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Tuesday, November 16, 2010

Loan Officer Selling: My Marketing Plan - Week 1 - Choosing Prospects

My Marketing Plan - Week 1 - Choosing Prospects

Choosing prospects is one of the most important elements in developing a marketing plan.  Once I identified how many loans I needed, I knew how many referral sources I needed.  Too few prospects and I am not active enough.  Too many and I cannot possibly reach them all. 

Unqualified prospects

When I don't know what that prospect would want from me, I have no business reaching out to that person.  It shows I don't really understand what I have to offer.  I need to think it through because every prospect should have a need that I can fulfill.  More on this later. 

The Math

I decided I needed 6 or 7 loans a month to earn my desired income.  Based on average production sources producing one referral a month, I need 7 referral sources.  How many prospects will I need  to source to get to 7?

Statistics say that you will go through 40 prospects to generate 1 referral source.  Can that be right? I need to call 280 people to get to 7 referral sources?  Now you know why it takes so long to get up to speed as a loan originator.  I have to make a large number of calls, but they also must be to good prospects.  How do I manage this?

First, I have to figure out how many people can I meaningfully follow up with in the course of a week.  Is it 280?  No WAY.  What about 5?  I can do that in a day.  Maybe even 6 or 7.  When you get down to it and start actually calling you will realize that these 5 calls are a lot of work.  You have to plan the call, make the call and then do the follow up.  Then there are other things I have to do, like go to meetings, fill out paperwork, and pick up the kids.  Also, if I set myself up to do an unreasonable number of calls, I will become disenchanted with the process.  

If I call on 5 people a day, that's 25 people a week.  My initial prospect list is 25. 

You have heard the adage, 80% of sales happen after the 5th call, but most people don't even get to the 2nd call.   I have to call the prospect at least 6 times, because the sale will happen AFTER the 5th call.  I do this because I have to give people a chance to be my customer. 

How long will this take?

Following this system I should get my first full time referral source between week 6 and week 12,  because I will have moved completely through 50 prospects.  I should pick up my second full time referral source within the next 6 week cycle (75 prospects).  I hope I am doing better at choosing more suitable prospects, and also doing better at closing them by this point.  But if not, I am going to continue working through this cycle and the next customer should come within the next two 6 week cycles. (125 Prospects) ..

Under the worst-case, where I am having to really churn through prospects, it has taken me about 6 months to get 3 full time referral sources.  I AM HALFWAY TO MY GOAL!!  Assuming I am not improving any techniques or choosing any better prospects initially, I will reach my final goal of 6 referral sources in about 13-14 months. 

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