Mortgage Marketing Animals Issue 3

THE LOAN OFFICERS’ INNER CIRCLE

MEMBERS ONLY EXCLUSIVE NEWSLETTER

LEADING LOAN OFFIC RS TO FREEDOM

ISSUE 3

BUILDING A TEAM VS. PLUGGING INTO A TEAM KNOW WHAT’S BEST FOR YOU

We find that every time someone is added to a team, as long as that team member pulls their weight, it frees up the loan officer or branch manager’s time to get more business. We’ve found that the average person who adds someone to their team does an additional 5–7 loans monthly. For the example I’m about to discuss, we’ll use six loans as a general number. Keep in mind that this number is just an approximate example. So let’s say that every employee hired is an additional six loans to you and your business per month. We’ll make another general assumption and say that you make $2,000 per loan. Ultimately, each time you hire a new employee, you’re adding an extra $12,000 of revenue. Of course, you have to worry about paying your employee. To make it easy, let’s say they get $5,000 a month. That’s $7,000 of net profit per month going into your business. Keep in mind that while you’re bringing in this $7,000, you’re actually doing less of the work because the person you hired is helping you take applications, chase leads, and put out fires. All you’re doing is making the phone ring, selling the deals, and turning them back over to the team to handle the rest. 2 | Running Your Team Smoothly 3 | Script of the Month! 4 | Facebook Marketing 101 5 | What Freedom Means to Me 6 | DISC Test Basics 8 | Tool Time INSIDE THIS ISSUE

This month, I wanted to talk with all of you about the cost of creating your own team, plugging into another one, and which would be easier for you. Personally, I don’t know if there’s a right or wrong answer to this. I’ve experienced both and have been very successful with each method.

Loan officers have to be good salespeople to succeed, and as a general rule, we’re great at what we do. That doesn’t mean we’d make successful human resources (HR) officers — that’s an entirely different skill set. Just because I think I’m a darn good salesperson doesn’t mean that I’d be good at knowing how to hire and fire people. Granted, some people have both skill sets, but it’s not a typical occurrence. What I find quite often in this business is that people are hesitant about adding someone to their team. I’ve been asked, “Carl, what if they’re not the right person and I have to fire them?” People delay because they’re worried that the person they choose won’t fit with their team. However, if you hire enough people, you’re eventually going to hire someone who is going to be a wrong fit. You have to learn how to hire and fire fast, because that delay costs you a fortune.

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Now, it might take someone six months before they hire their first team member. Of course, it’s not your fault if you’re not the best HR person. In my organization, someone else does the hiring and firing because that’s not my gift. However, if you force yourself into the HR position and there’s a six-month delay, you miss out on $7,000 per month. That’s a total potential profit loss of $42,000 from not hiring that new person right off the bat. You might think that getting help is expensive, but not getting help costs you considerably more in money and time. It’s okay to recognize that building a team isn’t one of your skill sets and that you need to find someone who has that talent. Building a team is a major undertaking and I highly recommend it, but here’s the downside: Every minute you spend building your team, you’re not out selling. This leads into another viable alternative — plugging into a team that’s already in place. You don’t have to leave your company to do this. Find a group that’s already in your company and join their team. I did this early in my loan officer career, and it helped me immensely. Know that when you plug into another team, they’re going to charge you some basis points. Let’s say that cost runs about 25 basis points. If I’m used to making 100 basis points and I plug into your team, I’ll get 75 basis points, and you’ll receive 25 from me. As a bonus, instead of worrying about the headache of hiring and firing people, I’ll be able to focus on closing more loans and getting revenue for us.

Let’s look back at the math and say that I’m doing $200,000 loans, closing five loans a month with 100 BPS, and I’m earning $2,000 per loan. That’d be $10,000 of revenue as a one-man band. Now, if I plug into your established team, I’ll drop down to 75 basis points, but I’ll still be doing $200,000 loans — that doesn’t change. What does change is the number of loans I’m doing, which affects my earnings. If I was doing five loans by myself and adding six from being on your team, I’d be doing 11 loans. Instead of making $10,000, I’d be making $16,500 every month. Even though my basis points are lower, I’m closing more loans by being on your team. Again, both methods can bring success, and I try hard not to sway one way or another, because they’re both very effective. Y ou must decide what’s best for you and your business. There’s no right answer. I hope this information was helpful, and if you have any questions on the subject, you know how to reach out to me. Thanks to all of you for letting me be part of your success story.

