Interview with a Winner:
Tom Bass
South Pacific Financial Corporation, Rancho Cucamonga,CA
2005 Origination Volume: $112 million (430 units)
2005 Average Loan Amount: $284,592
Software: Goldmine (CRM), Mortgage IQ (new enhanced software), CalyxPoint (processing), DataTrac (back end system), Mortgage Coach and Mortgage Market Guide
Referral Source Mix: 100% engaged relationships. This breaks down into 35% Realtors and financial planners, 65% past client referrals and client retention.
In Touch Today: How did you get started in the mortgage business?
Tom Bass: When I was a college sophomore I noticed that graduating seniors were having a hard time finding jobs – and the jobs they did find didn’t earn them more than $30,000 to $35,000 per year. My brother-in-law, Tim Cahill, owned a mortgage company. I basically walked out of a class in western civilization and asked him if he would hire me on 100% commission in the mortgage business. I was 19 years old, and I never looked back
I had two jobs for the first six or seven months of my career. I was a waiter in the evenings and I focused on the mortgage business during the day until I got to the point where I was able to transition to full-time. I’ve been in the mortgage business for 19 years.
In Touch Today: Were you an immediate success?
Tom: I was an immediate success. I was blessed with a really strong work ethic at a very young age. I was willing to put in the amount of hours required to be successful. I was young, and willing to outwork my competition. I was willing to do the things that other people were unwilling to do at that time. I worked late nights; I worked Saturdays and Sundays. I went to open houses to meet with real estate agents.
In Touch Today: What mistakes do you think rookie loan officers typically make?
Tom: The mistake that I most often see rookies make is trying to engage in every referral relationship. For example, if they meet a Realtor, they assume (without knowing any of the Realtor’s background) that they should work with that Realtor. This is a mistake because it is important to choose your referral relationships carefully. You need to find people who are like-minded, who have the same work ethic, and who have the same integrity as you do. They need to have the same desire to provide a certain element of customer service that you do.
The next mistake that I see rookies make is worrying so much about the next lead and the next loan that they do not take the time to make a raving fan out of their current client. More importantly, they don't understand the lifetime value of a client. Once they do the home loan, they end the relationship and move on to the next one. They need to realize that providing world-class service is not enough. They need to maintain each client relationship in order to receive referrals from the client and repeat business as well.
In Touch Today: What three things can a loan officer do to create a raving fan out of each and every client?
Tom: First, understand the client’s needs, both short and long-term. For an example, the loan officer needs to ask these questions: “Do you have a living trust? Do you have a financial plan? Are you preparing for the long-term and short-term and immediately, retirement? Do you have an emergency fund established?” The answers from most of their clients will be “No.” Most clients think services like that are only for the wealthy and the affluent. While in truth, those services are most suitable for the average person - who really needs them more than the wealthy and the affluent.
Second, they should identify the gaps in their client’s financial plan. And third, they should strive to become a solution provider for those needs. For example, if my client does not have a living trust, and they don't already have somebody that they can go to for that, I'll refer them to my estate attorney. If they don't have a financial planner, I'll refer them to my financial planner. This is just part of creating those reciprocating relationships.
In Touch Today: What mistakes do you think veteran loan officers typically make?
Tom: Veteran loan officers have to be very careful about becoming complacent. It’s important to be a lifetime learner. The market conditions change so fast and so dramatically. If you don’t stay on top of your game, a rookie will come by and take your market share away from you. Veterans also need to be aware that marketing strategies of the past don’t always work out today. If they don't transition from simply marketing to their clients to having engaged relationships with their clients, they're going to realize they no longer have them as clients.
Competition in this business is fierce. A good friend of mine, Tom Ferry, who has a very successful training company for Realtors, told me that the most recent statistical data shows that there are 2.7 million licensed Realtors in the United States. That equates to one person in every 15 households working as a Realtor. There is probably a similar statistic for the number of loan officers.
I'm constantly investing in my business and working towards change. I go to many seminars and training events. I’ve seen a common thread throughout highly successful loan officers: They are all coached and/or mentored by somebody. You’re never too old, or too experienced, to stop learning from those who do things differently or more successfully than you do.
