For years, sales trainers have been pushing the idea that the more objections you face in a typical sales call, the more likely the sale will end in getting the business. Ask yourself this question if you have been in sales any length of time, “Do I face more objections now than when I first entered sales?” The answer for most of us is very clear: we face fewer objections as we have become more experienced. Then why are sales trainers and managers promoting the idea that more objections are better? Because, in the one-time commodity sale (vacuum cleaners, water softeners, etc), this is true. But in relationship or consultative selling, in which a loan officer is involved, the opposite is true. The fewer objections, the more likely the sales process will end in a close.
We hear objections in a sales call because so often, we set ourselves up by the poor questioning skills we use or we give a presentation without knowing what the customer really wants. How do you reduce the number of objections you hear? By practicing “objection prevention.” Objection prevention is simply not setting yourself up to hear objections. We do this by using a very specific set of questions when dealing with any client or prospect. The term we use is “guided questioning.”
Guided questioning is asking a question that guides your prospect to the advantages of your offer, but in the prospect’s words, not yours.
Here is the typical way an average sales person would respond to a prospect.
Loan officer: “Is there a specific loan product in which you are interested?”
Prospect: “Well, I’m thinking about a 30-year fixed rate loan.”
Loan officer: “We have a very competitive fixed rate product!”
At this point, the average loan officer would start the “features and benefits dump,” telling the prospect all of the wonderful advantages of the product. At the end, the prospect simply says, “I’d like to check around with a few more lenders.” Ouch!
Let’s try it again, this time with guided questioning.
Loan officer: “Is there a specific loan product in which you are interested?” Prospect: “Well, I’m thinking about a 30-year fixed rate loan.”
Loan officer: What are some of the benefits you like about a 30-year fixed rate loan?”
Prospect: “I have never been comfortable with the idea of an adjustable loan, although I like the lower interest rate that an ARM has upfront.”
Loan officer: (Don’t dump features and benefits yet!) “So if you could have the comfort of a fixed rate and the lower initial rate of an ARM, you would have the ideal loan. Is that correct?”
Prospect: “That would be great!”
Loan officer: “How long do you plan on being in your home?”
Prospect: “My company moves me about every five years.”
Loan officer: “Then a loan product that would give you a rate lower than the current 30-year fixed rate and give the same rate protection of a fixed rate would be ideal for you?”
Prospect: “Sure!”
At this point, you could introduce the concept of a five-year ARM or even a buy-down product. This is the part where most loan officers would start the old standard presentation and begin “telling” the customer all about the product. Do not make this mistake. What should you do? See next month’s newsletter for the answer!