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.
This doesn't mean that at the end of 6 weeks I am going to have 125 people on a list that grows every day. These first 25 people will stay on my prospect list for at least 6 weeks, until I have touched them at least 5 times. If one of these prospects tells me he really doesn't want to talk to me, then I'll move him off my prospect list to my mailing list. I will add another prospect.
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 will take 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.
Realistically, I won't actually work all prospects for 6 weeks, so the process should go faster. I'll learn that one prospect owns a mortgage company - dead to me. Another prospect's son is a loan officer - dead to me. Another prospect has been working with another lender for 20 years - not going to change... and so on.
Track the Whole Process
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All of these tools are in The Loan Officer's Practical Guide to Marketing - available at www.quick-start.net
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