KNOWING THE FUNCTION OF YOUR TEAM POD MODEL VS. ASSEMBLY LINE MODEL

We all agree that we have to set up a team to close more loans. That’s just how it works. And there are two primary methods of accomplishing this. I like to refer to them as the Assembly Line Model and the Pod Model. In the Assembly Line Model, when a lead comes into your team, you have someone who takes the application, which is usually you, the loan officer. Then that file gets handed off to someone else. This person orders out the file and hands it over to someone else to print the documents, which the client signs. Then these signed documents are passed on to another person, and someone after that, until the loan is closed.

In other words, there are a lot of different people doing individual things. I’ve never cared for this model at all. It’s hard to scale, incredibly inefficient, and it costs more than it’s worth agonizing over. Also, if a loan doesn’t close on time, we don’t know who to look at because there are too many hands on the file. It’s difficult to see where the problem came from. When you’re working with the Pod Model, you know exactly where to look because one person shoulders a lot of the responsibility. The loan officer is taking the application, selling the deal, and then handing it off to someone else who becomes the crew chief of that file. There are two methods by which the Pod Model can function: Lead to Closing and Contract to Closing.

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CALL TO ACTIONWHEN TALKINGWITH EXISTING CLIENTS So, who else do you know who would benefit from receiving the same excellent service that you’re already getting from us on THIS loan? UNIVERSE RESET BUTTON SCRIPT I really enjoyed working with you. In fact, if there was a Universe Reset Button (or if there was a magic button out there like that Staples Easy Button) that would make it so I only have __________ like you (clients, Realtors, partners, friends, sisters, brothers, waitresses, hairdressers, you get the picture), I would push that button all day long. Thanks for being so awesome.— If this is a business relationship, add your call to action. — Is there anyone you know who is as awesome as you and needs our help? The following script can be used in response to an agent asking, “HOWDID YOU HEAR ABOUT ME?” OR “WHY DO YOUWANT TOMEET WITHME?” You, the loan officer, are in charge of making the phone ring and bringing in new business. Once that phone call comes in, your receptionist will answer it and direct your client to your loan officer assistant (LOA), who is now in charge of that client and file. Your assistant will take their application and get that information back to you, and you will call that client back and sell the deal. This is the Lead to Closing method, and, on average, we’ve found that LOAs can handle about eight files every month this way. In the Contract to Closingmethod, as the loan officer, you take your clients’ applications,meet with them, sell them the deals, and then hand them off to your assistant.Using this method,we’ve found that LOAs can handle about 12 files per month.Once you get anything higher than that, it’s a good idea to start hiring a second or third LOA to keep up with the clients coming in. It’s much easier to spot a problem within the Pod Model than it is with the Assembly Line Model. For example, if you have three LOAs, and each of them receives a lead as they come in (the first goes to LOA1, the second to LOA2, the third to LOA3, the

fourth to LOA1, and so forth), they’ll have the same amount of leads and closings. In my company, we close about 25 percent of all our leads, so if each of our LOAs has about 40 leads, they should have around 10 closings per month. If one LOA has 40 leads and has only closed four loans, we have a problem and can fix it quickly. I believe that the Pod Model is a much better way to form a team. It’s far easier to spot a mistake and correct it than the Assembly Line Model and allows everyone in your team to learn the ropes of each step. If someone were to go on vacation, we have the people available to pick up the slack because they’ve been trained in multiple areas, unlike Assembly, where people are only tasked and trained in one area. I hope that all of you find my description of both models helpful, and if you have any questions, feel free to reach out to me. Thank you for letting me help you folks out and share my knowledge with you each month.

SCRIPTS WITH SCOTT

My team and I keep an ongoing list at my office. It says “Great Realtors” at the top. When we come across a Realtor we think is exceptional or hear another Realtor raving about a great agent, we put those Realtors’ names down on our list. Then, I look over that list every month and choose a few of those Realtors to meet with. That’s why you and I are sitting here today. Or That’s why I am calling you today. At some point in time, your name made it onto our great Realtor list. < pause > You see, I think it’s important to get to know the top-notch Realtors around town, as it’s only a matter of time before we end up at the closing table together. If I get to know you sooner rather than later, it’s easier for me to meet your needs when that mutual closing comes.