In Touch Today: What do you think separates you from the average loan officer?
Tom: My passion to engage in relationships is what separates me from the average loan officer. In other words, I want to know my client's needs. I want to provide solutions. I want to follow-up. And I want to maintain every one of those relationships from a Realtor perspective, a financial planning perspective, and a mortgage client perspective.
I recently heard a great quote: “The loan officer with the most friends wins.” Success in this business is about developing deep friendship relationships. Our entire database system is built around creating word-class service, meeting our client's needs, and continuing to maintain and engage in those relationships.
I try to create a well-balanced life. If one part of your life is unbalanced, it's going to take away from another part of your life. For example, if I'm having problems at home, I can never be fully focused and successful at work because it's going to take me away from that. I think a veteran top producer learns over time that it's very important to have a well-balanced life in all areas.
In Touch Today: How do you maintain a well-balanced life?
Tom: As a loan officer, you are only as good as your team. Without a successful team around you, it's very difficult to have a well-balanced life. I'm only as good as my senior processor. I'm only as good as my strategic partner. I think the team is that key element.
In Touch Today: If you had a son or daughter entering this business, what advice would you give to him or her?
Tom: Build your business one client at a time. I know that sounds kind of elementary, but it’s so vital. You need to be more concerned about the relationship that's in front of you than the next relationship you're trying to find. If you take care of the relationship that's in front of you, over a period of time your business will grow exponentially because you have created raving fans of your service and your business.
Find a coach. And build a database. Maintain your personal drive. If you have personal drive, you’re coached or mentored, you’ve built a database, and you’re turning every client into a raving fan through world-class service, you will be successful in the mortgage business.
In Touch Today: What was your most successful marketing campaign?
Tom: We set up a targeting system that sends out a series of items of value to the targeted relationship before we go to make an outbound phone call. It is called a 15 x 15 campaign. On the 15 th day of the campaign, when I go make phone call to them, that Realtor has received items of professional value that will help their business grow. They know who I am because of the marketing pieces that they have received. The types of helpful items we send include books, articles, etc. We’ll also include professional, high-gloss flyers with motivational or inspirational information on them. They have my name, photo and contact info as well.
We also show Realtors and Financial Planners how we can help their business grow to the next level by becoming true business partners. I'm constantly coming up with lead generation ideas, team-building ideas, database marketing ideas, and past client ideas for my Realtors and Financial Planners to use to make their businesses more successful. If their business grows and becomes more successful, my business will grow and become more successful as a result.
In Touch Today: Do you have any turnkey sales or marketing ideas that you could share that you've used to help you build your raving fan relationships?
Tom: I believe there are three areas of marketing and importance in a “Client for Life” system. There is image marketing, value added marketing, and emotional marketing. The problem is that most people spend 95% of their budget on image marketing. And that yields them the least return on their customer retention or customer engagement strategy.
We believe in emotional and value added marketing. An example of emotional marketing would be the birthday cards we send to all of our past clients on their birthdays. More importantly, we actually take the time to put a hand-written note inside of each birthday card. We also call every one of our clients and wish them "Happy Birthday" on the day of their birthday. This lets them know that we care about them and want to continue our relationship. We also send out Thanksgiving cards and thank them for our relationship. Each January we send out HUD1 closing statement for their records.
We conduct value-added events quarterly. Topics have included equity, strategic equity repositioning, and equity management. We'll have financial planners come in for financial planning seminars. We'll have an estate planner come in to talk about trusts versus wills.
At the end of each year, in December, we rent out a movie theater and show the latest Disney animated film. We've done that for nine years. We usually have 450 to 550 people show up to the event. It's a great opportunity to get a chance to sneak in front of everybody for about five or seven minutes, shake hands or throw hugs around. We also have Santa Claus show up.
In Touch Today: How much does an event like that cost you?
Tom: It's about a $4,000 event when it's all said and done. But you've got to realize that you're spending $4,000 for the opportunity to impact 120 or so families. If I get a chance to shake the hands and hug 125 of my clients every single year for $4,000, I would do it all day long. Especially when the market conditions change and there's a refinance opportunity. You could end up refinancing 120 of those clients in three months all because of your engaged strategy.
