one. Try one per week or one per month and get really good at it, then move on to the next.
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