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SCALE YOUR CAMPAIGNS HOW TO TARGET FACEBOOK ADS TO THE MOST PROFIT BLE TRAFFIC

We spent a total of $28,320.11 on Facebook ads for one campaign in a single month. Here’s what we learned. This month’s article builds upon what you learned last month to help take your Facebook and Instagram targeting to the next level. Last month, I guided you through the process of focusing on

to be able to tell the difference between all these different people. Over time, it will show our ads to only the people interested in a mortgage within the next 90 days. This is where our $28,320.11 in ad spend becomes helpful. It allowed us to create this process for you. What we did inside our account is ran one campaign and then chose a broad audience of people interested in our topic. Then we checked the total audience size — the total number of people Facebook can reach based on our targeting choice.We picked a daily budget inside the first ad set and started getting estimates on the maximum reach we could get without letting Facebook waste our budget. (They give you a graph to help figure this out.) Our estimate told us that we could reach about 10 percent of the total audience with one optimized ad set. That means that when we run that ad set, Facebook is really only showing our ads to 10 percent of the people who could be interested in mortgages.We lose 90 percent of our potentially good leads by only running one ad set! So we took the exact same targeting and duplicated it into 10 ad sets. This part is very important. We then launched the one ad campaign with 10 identical ad sets at the same time. This forces Facebook to show your ads to everyone in the potential audience, which means that all of the good leads that are interested in mortgages will see our ads. Then we wrote very specific ad copy so only people who would be interested in our offer would click on the ads. A good test for you to run would have the headline, “Important Mortgage Rate Info!” The body of the ad would say, “If you have been qualified for a mortgage in the last 30 days or are thinking about it, you are going to love our brand-new, online mortgage quick-quote tool. Find out how much you qualify for and what rate you can expect to pay. No charge and no obligation.” Then, don’t just let anyone opt in. Make the people who clicked on your ads jump through hoops before they can input their name, phone number, and email and become a lead. Inside our survey campaign, we make them answer detailed questions. “How much are you looking to borrow? How soon are you looking to get your loan? What do you think your credit score is? How much down payment do you have saved?”

your warm audience and the traffic that is going to be most receptive to your offers. The benefits of this strategy include getting more referrals from past clients, more Realtor referrals, and warm audiences built on the 1 percent of people who match your past clients. This month is all about scaling your campaigns to the most profitable traffic that exists in Facebook and Instagram cold audiences. This is where you are going to adjust your campaigns and find longterm success that you can expand into other markets. You see, not all traffic on social media is relevant to your business. There are very narrow groups of people who have excellent credit, are in the market, and need a mortgage. These people are willing to fill out a lead form and work with someone they found on Facebook or Instagram. The problem is that they are incredibly difficult to find. Here’s how to locate this group. Disclaimer — this process is an investment of time and money. You can expect the process to take 60–90 days if you are investing around $1,000 per month in ads. You will still get good leads through the process, but the noticeable difference is at the end. We need to start by understanding that Facebook lumps all people into the category of “interested in mortgage” when they visit credit- and mortgage-related sites or interact with businesses on Facebook that offer these services. Take BankRate.com as an example. Yes, people going to that site could be looking for a mortgage. But they could also be looking for a line of credit, credit card, or savings account, etc. So, Facebook categorizes them as interested in mortgage when that might not be what they are actually looking for. It’s up to us to train the Facebook algorithm inside your ad account

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At the end of the questions, if their answers show us that they are a good lead, we send that information back to Facebook and tell the algorithm, “Find us more of these people!” Sweet! While your competition continues to pour money into general targeting each month, your campaigns will get smarter and more targeted. Eventually, Facebook will be able to tell exactly who your perfect customer is and show your ads to only those people. Your cost per lead decreases, and the quality of the leads that come through your funnel increases. Now, I understand this is a complicated process to understand and that visuals help. So I have recorded a video for you that

lets you watch over my shoulder as I build out a campaign. You can get it for free by going to ConnectionIncorporated.com/

targeting-workshop. Go forth and profit!