In Touch Today: Who or what has been the biggest contributor to your success?
Tom: Building a highly successful team is the number one key to my success. You can do five or seven loans a month by yourself, but if you ever want to become a top producer, you need a team – and they need to be the right team. Are they focused on super service versus trying to become superstars? That's a key element. We want to be super servers around here. We don't want to be superstars.
I too often see loan officers hire the wrong first person. The first person a loan officer should ever hire is his or her own personalized senior processor. If you have your own highly competent personalized senior processor, he or she can usually handle all of the processing and really free up your schedule.
I currently have five people on my team. I have two senior processors who handle the processing of our loans. I have two people who handle the past client day to day relationships, and I have a production partner who helps me with my Realtor and financial planning relationships.
The team is going to grow when market conditions allow, and dwindle when market conditions are poor. It’s important to know who to bring on, when to bring that person on, and who to take off the team when it needs to be done. I think it's important that you continue to have a pure team.
In Touch Today: If you had a magic wand, what would you change about your current business?
Tom: Right now I think it's important for a top producer to bring certainty in an uncertain market. The only way they're going to bring certainty in an uncertain market is if they're very clear about their daily action plan. Every team member needs to be very clear about the role they play. Everybody needs to be very clear about the daily, weekly and monthly goals. So in today's business, what does that mean? It means the producer needs to stay focused on lead generation, lead conversion, and relationship retention while the team does all the other reactive activities.
In Touch Today: What are your current goals?
Tom: Over the past four years, I’ve realized a few things. With production levels being as high as they were, we weren't able to go as deep into some of our relationships as we should have done because we were so busy handling the volume of business coming through. So for 2007 we are going to go back through every one of our relationships to determine if they still engaged with us or if we have lost their relationship. It's going to be more important for us to know how many engaged relationships we have versus how many names we have in the database in 2007.
I believe that some time in the next nine to twelve months we're going to have another substantial refinance opportunity. I really feel the market's going to have a certain amount of correction. We've created a separate grouping in our database that contains clients in our rate watch. Every conversation we're having right now with our clients includes letting them know that somewhere in the next nine to twelve months we feel there's going to be a refinance opportunity and for them to be prepared for our phone call. When that does happen, they need to be in a position to react quickly because we're not sure how long that window of opportunity is going to last.
In Touch Today: Why do you think that there is going to be another refinance boom?
Tom: Because the Federal Reserve rate and short-term interest rate has risen 17 straight times. If you look back historically, 100% of the incidences where the feds have raised more than four consecutive times have resulted in an “overcooked economy.” This means that they were too aggressive in their decisions. I'm looking at the data and I really feel that obviously we're going to feel the ramifications of 17 straight rate hikes sometime in the next nine months.
In Touch Today: Is there anything else you’d like to say to other originators who aspire to the kind of success that you have created?
Tom: There is an ethical responsibility that needs to be put back into our industry. The mortgage is the largest financial decision that a consumer is ever going to make. We can either enhance somebody's retirement or we can drastically take away somebody's future retirement through selection of that mortgage. I believe we have an ethical responsibility to do what's right for our client versus being self-centered and focused on our personal prosperity.
Originators need to realize that our clients are not buying a washer and dryer. Giving wrong counsel and giving misguided information can cost our clients thousands of dollars, not hundreds of dollars. The unethical practices that I continue to see in our industry are very sad.
I heard a great quote a long time ago: “You can sheer a sheep for life or you can skin him once.” People need to take to heart that taking care of a client will give you a client for life. If you “skin” your client, you're not doing yourself any favor for the future, and you're doing your client a disservice.
I’d like to add that I have a training company that focuses on helping originators build reciprocating relationships and client for life databases. If any readers are interested in more information, please feel free to visit the website or email me and I can share with you more about the training that we do. The website is www.targetingagents.com. You can email me at info@targetingagents.com. I’m available by phone, 1-800-498-9111, as well. I’d love to hear from the readers.