Referrals are the bread and butter of the mortgage industry—and for good reason. When the product you’re selling is a 100k-plus lifetime commitment, it helps to start establishing trust before even the first phone call. That’s where your referral partners come in.
“Referral partner” is marketing code for “non-competing professional who passes on prospective leads.” You’ll also see referral source used interchangeably. When you get right down to it, though, this is just a professional relationship like many you probably already have.
If you’re looking to move away from paid leads and create a self-sustaining system of business, you’re in the right place. This guide will help you win, keep, and make the most out of your referral relationships.
Customers aren’t referral partners
Many sources of advice harp on the benefits of pumping your customers for referrals or doing such a good job that leads come to you through “word of mouth.” Plenty of sales professionals follow this advice and end up doing pretty okay.
But for the best sales professionals, “pretty okay” doesn’t cut it for very long.
That’s because depending on happy customers to pass your name on is a very passive approach to sales. You may need to do some work to convince a customer to stick around, but for the most part, they’re coming to you.
There are two main reasons that this isn’t the best strategy:
- It’s not your clients’ business to know people who need mortgages. Sure, they may have a friend buying a house, or a cousin a few years down the line, but they’re probably not coming into contact with a steady stream of potential homebuyers day after day. That means they’re not nearly as valuable as a realtor who is—and who can recommend those people to you.
- Handling your clients’ mortgages well is your job, not a favor. Building a referral relationship is all about finding ways to help each other succeed. But you’re not really helping a client out—you’re providing a service and getting paid for your time. A client never owes you anything but money. After a certain point, effort put into the customer also has diminishing returns. That is, you can take them out to lunch to celebrate their closing, but don’t expect it to win you leads that doing your job well hasn’t already.
This isn’t to say that you shouldn’t ask for referrals at the end of a successful transaction—you should, every time. A lead is a lead. But be aware that your best wooing efforts will be better spent on other professionals in adjacent industries. The one exception? If you’re still following up with your customers years after closing. But we’ll cover that in a later article.
Finding referral partners
All our highest-producing loan officers have one thing in common: they have an extensive network of referral partners. Finding the right people, however, is half the battle. There are a few requirements you want to keep in mind while you’re searching:
- You share the same or a similar target market
- You are not in direct competition
- You will be willing to vouch for each other’s skills to customers
- Your potential partner has influence within your market
- You have the ability to refer them business as well—no great relationship is one-sided
In the mortgage industry, all this tends to point to real estate agents, title companies, contractors, attorneys, accountants and CPAs, financial planners, and investment bankers.
Of course, pretty much anyone can drive leads to you—one of our top loan officers has a barber as a referral partner. The real key is to do your research.
How to build relationships
No matter where you are in your career, you’re going to be starting at square one with a new referral partner. After you’ve singled out the people you’d like to connect with, making initial contact—at an event, through a customer, or even with an email out of the blue—is still just the first step.
There are a few things you should keep in mind.
Start slow
Some sales people make the mistake of jumping from person to person or networking group to networking group when they first start their search for referral patterns. Their reasoning? If I don’t see an immediate benefit, I need to cut my loses early and move on.
But this is exactly the opposite of what you should be thinking.
You don’t want to start the relationship off by immediately asking for referrals—it’s probably the least likely way to get them. That’s because “relationship” is the operative word here, and relationships generally start off slowly. Any worthwhile referral partner will want to get a feel for who you are and how you operate before throwing their reputation in with yours. And you should feel the same way.
Prove your value
For a relationship to work, it can’t be one-sided. Another common networking mistake is thinking that providing great service to a partner’s clients is enough to really seal the deal, but it isn’t, at least not at the beginning.
- Refer potential clients their way.
- Send them insider information on what’s going on in the mortgage industry
- Work with them on a joint marketing initiative
- Offer yourself as an educational resource
- Really go above and beyond. Still want to take clients out to lunch to celebrate their closing? This is the time to do it
Maintaining your referral partners
Like any established relationship, it’s easy to drift apart if you’re not proactive in staying involved. There’s some maintenance involved in keeping the lines of communication open.
Staying top of mind
The key to really staying at the forefront of your referral partner’s mind isn’t just to nudge with a phone call or an email. It’s to remind them that they want you on their side.
That being said, you don’t have to bring out the big guns each time—that is, sending them a lead. Next time you reach out, consider trying one of these:
- Share an interesting link
- Offer a new deal or incentive for their clients
- Propose a content swap—they write for your blog, you write for theirs
- Invite them to a networking event
- Propose co-branded flyers or postcards
Targeted marketing
Just because you already have a history with a referral partner doesn’t mean you have to (or should) stop marketing to them.
For instance, in 2015 the Total Mortgage marketing team and I constructed a short email campaign for our loan officers that we tailored specifically to realtor referral partners. In it, we repurposed existing blog content into a series of emails that real estate agents want to share with their borrowers.
These were longer, information-heavy emails, and if you read our previous article on email marketing, you’d know that long emails are difficult to pull off—you have to have the perfect situation for them to work.
A referral partner is that situation. They generally have a more technical knowledge of the industry and are already somewhat invested in you personally. Campaigns tailored to their needs are much more likely to hit home (and strengthen your relationship).
How to manage the transaction
Regardless of how well you woo a referral partner, the real test is how you treat their clients. If you mess up, you can bet it’s going to get back to your partner and potentially damage the relationship. Here are two common sense things that we’ve notice trip up loan officers again and again.
Be available
As a loan officer, a certain amount of inherent flexibility comes with the job. But while it’s easy to say that you’re always available, it’s harder to follow through on that promise.
Whatever your schedule actually is, make sure that you let borrowers know in advance what your response times are like, so they don’t have difficulty getting a hold of your later down the line.
Set expectations upfront
With turn-times varying so widely depending on program and underwriters turning up errors every so often, it’s incredibly easy to over-promise in the mortgage industry. While you may have an idea of how long a borrower’s mortgage will take, it’s never good to promise something you can’t guarantee.
Instead, set expectations upfront and use worst-case estimates. That way, when things go as planned, borrowers are pleasantly surprised. Remember, it’s better to under-promise and over-deliver than the reverse.
Next steps: tracking your referral partners with a CRM
A CRM (or Customer Relationship Management) system is a great tool if you have a difficult time managing all your contacts and keeping track of your customer interactions, something that tends to happen when you set up a referral network. Basically, CRMs keep everything you need in one place, so you don’t have to skip all over the internet for the materials you need.
Depending on the system you choose (and there are a lot of them), you can expect to have features that:
- Store customer and contact information
- Automate parts of your process
- Help you visualize your pipeline
- Integrate with social media accounts
- Track support calls
With these kinds of things accounted for, it becomes much easier to scale your business up and accommodate the new leads that a great referral strategy will nab you.
If a CRM is something you’re interested in, make sure you do your research on all the options available. At Total Mortgage, we actually use several, depending on a loan officer’s needs.
Want more?
You can learn more about what the Total Mortgage marketing team does for our loan officers by checking out other articles in this series, or by visiting our career portal.
from Total Mortgage Underwritings Blog http://ift.tt/1O18b5T
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