P.S.Would you like us to build this for you? Email me at chris@ connectionincorporated.com with the headline “Freedom Club,” and I will set aside some time for us to get on the phone and discuss your strategy.

WHAT FREEDOMMEANS TOME

LINDA SHINPAUGH (FREEDOM CLUB MEMBER)

Almost three years ago, my family and I set out for an adventure.We were in search of a new start.We wanted freedom from a small town where everyone thinks they know your business, freedom from the long hours we were giving to our employees and clients, and freedom to reprioritize our lives and live out the core values we preached throughout the week.We needed a hard reset, and that is exactly what we did. Now, not everyone chooses to sell all of their worldly possessions and move into their 42-foot fifth wheel in order to get their family back, and I wouldn’t recommend it without a lot of thought and planning. However, this decision has been life-changing for us, and we’re living a life most consider impossible. With the help of the Freedom Club, I have grown my mortgage branch from a team of two to a team of 10 from my camper’s dining-room table. I have systems and processes in place and use technology to huddle with my team almost every day. I have done this from campgrounds near Bar Harbor, Niagara Falls, Indiana Sand Dunes National Park, the upper peninsula of Michigan,Wisconsin, Minnesota, New Orleans, Austin, Florida, Colorado, New Mexico, Utah,Washington, and many more around the continental United States. My kids are not only learning math, science, and spelling, but they also know how to make plans and execute them. They can shake your hand, look you in the eye,

and have an engaging conversation. My 9-year-old daughter joined me on a coffee appointment last week with a fellow branch manager. She worked on her math while we all had a drink at Starbucks. She asked some really great questions and told a few stories during the hour-long meeting. Freedom is a state of mind and a conscious way of living for us. For me, it means I am focused on my highest producing activities, and I surround myself with a team who can do the rest. It means that I am not a slave to my phone and email. Most importantly, it allows me to acknowledge God and his purpose for my life while making my family my foundation — Shinpaugh Team core values No. 1 and No. 2.

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ABOUT THE DISC PERSONALITY TEST EVERYTHING YOU NEED TO KNOW

HOW TO EXPLAIN DISC QUESTIONNAIRE TO STAFF/ TEAM MEMBERS OR FUTURE HIRES We work together as a team and want everyone to feel successful in their efforts. We are big believers in utilizing this questionnaire to get insights into who you are, what you enjoy, and how to best communicate with you, and we use it to make sure we have everyone working to their strengths. This makes it a win-win for all of us. • 60–70 percent of the test is accurate, and the balance we will disregard. Ask, “When you took the questionnaire, were you thinking work or personal?” • Don’t make assumptions. Ask questions and guide, but do not pass judgment! • We are here to be engineers of epiphany. Inquire, “How could this be something that is not a drain on you?” • Any profile can be successful. They must have self- awareness and be authentic, which means sticking to who they know they are and not trying to conform to someone they aren’t. True self-awareness and authenticity is knowing what comes naturally to them without having to think or stress to accomplish tasks. Inauthenticity causes you to feel upside down from always putting in more effort than you feel you get back in results, and it blocks you from your passions. Adhering to self-awareness and authenticity is what brings true fulfillment. • If their skill set does not show up on any of the 3 profiles, do the following: • Have the applicant take the DISC prior to seeing a job description. This is always best, but not mandatory. You want them to answer truly and not based on what they think you want to hear. • Review their resume for experience. • Conduct a phone interview. • Test the applicant on job tasks.

• Schedule a face-to-face interview. • Check references prior to the face-to-face interview. • For the working interview, use sample files to test what they know or do not know. Host a team lunch. Your team can ask questions that HR or the owner cannot ask in the realm of getting to know them personally. You want to get a thumbs-up from all your team members on this person. This way, they are included in the decision and will be more receptive to assist with training. Ultimately, this allows for peace in the office. DISC REPRESENTS HOWWE TEND TO RESPOND AND OUR BEHAVIORAL TENDENCIES This can change based on outside influences. (Think of a beach ball floating in the ocean. It adjusts with wind and waves.) DISC should be 10–20 percent of your overall >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8

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