Is it fair to compare?
Many of the conversations we are having in our business lately has focused around production, opportunities, closings, dollar volume, loan sizes, loan products, timelines, and the quality of the experience for the customer. I also think we need to think about including the quality of the experience for our families, our teams, and ourselves. Far too often, we also don’t include the number of days and hours we commit to making it all happen. For those who follow the numbers, it can become a painful observation without the benefit of clarification.
An example of a conversation I was having with a client this week focused around the dissatisfaction in specific number of monthly loan closings. What further made the situation worse was the company published every month a list of all the originators and ranked them by dollar volume and number of units closed. This is likely something we have all seen before. I think it serves an important function to do this and to recognize what is taking place across the company. The issues become troublesome when some originators see the numbers and devalue their personal accomplishments because they do not compare as well as some others. The issue is that no two people are identical, and neither are their referral partners, clients, types of loans, or quality of the process. Forget about calculating the hours worked, starting point, size of team, quality of the borrower or loan product!
When a loan officer closes 5 units more in a month than they did the month before, that is a good thing. But the question must be asked, what was the starting point? If that originator is used to closing 5 units in a month and goes on and closes 10 units, that is a 100% increase in volume. When another originator who averages 15 units a month closes 5 more, it’s a 33% improvement; still a nice thing, but a much different accomplishment. In fact, it’s much more likely for the 15 unit person to improve by 5 than it ever is the lower producing one. I am just talking units for now, but dollar volume can also be an issue given loan size. An originator who averages $200,000 loans adds five loans, that is a million dollars in volume. When an originator who averages $500,000 a loan adds two loans, it’s the same million dollars in volume. While the same dollar volume, not the same thing at all, not by a long shot.
So just keep in mind that a lot of our business is about numbers, just that the numbers don’t always tell the whole story. Compete against yourself and your personal best. Provide the best experience you can that fits your efforts and quality of life. Sometimes more, really isn’t more at all, just different. And managers; it would be good for you to acknowledge personal bests and percentage improvements as well as the top producers. Just a thought!
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