There is a phenomenal scene near the beginning of one of my very favorite movies, Reservoir Dogs. If you are not familiar with the film (then add it to your Netflix queue now!), it is about a group of guys assembled to rob a jewelry store. The morning before the heist they assemble at a breakfast joint for a bite and talk, in dialogue only Quentin Tarantino can write, about topics ranging from an interesting interpretation of the true meaning of Madonna’s “Like a Virgin,” to the essence of tipping food servers.

One of the characters, Mr. Pink (they don’t know each other’s real names), refuses to throw in his dollar for the tip because, “He doesn’t believe in tipping.” He tells how, “We don’t tip the people at McDonald’s. Why not? They are serving us food. But society says tip these people over here, but not those people over there!” He is so compelling in his ridiculous argument that one of the other cons decides to take his dollar back, too. So what is the point? It exemplifies the herd mentality and how some people can be convinced of just about anything, regardless of how asinine it may be.

This scene, I am afraid, is no different than one you may see every day as loan officers assemble around the water cooler to talk about the leads. “These leads suck! They’re all wrong numbers!” Or, “These leads are awesome! I have called two so far and got apps on both of them!” Pretty soon, everyone on the floor is believing the statements even if there is no factual basis for the information. Left on their own, your LO’s can convince themselves of just about anything the same way that Mr. Pink can talk Mr. Blue out of tipping. Your loan officers are an invaluable component of your business and you should indeed take very good care of them, including buying the very best marketing that you can for them. But the question you need to ask yourself is, do you manage your loan officers, or do your loan officers manage you?

Lead performance should not be based on what the word is coming from the sales floor. That should indeed be a component to the evaluation process, but it is based on anecdotal feedback so it is not always reliable. I can’t tell you how many times I have gotten feedback from clients telling me, for example, that supposedly the return ratios on my leads are in the 40-50% range based on the feedback from the floor. So, upon my recommendation we pull all of the lead return request information only to find that the actual number is in line with the industry averages. Usually, the client is shocked and a little embarrassed that they didn’t check the facts themselves before they complained to me about something that was actually a non-issue.

You need to regularly track your contact ratios, application ratios, and approval ratios, both in aggregate and by individual LO for each lead source. This way, when you get the complaints from the sales floor that, “these leads suck!” you can address the issue with real information. If you pull the numbers and they do suck, then take action accordingly. But if you can show the LO how the leads actually perform at “X” level and you are under-performing relative to the rest of the floor, then you are managing your loan officers more effectively. This is going to make them better, more profitable loan officers and have the same affect on your bottom line.

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