Interview with a Winner:
Tom Bass
Speaks Out on Creating a Blockbuster Origination Business
TOM BASS, South Pacific Financial Corporation, Upland, CA
2000 Volume: 190 units
1999 Volume: 280 units
1998 Volume: 432
Average Loan Amount: $155,000
Software: Goldmine - database. Point - processing.
Boni Lonnsburry: Tom, how did you get started in the mortgage industry?
Tom Bass: I've been in the mortgage industry now for 11 years. This is the only profession that I know. I had a brother-in-law who owned a mortgage company so I simply asked him if he would hire me as a loan officer on a 100 percent commission with no base salary. I waited tables at night to supplement my income.
It was "old school training" where you were given a three-day crash course in the mortgage business, a territory that the other loan officers didn't want and the speech "go get em tiger". I was about 19 or 20.
Boni: How long did it take you to before you "got it"?
Tom: I worked 7 or 8 years under the old school, the dinosaur way of doing business. Unfortunately I think that is the way most loan officers do it today. There is a big difference between looking at the client as a client for a lifetime versus at looking at a client as a one-time opportunity.
It's a different approach to create clients where they become an annuity income versus a one-time deal. It takes a different mindset to build relationships with referral sources where you provide such a phenomenal service to them and to their clients, that they have a compelling desire to refer clients because the clients that they refer to you are just so enthralled with how great a service you provide them that they are calling back that referral source thanking them for sending them to you. It takes a different theory and approach to build a "client for life mentality".
Boni: Do you think that a loan officer starting out and working under this kind of system and mind set would have a much better chance at achieving some solid success faster?
Tom: I truly believe I lost years of my life by not knowing what it took sooner. I look back and I ask myself today, man if I only would've known what I know now. The amount of past client data that I lost during seven years of business of not keeping in contact with those people is incredible. I would have had probably another thousand more people that I would have built a referring relationship with that I have lost because of not understanding the client for life mentality.
Boni: And who know what that could have become.
Tom: Well I know that an average client in a referred relationship on an annuity environment over a 5-year period of time is worth about $10,000 of income per that client. So if I lost 1000 clients it doesn't take long to realize I potentially lost a million dollars worth of revenue. That hurts. Unfortunately I think 90% of the loan officers today still haven't made that conversion - so every time they close a home loan they make maybe $1,000 - $2,000, but they are losing $8,000 per transaction by not working further on building that referral relationship.
Boni: Those are sobering statistics. Tell us a little bit about your referral sources.
Tom: I would say that my main source of referral source besides my current and past client is realtors. I really don't do business with builders and I really don't any business with CPA's or financial planners. I have chosen to go the real estate route. When I go out to target a real estate agent, I'm not looking at some one's production level, as I'm looking at who can I find out there who shares the same core values and similar belief systems.
Because I have built my business structure based upon core values and family values, if I bring on a real estate agent who doesn't believe in the same core values as I do, their business and my business are going to conflict with each other. If I have an agent who doesn't understand why I don't work on weekends, and that my family is more important to me, if they can't respect that, then they are going to be calling me all weekend long and the only be disappointed with my system and with my company.
When I interview to find a real estate agent, I'm looking at only five areas.
1. What are their family values?
2. What are their business values?
3. Do they have a desire to increase their business?
4. Do they believe in a referral environment system?
5. Do they have a desire to build clients for life?
If they don't realistically have three of those five, I will not engage in a relationship. Because my business is based upon a referral situation where a raving fan or a satisfied client will always supercede profitability, I don't work well with a real estate agent who just wants to throw them into escrow.
If they say, "Tom, hurry up and close this before they change their mind," they won't work well in my system. Unfortunately there are a lot of agents out there who are like that.
How do I get my real estate agents? I get most of my real estate agents by my core agents referring me to other real estate agents. It is very unlikely that I will go out on a real estate interview unless that person has been referred to me by one of my current colleagues in the real estate business.
Boni: And how do you take care of your realtors?
Tom: I take care of them in two or three main ways. One is providing what I classify as world-class service to them and to their clients. Secondly, I spend a tremendous amount of my time doing what I call business partnership relationships. I do a lot of business partnering with them and helping them take their business to a greater level.
I help them build a data base system, help them build a marketing system and help them build efficiencies inside their system. I try to get highly involved in their business helping them understand goals and helping them understand visions. It's not uncommon for me and my agents to go to different types of seminars together. That way, we have topics that we can discuss over the next couple of months as we implement what we learned. I try to be highly involved in their business success.
Boni: You obviously spend a lot of time interacting with your agents. How many do you work with?
Tom: I break them down into three categories. I have my "A" group or my core group of real estate agents. That core group of real estate agents I have both a deep business relationship with and deep friendship with. There are about eight.
Then I have about 12 real estate agents who I classify as loyal agents and that we are building relationships with. They refer pretty much 100% of their business to me but we are still building a level of intimacy. I have about ten more agents that I classify as "C" agents who refer business to me, but don't yet refer all their business to me.
And then I have about 30 more agents whom I prospect. I keep in touch with them by marketing to them and every once in a while giving them a call. They are future prospects that I would love to move into the "A" category.
Boni: Let me ask you what mistake do you most often see rookie loan officers make?
Tom: I would say that a rookie loan officer is more worried about generating the next lead than taking care of their current lead. If they would take on the concept that if they take care of their current lead with the most incredible amount of service, that lead will bring on their next opportunity. And if they take care of that opportunity, that opportunity will multiply to the next one.
