Whether you’re new in the game of lending money or an old pro, there’s always something you can do better. But are you making any of these critical mistakes? A recent article on BankDirector.com highlights Three Mistakes Banks Make When it Comes to Pricing Loans.
As the article mentions, the new regulations and low interest rates that have come into play over the past several years have made it difficult to lend money to make money. As a result, the author notes, banks have focused on cost cutting and regulatory compliance in favor of customer service. The analogy of Frank Capra’s George Bailey he uses is important.
Are you looking for shortcuts when you should instead focus on doing the right thing? The BankDirector.com article suggests that in order to do this, you need to have the following in mind when you and your team price loans:
Math vs Execution – If a customer can get the same deal from your competition, but not the same service, how many more loans will you sell? Focus on that.
Sales Autonomy – The old “let me check with my boss” routine is… old! As the article notes, if your sales team doesn’t have the ability to maximize profitability while making the deal, they end up losing credibility with the consumer, who is likely to assume either the “car salesman” line or the loan officer is bogus.
Focusing on the Rate – While your loan negotiations will include negotiating an interest rate, the other aspects of the loan can affect the customer’s decision. Don’t neglect them.
The bottom line is that technology has changed the way consumers shop for loans. If you focus on service and customization, you’re more likely to seal the deal in a way that makes you and the customer happy.