Transaction or relationship? Mortgage expert Steve Richman says you need both.
For loan officers, real estate agents and other professionals, there are two typical kinds of sales models.
There is the first model, which is transactional. I have something you want. You buy it. We’re done.
The second model is a relationship. I get to know you, I understand your needs, and I offer you a solution.
But to Steve Richman, you can’t have the second without the first.
Steve is currently with Genworth Mortgage Insurance as their National Spokesperson and Customer Sales Trainer. He’s spoken at several mortgage banker and broker association events and presented before loan officers representing over 500 different lending institutions.
“Business is built on relationships, but relationships are built on transactions,” he said.
“Think of a marriage. That relationship didn’t on start day one as an actual relationship.”
This gradual development of a relationship is built on the first element, which is the transaction. But it evolves and becomes a relationship. This is the translational approach.
Change the sales mindset
For anyone in any kind of sales, you know that consumers care about price — at first. Whether they are getting a new mortgage, refinancing a loan, buying an insurance policy or even getting a haircut… price is the first driver of choice.
But price is a very transactional attribute. It’s hard to improve on price.
“Look at Amazon,” said Steve. “You go online, you find the lowest price, you buy it, and you’re done.” And that should be the end of it. Amazon has sourced the lowest price for you. But they keep you coming back. That transaction forms the basis for the company’s relationship with the consumer. You think, it was cheap and it was easy — I want to do that again.
But Amazon takes the transaction and builds the relationship with their Amazon Prime subscription service. For a fee, customers get access to faster shipping. You only value the service because of the original, positive transaction.
Steve brings this back to salespeople. You can’t tell your client they aren’t just getting the product, they’re getting you and your relationship. Because that transaction isn’t worth it to them yet.
“But at the end of the day they want you and the product for a good price.”
They need to know you, like you, trust you. But first, they need to do business with you.
The consumer mindset is what needs to influence the sales mindset, as Steve outlined. “If I like you, but I don’t like your company, I won’t do business with you. If I like your company, but I don’t like you, I still won’t do business with you.”
From mortgage professionals and others, customers want four things:
They want it fast. Nobody ever says they want things slow.
They want it easy. You need to reduce the friction and reduce the stress.
They want it right the first time. Because if it isn’t, there won’t be a second.
They want it reasonably priced.
And this is the important part — the term “reasonable” doesn’t necessarily mean lowest priced. It means reasonable for the transaction and the relationship. If you create a relationship, but fail on the transaction, that’s the end of the relationship.
“The translationship is the right balance. That’s the beauty of it!”