And I think the same goes with real estate agents. I think new originators spend more time trying to prospect a cold realtor. If they could hone in on one or two realtors, help those people take their business to the next level and then use that realtor as a referral source, they could skyrocket their business.
Boni: Do you think veteran loan officers make the same mistakes or are their mistakes different?
Tom: I think veteran loan officers are challenged with complacency. They also make the mistake of going after real estate agents based upon volume versus core values. They constantly have conflicts in their system and don't understand why. They create conflicts based on integrity issues. I am a strong believer that like-minded people hang out with like-minded people.
I think veteran LO's also become stagnant because their goals have not become clear, their vision has become muddled, and they're not trying to grow to become bigger and better.
Boni: Tom, if you could change one thing about your professional life what would that be?
Tom: I would like to be out of daily operations. I want to be in an environment where I spend 90% of my time motivating and inspiring the referral source versus having to do maybe lead conversion or daily operations.
I spend a lot of time understanding what I love to do and understanding what my purpose is and what my unique ability is. There is one thing I am constantly trying to work on or change is how do I spend 90% of my working day in that area versus the daily to do's - tasks that I feel are not profitable but that have to get done. I need to continue to delegate them out to team members.
Boni: Where would you like to see your business in five years?
Tom: I have a very clear-cut five year goal - I want to be in a position where I have freedom of choice of my time. Now what that freedom means to me is that I am able to elect and choose whatever I feel is my greatest opportunity at that time. Freedom of choice of time says you know what if I want to be coach of my son's baseball team I want to have the ability to do that. If that means I want to crank out production to levels where we are doing 5, 6, 7 hundred units a year, I want the ability to do that.
Boni: What or who has been the biggest contributor to your success if you had to isolate it to one thing?
Tom: I would have to say the teaching and the philosophy of Todd Duncan.
Boni: You attended many of his seminars?
Tom: Yes and personally coached by him.
Boni: If you had a son or a daughter entering this business, what advice would you give them?
Tom: It would be to stick with your core values. Determine your principles, determine what you stand for. Create in your mind the kind of client you want to work with and don't waver from that. Jim McMahon gave a great quote about five years ago that said "There are enough people out there that will work your way."
I would encourage my son or my daughter to determine what is "your way". Determine what that is and be patient, don't waver from that. Through hard work and diligence you will attract those types of people. And over time you will build your business upon a strong foundation versus a loan officer who's only as good as his last loan.
Boni: What was your most successful marketing campaign?
Tom: I can't say that there has been one successful marketing campaign. I think what it comes down to, with both real estate agents and past clients, is consistency. The key is coupling consistency with professionalism that creates name recognition
Boni: How often do you contact your past customers?
Tom: Sixteen times a year. Postcards, quarterly market updates, birthdays. Two times a year we do special events where I invite my past clients to a baseball game or a movie. My VIP's (my greatest past clients), I send a special book to along with a card. My ravings fans (the next level) I send dinner gift certificates.
Boni: So you market to each of them differently?
Tom: I do, because 80% of referrals come from only 20% of your database. Why would you treat the 80% that is not referring and the 20% that is the same way? I think it is important that we make the people who are our VIP's and our raving fans feel very special.
Boni: But you contact all of them 16 times a year, just different types of contact?
Tom: Yes. They will receive e-mail once a month. We do use voice broadcast. They probably receive four messages of voice broadcast a year. That's more pertaining to hey, this is Tom, wanted to wish you happy Fourth of July, hey this is Tom, I wanted to wish you Happy Thanksgiving.
Boni: So it is not sales oriented?
Tom: No, never. It is driven more towards intimacy.
Boni: I think every loan officer struggles with fluctuating volume. How do you handle the busy times?
Tom: When you have an opportunity like the recent refi market, you need to realize that 'tis the season. First thing I did with last January, was to gather my entire staff for a meeting. I said, "Events in life happen only so often, and the difference between a champion and somebody who is not a champion is that when that opportunity comes around, the champion maximizes that opportunity. We are going to maximize this opportunity so you need to let your spouses know, you need to let everyone know, we are going to be putting in some hours. We have the ability to make the income in one year that would normally take two to three years, lets work incredibly."
You also have to become very, very selective upon what leads you are talking to. And for us, a past client is our number one phone call we take care of. Now we even categorize that a little bit. Say we have three past clients who call in at the same time, who do you call back first? You are going to look at who has the maximum opportunity. You want to pick the most motivated prospect there. And if one person is saving $200 and one is saving $50, I'm going to call the person who is saving $200 because the probability of the conversion is greater than the other one. You prioritize your past clients phone calls.
Then the next step is to make sure you take care of your realtor leads. Then you take care of your past client referrals. And then if you have any time left over, then you take phone calls coming in that you are not sure where it came from. That fourth category, or that phone call that we have coming in that we are not real sure of, we spend very little time on. Again it is just prioritizing that situation.
Boni: Is there anything else you would like to share with the nation's originators?
Tom: Only that the wheel of success is already created. They don't need to go out and spend time trying to create it. What they need to do is visit mortgage companies that have already created the wheel of success. They can go in and spend a day, spend some time with that loan officer, and be able to go back and right away implement it versus spend seven years trying to create it.
Boni: That's a great piece of advice.
Tom: If I were a brand new officer, I would visit the top four loan officers who have the same core values as I do. I would spend a day with each one of them; spending whatever money it took to do that. I would come out of those four visits five years ahead of any one else who is trying to create success based upon the street of hard knocks.