Handling mortgage objections – the modern way

With empathy, structure and focused customer concern and service. It’s not a battle like it was in the 1990s; now we’re helping the customer to make a decision

The Market Collapsed

My first foray into mortgage and insurance sales was in late 1988, just as the double tax relief loophole came to an end. The property market fell over a cliff, and I sat in an estate agency branch twiddling my thumbs. My new employers promised me the earth. Leads, by the hundreds, that you can convert in an instance. I guess before that fateful August, it was like that, but the market had since just comatose and died.

I needed to earn a living, and the agency branch I was based in was desperate for some profits, so I turned to a pal I’d met a few years before at a company called Manufacturers Life. He was a grizzled, life assurance salesman of old—sharp suits, snazzy ties, every inch the successful man. Love him or hate him now; he came to my rescue.

He taught me how to make calls to the extensive database of customers that the agency had. A bristling database of customers garnered over the previous 20 years until they sold out to the giant insurance company that owned the firm I was working for. There were dozens of old box files containing the database, nothing digital to be seen, just reams of sales documents containing the most valuable asset I could want. A name, phone number, and service they had gleefully purchased from us in the last few years. A happy customer.

My mentor helped me here. He told me to prepare for every possible objection they could throw at me because once you’ve given a half-decent response to an objection, the yearning to “knee jerk” falls away.

My reason to call them was a good old fashioned customer service appointment down at the agency office where we would review their situation as part of the ongoing customer support we provided. It was enticing and compelling, and I knew they would benefit from it. And it would keep me busy too.

The Challenge                               

The challenge I had was to hone my calling script to entice them into my office to chat things through with them. Like all sales pitches, people throw up what I call a “knee jerk reaction”. An instant rejection because they haven’t had time to think it through and needed to buy time. Nowadays, we call these customer objections or reservations. Back then, a customer said “not now” because they didn’t know what else to say.

My mentor helped me here. He told me to prepare for every possible objection they could throw at me because once you’ve given a half-decent response to an objection, the yearning to “knee jerk” falls away.

So we wrote down responses to all the objections I could think of that would be thrown at me during those warm customer calls.

In your world, you will be acutely aware of the ones you get all the time. Whether you advise,/sell second mortgages, personal loans, life assurance or investments. When you make calls to your database of clients from the past, they will throw back concerns to you.

Typical Customer Concerns

Let’s take the personal loan or second charge/loan marketplace, which is heavily consumer-oriented and digitised to the point where customers come to you via the internet. You need to give regulated advice to help them achieve their goals. You give the advice, send them the documents, and you hear nothing. You phone them, and they say:

• “We don’t need you anymore, but you were most helpful.”
• “You were very knowledgeable, but we don’t need you anymore, thank you.”
• “You were great, thanks, but we’re all sorted; thanks for your time.”
• “I need to think about it.”
• “Your fee is too high.”
• “I’ve no idea who the lender you’ve recommended is.”
• “I spoke with (competitor) and might be working with them.”
• “I’ve found a much lower percentage loan online.”
• “I’m going to use my existing provider.”

And so on. Of course, there are a myriad more, but they boil down to 4 categories:

1. They don’t trust you
2. They don’t think your solution will work
3. They think it’s too expensive or they can’t afford it
4. They don’t have the time to deal with it, or now is not the best time.

Now plenty of these can be dealt with during the earlier conversation you have with the customer. Trust is built, a proper solution determined affordability and checking budgets and a quick inspection to see they have time to deal with it now. But people are people and will throw all sorts of knee jerk reactions at you.

Sitting on their LAP

My mentor back in 1988 taught me the post-it note trick. We brainstormed answers to all the various objections that might be thrown around at me and wrote them down on a post-it note, and stuck it to my wall behind my desk. When a customer mentioned one of them, I swung my chair, read the answer, and returned the volley.

At first, I tanked.
Completely failed.
Bombed entirely.

Because I failed to listen to them, I hit them too hard and turned them away from me. My mentor told me I didn’t sit on their lap. This mesmerised me. As a 24-year-old, the notion of sitting on my customer’s lap was something that horrified me. But he suggested I do it.

LAP stands for:

• Listen
• Acknowledge their thinking
• Probe further to fully understand the nature of their issue.

It was the listening piece I missed out on; I’d failed to give them the common courtesy to listen and acknowledge what they were saying. I understand, Mr Khan; I see where you’re coming from. Yes, I get you. I’m hearing what you are saying. But it was the probing that changed everything.

“Why do you say that? What exactly do you mean? What is it that you want to think over? I hope you don’t mind me asking?” “What arrangement have they given you?” I appreciate where you’re coming from; what deal have they come back with?”

Now I was listening, taking everything they were saying, understanding their point of view, building rapport, showing empathy. And it worked. My answers to their situation didn’t put them on the back foot, so to speak; it was a real conversation and enough to dispel their knee jerk reaction.

LAPAC

So I mastered the LAPAC

• Listen
• Acknowledge
• Probe
• Answer
• Confirm and close

Over the next few months, I had a trickle of customers coming back into the office, chatting through their finances with me; I was helping with life assurance, building insurance. You’d be surprised how many of them hadn’t any clue they could shop around for that.

One or two started chatting to the negotiators in the office to contemplate selling their house. It built an incredible connection with them, kept me busy and produced a small but increasing commission income stream for the office.

And saved my job.