Interview with a Winner:
Randy Keiberlein
"Don't worry about how much money you are going to make. The money will
follow once you have a mission and guiding principles."
Randy Keberlein, Mortgage Icon, LLC, Lake Geneva, WI
2002 Origination Volume: $53 million
2002 Average loan amount: $147, 000
Software: ACT, Loan Handler, and USI SYNCMaster
Boni Lonnsburry: What is your referral source mix?
Randy Keberlein: 70% past client and referral, 25% real estate agents, and 5% non-specific.
Boni: With 70% of your business coming from past clients, you must have done a great job keeping in contact with them.
Randy: We made a decision, a few years back, to purchase ACT software to do just that. I've been originating for 16 years and prior to purchasing ACT, I honestly didn't keep up with my past clients. I still have people from the early period who have had to track me down.
Boni: How did you get started in the business?
Randy: I bought a house. The person who did my loan made quite an impression on me. I thought mortgage origination was a numbers-type job, and I've always been pretty mathematically astute. I didn't really know what I wanted to do as a career, so I made the decision to actively pursue a job in the mortgage business.
Boni: You say you "thought" it was a numbers job? Do you still think it is?
Randy: No. It's a sales job, a people job, and a relationship-managing job.
Boni: Were you an immediate success when you entered the business?
Randy: I had recently married, bought a house, had my first baby, and was able to feed my family, so I thought I was successful. I came to realize that no, I was not an immediate success because I had no vision or purpose for what I was doing.
Boni: What mistake do you most often see rookie loan officers making?
Randy: The people who are starting right now think this job is easy. With the interest rate environment like it is, it's not difficult to do loans. So new loan officers are not setting up business plans and actively arranging their lives in ways that will enable them to survive the inevitable shift in the market when it takes place.
Boni: When you were a rookie, what mistake did you make?
Randy: 16 years ago, there weren't a whole lot of computers out there. I was doing my work by hand and on a typewriter. Also, I always saw it as lucky to get a loan, and great to get it closed and move on to the next one. I didn't see each client as a source of loans in the future, or recognize that the average length of a mortgage is only five years. I looked at my clients as transactions, not as relationships. That was by far the biggest mistake I made.
Boni: What mistake do you see veteran loan officers making?
Randy: They don't embrace technology, databases, and the Internet as a tool. Someone who has been in the business for as long as I have might have problems with a technological transition. I still know guys who hand write applications and don't know how to leverage automated underwriting aspects or database maintenance. They still meet with people before they find out whether or not they can get approved, rather than getting a pre-approval and then telling the client what documentation is needed to process their loan.
Boni: Tell me about your ACT database. What kinds of automations have you set up?
Randy: It will automatically send out change in status emails. It also automatically sends out a weekly status report email. We have it set up to help us on our after market campaign as well. We've begun farming our database of about 4000 names, so we use it as a contact management tool. It also prompts us to call our clients with their annual mortgage reviews. It's still a work in progress, and probably will be until I change careers.
Boni: Do you keep in contact other ways as well?
Randy: We send out a quarterly newsletter and a HUD (for tax purposes) for all purchases at the beginning of the year. I'm still looking for other ways to effectively communicate with past clients. Our goal is to make six to eight touches per year. I'd like to keep in contact "enough" but not so much that we're "stalking" them. I don't want to over do it.
You have to make contact of some kind. Not all clients realize, without a little encouragement, that calling on us again is a good thing. I had a client who was actually embarrassed that he was calling me again. I had to explain to him that we love it when our clients come back to us. I could understand his logic, so I started telling people that we want their business, over and over again.
Boni: If you had a son or daughter entering this business, what advice would you give them?
Randy: You have to be prepared to handle the business before you get the business. By that I mean you have to know how you want to handle the business you get. You have to pick a direction. Are you going to be a value leader, a price leader, what is your purpose in this business? You need to focus on what you want to be good at and constantly try to get better at it.
I don't do B-C loans; I farm those out to a specialist. I will do some FHA loans, but only if they are DQ or LT approved. I have a pretty strict definition of what a loan is. I think that's the only way to be successful; define what it is that you are going to be good at, and then be good at it.
Boni: How would you tell them to be good at it?
Randy: I think Todd Duncan once said, "Success leaves clues." I don't think I've had an original idea in 20 years. I just try to find out what other successful people are doing and then follow them. But that won't help you choose a niche. A lot of originators choose first time homebuyers, but I don't get that specific. I want to do loans that I can do well, and it's easy to divide them by credit score.
To reiterate, I would model myself after successful people. I would set aside time each week to learn my craft, and be disciplined about doing those two things. First and foremost, I would be honest and intelligent about how I do my job. Telling a series of half-truths and lies won't help you to be successful.
Boni: What was your most successful marketing campaign?
Randy: I'm in the middle of it right now. We took our marketing budget and eliminated all our advertising. Then we set up a series of letters to target top producing real estate agents. The first letter contains a $25 gift certificate to Barnes and Noble. Other letters in the series come with gifts as well (a copy of a Tim Braheem interview, a leather PDA holder). There are eight letters total, three with gifts. Once we've sent out the letters, we follow up with a phone call and a well thought out sales script and service package.
I sent letters out to 49 different people, and have been able to reach about 11 by phone so far. They've all taken my calls. I've met with nine of them, and I think seven of them have agreed to pursue a business relationship. If you break it down, we've gotten leads from 22.5% of the agents we've marketed to with this campaign, and it's only been about eight weeks since we initiated it.
I think the free gifts made the agents feel like they had to talk to me. Mr. Duncan calls it "the law of reciprocity." It really works. I'm actually planning on repeating the campaign with a new list of prospects.
I'm not sending the letters to "pop tart" agents (the ones who will pop right up when someone comes in and take them to see a house without taking them through any process first). Everyone that I'm picking did at least 55 transactions last year. Their sales range from about $7 million to $30 million in real estate. I have a meeting next week with an agent who sold $33 million in real estate last year alone. I'm really excited about it.
Boni: Who or what was the biggest contributor to your success?
Randy: I've been blessed to bump into a lot of intelligent people in this business. I've seen Todd Duncan a number of times, but I don't think the light actually came on for me until about two years ago. In June of 2001, the second or third time I'd seen Todd, it just clicked and made sense to me.
We've been reconfiguring our company. We've been through a merger and have let some people go because they wouldn't do business our way. I'm the president of the company but I also originate. I got back into doing a lot of originating in May of 2002.
Boni: If you had a magic wand, what would you change about your current business?
Randy: I'd rather have my business more level. Maybe 60% purchase business and 40% refinance. I'm actually looking forward to a rising interest rate market because I think there is a huge opportunity in it - it just sets you up for the next rate drop.
Boni: What are your current goals?
Randy: I'd like to be doing $300 million dollars a year with my team. I guess I want to be considered one of the best at this job. I take great pride in it.
Boni: Is there any other information or advice you'd like to leave for others who aspire to the kind of success that you've created?
Randy: The biggest thing is, "You have to begin with the end in mind." You have to know where you want to end up before you start peddling towards your destination. Take some time and figure out who you want to be, what you want to be, and what you want your business and your life to look like. Then aspire to it. Don't worry about how much money you are going to make. The money will follow once you have a mission and guiding principles.