Do you wonder how some home loan professionals can charge A LOT more for their service and keep happy clients beating a path to their door?
And why other mortgage loan officers struggle to even keep their doors open providing the exact same service?
Well, some people might think it has to do with their location or the bank they work for or the state they live in.
But that would be wrong.
Why, you ask?
Because it nearly always is their focus on delivering higher value and the paying close attention to the clients’ experience with their firm.
Lowest Price Mortgage Loan vs. Highest Value Financial Transaction
We’re often tempted to use pricing as a strategy to get more clients. The idea is if our price is lower, a client would be much more likely to do business with us.
But that’s often a race to the bottom. And who really wants to be a bottom feeder anyways.
Plus, if you’re a small business competing with much larger organizations, it might not even be possible to compete on price and stay alive at all.
Here’s an example.
When I started in the mortgage industry, I worked for a company that was built on the high-volume, low-cost business model.
In fact, we were instructed to price out our loans to make $1,000 per deal and could be called in by management if the gross fees exceeded that amount.
We worked hard to take care of our clients. And they got a great deal financially.
But because of our pricing philosophy and the way we sold to our clients focusing on low rates and fees, an interesting thing happened.
We attracted clients who were mostly focused on pricing as their highest value in the transaction.
Needless to say, we constantly had people rate-shopping (even up to the day of closing) and hammering on us to lower our fees even more.
It wasn’t a pleasant environment to work in. At least not for a long and enjoyable career.
“The Clients You Charge The Most Will Be The Happiest Clients You Have”
So this was a little shocking to me.
After a couple years in the mortgage industry with my first company, I was recruited away to another firm.
A few days after I started, I ran into another loan officer who had also worked for the same company that I had just left. He left a lot sooner than I did.
As we were talking about the business, we drifted into a conversation about interest rate pricing, loan fees, and more.
And then he dropped the bombshell.
The reason he left our original company was directly related to their pricing philosophy.
He told me, “The clients you charge the most will be the happiest clients you have.”
I was shocked. And maybe just a little bit disgusted at the thought.
I’ve always been pretty conservative financially. Proud of getting a “good deal”.
Then he went on to tell me about people’s perception of value and how that becomes their reality.
He simply said that if people see enough value in what you are accomplishing for them, they’re perfectly willing….and in fact happy, to pay a significant amount of money to achieve those results.
It took a while for that to sink in.
I thought about it a lot!
In Order To Charge More, You Have To Become More
And over the next few years I started paying a lot more attention to ways I could add value to the conversations I was having with my clients.
and online referral marketing systems (like MySMARTblog…shameless plug)
I traveled all over the country to events (like Mastermind) to surround myself with the best and the brightest in the industry.
All of this with the intention to educate myself so I was more valuable to my clients and could bring better knowledge and advice to the table when I spoke with them.
And I learned to price my services according to the expertise that I was bringing to the table, too.
Happily, my clients saw the difference.
They understood that I was bringing a lot more than a low interest rate and the lowest closing costs they could find.
They understood that they had an adviser.
Someone they could trust.
Someone who would be there even after the transaction closed to answer their questions and give them advice.
And they were happily paying the fees commensurate with the service provided.
Not to mention that when my focus changed from selling for the lowest rate and fees, my clients changed too!
I started attracting clients and referral partners who also found value in a higher level of professionalism and commitment.
Those principles carried through in our interactions with clients and they really benefited all the way around.
And at the end of the day, I also really understood what a “great deal” really meant!
So how are you adding value to your client interactions?
How are you separating yourself to gain more attention and market share, while attracting the right type of clients?
Share your best tip in the comments below. We’d love to hear it!