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Calling cards: managing call frequency is the key to developing a top-producing sales staff.


Managing call frequency is the key to developing a top-producing sales staff.

Finding and retaining a qualified, productive sales staff is a top concern among branch managers or owners of small mortgage companies. While many operations have hardworking, competent, back office staff, upon closer observation of a typical small company, it often appears that the sales side is chaotic, disorganized and understaffed.

Given the income possibilities of even mediocre loan officers (a commission loan officer originating 10 loans per month in most states is earning more than $40,000 per year, plus fringe benefits), one would think that there would be no shortage of people willing to do the job. Indeed many are tempted to try it. The industry is famous for taking in eager young people, training them to take applications, and then marching them out like cannon fodder. Rarely do loan officers fail because they didn't know how to take a good application, or because they didn't understand how a loan works. Loan officers fail because they are inadequately trained and supervised.

Think for a moment about the back office staff. Why do they succeed? The reason is that processors and closers are told explicitly what performance is necessary to do their job well. They also have daily supervision. Loan officers, in contrast, are not usually provided step-by-step instructions. What is worse, the training and supervision of a loan officer's performance is subjective at best--the loan officer's talent is often likened to intuition. Even when managers train loan officers, they generally say: "Watch me, and do as I do." The loan officer in training may be very observant, but translating what he sees into a specific set of behaviors is a tough job.

To lend objectivity to the process of training and supervising loan officers, the following radical premise is offered. That premise is: Our industry knows precisely what qualities all successful loan officers have in common--and we can describe and monitor those behaviors to give constructive feedback to loan officers, so that they can refine their methods and become more productive. In other words, you hire, train and manage loan officers exactly the same way that you can hire, train and manage processors and closers--with the same successful results.

In the past 10 years, books such as Tom Peters' In Search of Excellence have stressed that customer service is central to the top performance of such companies as IBM. Companies that enhance the energy, commitment and professionalism of their staff will reap the rewards of profit and growth. The salespeople of these blue-chip companies are the point-men of the marketing effort. They search out customers, help define their needs and report to the organization what it will take to make the sale. The mortgage industry, by contrast, is one of the few businesses where close supervision of the sales force is the exception, not the rule.

Call frequency

Take 100 successful loan officers from different organizations. Look for the common qualities shared by all of these successful salespeople. Ann Arbor-based Washtenaw Mortgage Company analyzed 115 of its correspondent companies and determined that, on average, 60 to 70 percent of every top-producing loan officer's business came from a relatively small, loyal, core group of customers, usually between 15 and 30. Further, our experience, as well as interviews with these correspondents, revealed that call frequency is a significant factor affecting the success of certain loan officers.

We found evidence that loan officers who frequently call on a small core group of customers produce more loans than those who call less frequently on a larger number of people. Persuading Realtors, builders, personnel directors or others to refer their clients to a lender entails selling the relationship. Those individuals who are good at cultivating business friendships will succeed. Some loan officers work hard passing out rate sheets and speaking at office meetings. These loan officers generally fail as salespeople, though, because instead of developing close business relationships they foster hundreds of fleeting, casual contacts that don't usually result in mortgage loan originations.

Managing call frequency

The first question every manager must ask about the principle of call frequency is: "Do I believe it?" Is this really what all high producers have in common? A lot of managers stress underwriting knowledge, professionalism and finesse in taking the application. Yet, I have never seen loan officers with high call frequency fail, even when their professional standards weren't up to par. But, I have seen individuals who have set high professional standards get caught up in the details of underwriting, interest rates or production of the day's rate sheets ultimately fail, because they did not have high call frequency.

Industry surveys reveal that Realtors prefer to be called upon between two to three times per week. This frequency is necessary to maintain the sense of an active business friendship between the Realtor and the loan officer. A loan originator can also substitute a personal note, a telephone call or a social contact for a face-to-face sales contact. However, too many substitutions can devalue the relationship--my customers tell me things face-to-face that they would never say over the phone.

If you accept completely the notion of call frequency, a lot of things follow directly from that idea. If a loan originator has 15 customers in his core group, then he must average six calls per working day in order to maintain minimum call frequency. Generally, this dictates the parameters of most core groups. Thirty customers is about all most loan officers can handle, because averaging 12 calls per day is almost impossible, given everything else the loan officer has to do. Once a loan officer reaches a core group of 20 to 25 customers, it normally makes more sense to upgrade the quality of that core group by replacing low producers with higher producers than to continue to increase the size of the overall group.

Because call frequency is such an important factor, then, loan officers can be monitored in the same way as processors and closers. To ensure progress, a manager should help new loan originators establish a customer core group and maintain proper call frequency with that group.


The first step for every loan originator is to determine the core customer group. Written goals, correctly formulated, are the first step to effective supervision and management. Loan originators can begin by formulating a written target list of Realtors, builders or other clients in the order of their importance. This type of plan helps loan officers visualize their core group and develop a strategy for keeping and enlarging it.

The list should be devised such that customers in the center of the target are the ones who give the loan originator almost all their business. In the middle circle are those who provide business occasionally, perhaps when the price is good or when a particular client they have just happens to fit into a specialized program. In the outer circle are prospects. The loan officer's strategy is to move customers from the outer circles towards the center by getting more commitment from them every time the loan officer makes a sales call.

