I think one of the greatest things that we can do as mortgage professionals and real estate agents is really work together to tighten up how we make money. In this video, I go through something I like to call The Lost Leads Conversation, which will help you add value to your customers.
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We make money by adding value. We make money by creating world-class customer experiences. We make money by following up. But we also make money by following up accurately, consistently and decisively.
One of the things that I think is very interesting, particularly from the angle of the lenders working with business professionals. It could be a real estate agent, a financial planner, anybody.
Let’s use real estate agents, and let me teach you something that I learned very early in my career, and you could master this in about one hour just by role playing it with yourself and seeing how you come up with the numbers, and then you will have a value proposition that will be second to none.
I have a client right now that I’ve been coaching for probably the better part of 10 years, and this year he will refer $2 million in real estate commissions back to his real estate partners, not because of what they do, but because of what he does for them.
Early on, I learned that you have to be able to give 10x value. I learned this in 1980, 10x value. Way before 10x even came out, I was asking, how do you add 10 times the value compared to what you are going to receive? And I give my mentor, John Barnes, that credit because John said, “If you’re looking for $1,000 commission from a real estate agent, give ’em $10,000 worth of income.” And I scratched my head and I went, “How do you do that?” And he goes, “It’s really simple. You gotta find out how many leads they’re losing that they could be getting.”
Years later, my friend Ron, one of the top mortgage professionals ever, coined this “the lost leads conversation,” and it goes like this. Somewhere in my early conversations with a real estate agent … And again, this can work for anybody. I simply ask the question, like, “How much business did you do last year? How many transaction sides did you do as a real estate agent last year?” And let’s say the agent says, “50.” Okay? My next question is, “How many people did you have to talk to to get 50 transactions closed?” And let’s say they say, “300.” Well, I automatically know there’s 250 people that right now haven’t used that real estate agent. So I go back and I say, “So, of the 250 that remain, do you think any of them might have used you if you had a different value proposition and/or a different followup system?” And 100% of the time, the answer is yes. And so we look at that and we go, “Okay. This is pretty cool.”
And so then I ask, “What percentage of those people do you think might have used you that did not?” And I usually look for a 10 to 15% response. That’s usually what we get, so let’s just use 10%. So there’s 250 people that didn’t use you. If 10% of them did, that’d be 25 more sides. You’d go from 50 to 75. So then I can either use my market knowledge to come up with a commission per side, or I can simply ask, “How much do you make per side closed?” And let’s just use for simplicity, uh, $10,000. “So what I’m hearing you say, Mr. or Mrs. Real Estate Agent, is that if we could work together to tighten up our followup, add more value, and be more consistent with how we keep those people nurtured, you could probably do another 25 transactions or make an extra quarter of a million dollars. Would you like to discuss a strategy on how to make that happen?” And the answer is always yes.
And so when you really think about this, and you think about how valuable you are in the market, and you really think about, like, what am I doing to really get the word out that when you work with me, I help you win financially, financial wins provide emotional security and stability.
The same is true with borrowers. Borrowers need financial wins. They need financial management. They’re stressed out financially. They need that, and you’ve gotta provide it. But in this context with the lost leads conversation, what we should be thinking about is we go to the market on behalf of our clients and/or with them in a co-branded way, and we pull business out of the market. We nurture, we develop, we get into deep relationships, like who has the greatest influence. For example, if a real estate agent refers me to somebody that has 200 people in his or her department, I wanna be able to help that agent get into those 200 people and get that business.
Keep the Lost Leads Conversation in mind. Just watch this again 100 times, role play it as you go through it, and try it. You can’t lose. How many deals did you close? How many people did you talk to? Do you think any of them would have used you? What percentage? How much do you make per deal? Boom. There’s the money. All right? Take care.