Differentiation…Steps to Setting Yourself Apart From the Competition
By Mike Baker
A potential borrower asks, "Why should I do business with you?" A potential referral based client ask, "Why should I refer business to you?" What's your answer? Separating yourself from the average loan officer will make a huge difference in how they view you and it's the difference between you getting the business or not.
How are you different? What have you done to make yourself more authoritative, credible, and compelling than all those other lenders out there? When a borrower calls you and is shopping interest rates for a new loan, how are you different from the other calls that they made to other lenders?
The differences I'm talking about don't have to be huge differences. Many times they are very small differences that cause someone to do business with you versus someone else. Or they might do business with someone else and not you. In this competitive environment, you have to educate and differentiate! Here are three ways to do that:
Number One
If a borrower is rate shopping you.
The first opportunity presents itself the second they ask you what your rates are.
You simply ask a question that short circuits their mental reflexes. You want to psychologically knock them off the "rates and fees" track. You need to buy time to establish yourself as an Trusted Advisor. But it can't be a question that makes them think you are about to sell them. In fact, if you can make it sound like you are going to give them more than they initially requested, that is even better.
So ask, "Did you want the lowest interest rate or the lowest total cost?"
They don't have a reflex response for that question. Their mind will start trying to figure it out. They will be confused because they sound like the same thing. What ever they say gives you the space you need to educate and establish yourself as more knowledgeable than other lenders.
Of course you are still going to get the hard-case rate shoppers. But this approach (or one like it) will open more minds faster and let you get a toe-hold with the customer.
Number Two
Most loan officers leave out the most powerful questions that create Instant Credibility. Or what I call ADVISOR LEVEL or GAP questions. This question can create Instant Credibility.
"How old do you want to be when your home is paid off?" (Usually the answer is between 50 and 60 years old.)
And then: "How old are you going to be based on your current situation?" (Usually 10 + years longer then they answered with the first question.)
The key to developing instant credibility is to differentiate yourself by asking different questions and providing advice that typical loan officers don't offer. The questions you ask and the solutions you present are the key to becoming a Trusted Advisor. Most homeowners just want to make sure they have the smartest and most cost effective debt structure. By asking and answering these questions you will gain credibility because as you explain the Power Shift, your prospects will see that you have extraordinary knowledge and because you are offering added information that other loan officers haven't in the past they will perceive that you have there best interest in mind. As I have mentioned in both Total Cost Selling and The Art of Referrals "trust and credibility" are the foundation of being perceived a Trusted Advisor.
Number Three
When you hit the question about how long they will be in the home, tell them how important that question is. Tell them how most homeowners and lenders only focus on the rates and fees and end up paying more than they have to. And then start educating.
"Yes, interest rates are very important, but they are not the whole picture. They don't always reveal the true, lowest total cost of the loan. Few people realize that how long they plan to live in the home can have a dramatic impact on how much they pay. What a shame it is that more homeowners don't comprehend this and more lenders don't t tell them. They lose thousands of dollars while thinking they got the best deal. In fact, in Sunday's Register they did an article on this very fact."
You have the idea. Open a small crevice in the prospect's mind and then begin to wedge it open wider and wider by revealing facts and information that they have never heard before and which can have a major impact on their finances.
A warning… or you could say CAUTION!
I've heard a few of you start right off with something to the effect of, "I can do a total cost analysis…"
Right thought… wrong timing. As lenders, we know what we mean by "total cost analysis," but to the client, that doesn't mean a thing because they don't understand what it means yet. Total cost is a concept that you need to educate people on before the words have any meaning to them.
We need to be more careful that the client doesn't get the idea that the "lowest total cost" means the lowest interest rate.
Commit and make it happen. Fate, destiny, or luck: whatever you call it, hard work, the right strategy, the right tools, and consistent desire and implementation must come first. They say the hardest workers are the luckiest. No matter what some speakers and trainers tell you, becoming a top performer comes with many challenges and if it were easy everybody would be doing it. Just being smart and having a "cutting edge" strategy is not enough. While it is great to have cutting edge strategies, the key is to work on and perfect those strategies until you get the results you are looking for.
Mike Baker, V.P. of Business Development at The Mortgage Coach
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