Setting Sales Trap Doors

One of my favorite sales techniques to teach and role play is what I call “setting competitive trap doors.” It is highly effective and it gets you out of a bad habit of bashing competitors to a prospect, which I always think is bad form and counterproductive in all cases.

The technique is simple. Here is how you get set-up to use the technique effectively.

  1. Start by acknowledging that a smart consumer will shop the market before making a decision. In the age of Internet lead generation they don’t even have to be smart the shopping is going to come to them anyway.
  2. Educate yourself. Make sure you learn all of the strengths and weaknesses of the competitors’ products. Make a list and tack it next to your phone.

Now you are ready to set the traps.

First, and I can not repeat this enough, never use or bash your competitor’s name–it is like a free commercial and it makes you look small.

Throughout your presentation of your product(s) educate your prospective customer on mortgages and the process. This education will turn into objections on the competitor’s sales call. Here are a few brief examples:

  • The Prepayment Penalty Trap
  • Now, Mrs. Smith we at ABC Mortgage Bank do not believe in pre-payment penalties because we know the market changes and as your mortgage professional for life it is our job to make sure you are always in the most financially advantageous mortgage for you, even if that means refinancing you next year

  • The Negative Amortization or Short-Arm Trap
  • Mr. Jones I am recommending you look at this 3 or 5 year IO ARM because I understand you want to maximize your current cash flow, but you want reasonable protection from rising interest rates. I think this is the right product to meet both of your financial objectives.

    Now, I will caution you, as you look at other products on the market, that there are others with lower monthly payments. However, they tend to be either negative amortization mortgages, which add those deferred interest payments to the back-end of the mortgage gobbling up your equity and making it impossible to refinance as interest rates decline or 1 year ARMs that will leave you exposed in one of the most obvious increasing interest rate environments in the last 10 years.

As you can see, with a couple of those gems as soon as the competitor mentions these scenarios you will have them off the phone and speed dialing you. Your education and focus on putting your prospects interest at the center of the sale will have you blast through quotas every month.

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One response to “Setting Sales Trap Doors

  1. Better than telling the consumer that “we don’t believe in pre-payment penalties” you might actually consider explaining the pro’s and con’s of having one at all. PPP’s are not just some junk fee that a lender or broker tacks on for a bigger profit; they are a way to guarantee a lender a better rate of return on their investment, thereby allowing for a more competitive offer upfront.

    I would venture to say that most of you reading this column chose to get the “free cell phone” by signing up for a 1 or 2 year service commitment with your cellular carrier, rather than buying the cell phone at $400-500 retail. PPP’s are effectively the same thing. You will get a better offer (ie. the ‘free’ cell phone) if you agree to keep the loan for at least a given amount of time.

    Have some brokers and lenders abused the PPP over the last few years? Absolutely. Probably to the point where new legislation will outlaw it altogether. But used effectively, PPP’s can be a way to get better terms for the long-term mortgage borrower.

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