Target market plans, however, are not permanently fixed in stone. They should be flexible and changed whenever appropriate. If a customer does not respond to the loan officer despite repeated calls, that person should be replaced with a more likely candidate. Under no circumstances, however, is it ever appropriate to operate without a plan. This only makes it easier to procrastinate the goal-setting decision.

Call reports

Loan origination staff should keep a record of every sales call made in the course of a day. A simple call report form helps to organize this record-keeping on a weekly basis. The call report should include the date and time of the call, the name of the customer, and a short description of what took place to maintain or increase that customer's commitment to the loan officer. Call report management is not as critical for high producers, because they are almost always engaging in some form of time management activity designed to improve their focus on a core customer group. A manager can just pick up whatever data the high-producing loan originator is already generating. From the manager's perspective, the proper keeping and submission of call reports is necessary in order to do his job well, because without those planning tools, the manager will be ineffective as a trainer and a supervisor.


Many managers conduct performance reviews like they were performing a scene from Shakespeare's play, "Romeo and Juliet"--all sword fights and adolescent love. They are either praising people effusively and telling them how much they love their work, or they are angry and critical. There is a time and a place for positive reinforcement--and that time and place is not the weekly performance review. Likewise, managers must avoid any temptation to be critical or parental during regular weekly reviews. If employees hear reprimands they are not likely to listen to useful information, and it may even further their resistance to improvement. The object of a weekly review is to help loan officers examine their work objectively and to help them change unproductive behavior.

In a weekly performance review, the loan originator should be informed of the total number of sales calls made that week. This number is compared to the total number of sales calls made by co-workers. In this way, loan officers know where they stand in terms of cumulative effort. Second, the manager should report the loan officer's call frequency--the percentage of the targeted core group that received sales calls twice or more per week. For example, if a loan originator maintains a core group of 20 customers, and calls on 16 of these core customers twice or more times in a week, then the loan officer has a call frequency of 80 percent. Those loan officers with call frequencies of 70 percent and more will invariably be the company's top producers. After these facts are conveyed to the loan officer, it is helpful to hold a short, constructive discussion about what is happening in the loan officer's territory and what his or her plans are for the coming week. Specific criticism is generally not necessary. After all, if a loan officer ranks in the lower 20 percent of his or her colleagues in terms of total calls made, and the call frequency is 30 percent, what further criticism is needed? After a few weeks of finishing dead last on these criteria and starving in the field, such loan officers usually quit or change their behavior on their own.

This method will give loan officers clear job descriptions and it allows for basic supervision. Essentially, it provides loan officers the same type of interaction with management that is responsible for producing successful back office staff.

Becoming a sales manager

You don't need to be a sales manager to utilize target market plans and call reports. Loan officers can manage themselves or co-manage each other. However, the system works better, especially for trainees, if experienced management is on-hand. Managing loan officers is time-consuming and, arguably, a full-time job. Two to three hours per week must be spent recruiting candidates and interviewing. Many hours each week are spent shuffling back and forth between target market plans and call reports to calculate call frequency. More time is spent reviewing and discussing advertising and marketing strategy. Attending staff sales meetings and local homebuilder and Realtors association events is also important.

One thing that upper management may do to totally frustrate the effectiveness of the sales manager is to put that manager in charge of problem loan files. Sales managers who work with crisis files simply can't do their jobs--they end up as crisis case managers. Someone else in the organization who has the confidence of the loan officers should be designated a crisis case manager. The temptation of loan officers to win sympathy from their own sales manager in these cases is largely the reason why so few sales managers in the mortgage industry are a success.

Managing loan originators requires supervision of their efforts to target a core customer group and maintainance of a prescribed call frequency among that group. Although having professionalism and the back-up of a good service operation contributes to the sales effort, the key to success is purposeful, focused sales calls. Loan originators who are overly involved in processing routine file status questions are either being undermined by a substandard service operation or are engaging in classic avoidance behavior with respect to sales calls.

The twin tasks of the sales manager are to implement a company-wide service ethic and to hire, train and supervise a sales force. It is important to select individuals who are likely to maintain satisfactory business friendships with Realtors and builders and supervise the selection of a core group and subsequent follow-up calls. Each sales call should result in a small increase in commitment from a prospect. The manager conducts a weekly review to measure call frequency and to discuss the current commitment level of each customer included in the core group. As unresponsive prospects are dropped, new names should be added. As a loan officer grows in professional skills, and as his service organization develops to meet his customer's needs, his core group will change to include higher producers.

For years mortgage companies have limped along without a clearly defined service ethic and without effective management procedures. In the years when profits were fatter, there was room for these kinds of inefficiencies and mistakes. Now, ineffective marketing kills branches and even whole companies on a regular basis. The margin for error is gone and the industry has been pervaded by a "crisis management" mentality.

Washtenaw Mortgage found that 90 percent or more of all loans are not made by the company in town with the lowest rate. The struggle for market share entails getting the consumer to place a cash value on intangible services and by appealing to referral sources. Call frequency is the most important element in mastering the sale of the mortgage loan service.

Richard Greene is vice president of marketing at The Washtenaw Mortgage Company based in Ann Arbor, Michigan.
COPYRIGHT 1990 Mortgage Bankers Association of America
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Author:Greene, Richard
Publication:Mortgage Banking
Date:Dec 1, 1990
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