If you could improve on one aspect of your business, what would you choose?.
Most loan officers would want to make their marketing efforts have better responses. And while marketing is critical to business success, there are other aspects of your business that are overlooked and could have much more immediate results.
This article is going to show you how improving your closing ratio just a little bit can have massive effects on your earnings for the year.
We are going to talk in hypotheticals for a second, so bear with me.
We have two loan officers working in the same office. There businesses are identical in every way. They have the same processors, underwriters, and marketing tools.
The only thing that is different is that Loan Officer A has a slightly better closing percentage than Loan Officer B, and let’s see how this will affect their commissions in the long run.
Both loan officers, through their marketing and prospecting efforts, meet face to face with 25 potential customers each week. They both also average about $800 per closing.
Now Loan Officer A is a better closer than Loan Officer B, but only slightly better.
So out of those prospects, Loan Officer A closes 3 of them, and Loan Officer B closes just 2. That one loan difference means that Loan Officer A is 4% better at closing than Loan Officer B.
Did you see what I just told you?. Loan Officer A didn’t close twice as much, or even 25% better. It was just 4%.
Now 4% doesn’t seem like much, right?. However, that 4% allowed Loan Officer A to close one more loan that Loan Officer B, and at an average transaction commission of $800, that 4% will cause a difference in gross income of….get this:.
Over $40,000! ($41,600 to be exact).
Becoming a better closer is like any other skill that can be studied and mastered through education and practice. Pick any book by Brian Tracy or Todd Duncan, and you are well on your way. Also, take the time to practice scripts and/or roleplay. It’s not just knowing what to say, it’s also knowing how to say it and it will only sound natural through repetition.
So the next time you are brainstorming ways to improve your business, remember how changing your closing ratio (by just a little bit) can generate incredible financial rewards. Just a 4% change caused a difference in over forty grand in income.
Don’t be the average loan officer. Be different and be remembered.