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For a west-coast mortgage broker magazine, also available on-line.

See this assignment posted at January 2007 Pipeline http://www.hvmortgagenetwork.com/newsletters/feb07/art_decoding.html

Building Your Pipeline for 2007

If you don't use a formal sales pipeline to track your prospects, now is the time to build one for 2007. If you have a pipeline in place, now is the time to review it. Figure out what works, tweak what doesn't, and smooth the process so that you maximize your throughput.

There are two areas to review, whether building a pipeline for the first time or reviewing an existing process: technical and fundamental. To begin a preliminary technical analysis, take a look at your customer lifecycle. A customer moving through the sales pipeline looks like this:

Suspect > Prospect > Qualified Prospect > Proposal > Customer > Repeat Customer/Referral

The technical analysis consists in figuring out what percentage of customers makes it to each successive step. Here's an example of what the pipeline can tell us about two mortgage brokers in the same office:


Loan Officer 1


Suspects                Prospects                Qualified Prospects                Proposals                Customers                Repeat/Referral
(cold calls)                                                                                                                                         (sales)
                   Customers
100                        20                        5                                    3                      2                           0

Loan Officer 2


Suspects                Prospects                Qualified Prospects                Proposals                Customers                  Repeat/referral
(cold calls)                                                                                                                                         (sales)                      Customers

100                    25                             7                                    5                       3                           1


Both LOs made the same number of cold calls. Both closed about the same number of proposals-60%. Yet Loan Officer 2 ended up with twice as many sales as LO 1. Why? That's what LO 1 and his sales manager need to find out.

In this example, the difference may be that LO1 is only pursuing excellent credit prospects, which is a very competitive sector, while the other is pursuing a broader audience such as fair, good and excellent credit.  LO 2 could also have more knowledge of alternative loan products, making him more competitive within the market. The cause of the difference will vary from pro to pro and from market to market. The point of the exercise, though, is to pinpoint at what point you lose your prospects.

The other area to analyze is the fundamental. In professional selling, it is important to remember you simply can't sell on price. Mortgage professionals have to compete with LOs from across the country as well as Web sites that stack competing financial products against theirs. Many of these sites are backed by large advertising budgets with national reach.

Instead of selling just on price, offer what most cut-rate sellers can't: service and knowledge. That's where Customer Relationship Marketing can help make a difference. Examples of this type of marketing include an informational seminar, monthly emailed newsletter, market information, rate information, an article on financing or book that could help your borrower. The point is, keep your customers and their friends and family coming back to you. On average, it costs five times as much to create a new customer as it does to re-sell an existing customer. Think of it this way: if you can resell an existing client or referral, you save more than 80% of the time and money generating that same sale to someone who doesn't know you. In the example above, the repeat customer for Loan Officer 2 makes a substantial difference in his income.

A technical and fundamental analysis of your pipeline doesn't necessarily mean changing the tracking system; it means using the information in your pipeline to increase your efficiency and effectiveness. Ferret out your weak areas, wherever they are. Sharpen your service, market and product knowledge, and follow-up skills, because those are areas where most price-sellers can't compete. The result should be a fuller pipeline filled with prospects, repeat business, and referrals.
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