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By Rob
Real Estate & Mortgage Broker... Creator of the Sink or Swim Loan Closing System
Owners of mortgage
companies, please forgive me. I’m about to let your employees in on a
little secret—they have to option to leave you at any moment. And, many
of them will.
New career
opportunities are abundant in the mortgage industry. And unless you
start treating your top producer’s differently, they may look
elsewhere. The loan officer not satisfied at your company today—may be
the loan officer working down the block at your competitor’s firm
tomorrow. It’s the sad truth that the mortgage industry can be
cut-throat—even inside the office!!!! But then again…that’s business.
;-)
Company owners, should
really re-evaluate the way they treat their employees. Make a goal this
year to grow your mortgage business, instead of just trying to replace
the people who have left for greener pastures. During my consulting
practice, working with company owners, I’ve seen this happen time and
time again. Loan officer retention is always a problem, and keeping
your top producer’s happy is an ongoing process.
Think about it. How
much are your top producers REALLY worth to you? How much do they
produce for you per month? How much of your bottom-line is attributed
to the top 20% of your office? What would happen if these people left
you? How much money would you REALLY lose? Write this figure down. I
think you’d be surprised.
All too often,
employers view their employees as nothing more than liabilities…draining
their company assets. Employers change commission structures, reduce
benefits, increase working hours, implement new rules and make changes
to suit the profit margins of the business. But they don’t realize that
this short-term thinking to increase profitability, has detrimental
long-term effects and can actually harm their business! With changes
like these, it’s no wonder why loan officers leave in response.
Remember, these people
are what I like to call your “producing assets”, and over the lifetime
of their service to you, are worth many hundreds of thousands of dollars
to YOUR company’s profits.
In business, you may
have heard of the “lifetime value of a customer”. It’s a common phrase
used in marketing and it is extremely powerful. What “lifetime value”
means is how much is your customer truly worth to you in terms of money,
over the entire course of their relationship with you. It’s a
quantifiable figure. It what your customer base spends with you.
For example, if you
know an average customer will buy X amount from you, and they’ll stay
for a certain length of time and re-purchase or buy other items from
you, it’s how much they are worth to you in total. This figure gives
you the lifetime value of the customer. It also tells you exactly how
much you can spend to attract that customer to your business, and still
make a profit (based on their future purchases). The lifetime value of
your employees is no different.
Think about it. How
many employees do you have? How long does the average loan officer stay
with your firm? How much over the life of their relationship with you,
did they produce in commission income? Now, how much did the top
producers in your officer produce in commissions, before they left?
Write these figures down. Then do the math.
For example, if you
know that for every new, qualified producing loan officer you hire, that
they stay with you an average of 8 months, and their average commission
income to the firm is $22,000 per month (gross), you know that their
lifetime value to you is $176,000. That’s a big future revenue stream.
Add another qualified
producing loan officer, and you’ve effectively added another $176,000 to
your bottom-line. Get your current loan officers to stay with you for
an extra average month, and you’ve increased your profit another $22,000
per month per loan officer. Can you see how powerful this is?
Of course, not all loan
officers are created equal. You’ll notice that I used the words
“qualified” and “producing” before loan officer, meaning that the person
is strongly motivated to succeed, willing to make the necessary phone
calls, and has the educational background and sufficient industry
knowledge to sell and close a loan effectively. That is what a fully
qualified producing loan officer is. The definition of a top producer
is one who is willing to do all the above yet go the extra mile to get
the deal closed. They never stop. They are relentless. As every loan
officer should aspire to be.
The lifetime value of
your employees is a quantifiable figure that tells you exactly how much
your “loan officer assets” are truly worth to you. Company owners, when
you stop looking at your employees as liabilities, and start treating
them like investments, it’s a powerful paradigm shift that can explode
your company’s growth.
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