I read some interesting stats today on consumer debt. In 2008, the average American household had over $10,000 in credit card debt and more than half carried regular balances over $7000 (source: CardWeb.com). That means as debt counselor you have a lot of work to do.

Educating Consumers About Debt

The most effective way to get a consumer help is by educating them. Chances are that these debt weary consumers are in trouble because they lack good financial education. They don’t understand how to manage money, much less debt.

This makes credit a very dangerous lure.

Teaching your debt workout customers the basics of personal finance and responsible use of credit is a necessary first step. This will put them on the right track to financial recovery and earn you the trust you need to negotiate or counsel them out of debt.

Making Debt Counseling Understandable

Debt education sounds easy, but to most of those with debt troubles it’s like rocket science. Numbers, interest rates, late fees, settlement, repayment–these are all words that tighten their chest with anxiety.

You need to make it simple and fun. This debt workout infographic from Mint.com could be just one tool in helping to educate potential debt customers.

The Right Solution to Debt

The most important objective in offering debt solutions is getting the consumer to the right debt workout program for their situation. Walking them through a good process of educating them on debt, reviewing their financial situation, and guiding them to the most advantageous debt workout is a job you should be proud of.

This could be a great tool to educate your debt counseling or debt settlement customers. Remember educating your customers is the fastest way to get them to a successful debt solution.

Debt Help- Mint.com

In the Internet leads business we see so much straight selling of products-rates, payments, and terms. In many cases that approach might work. Some borrowers are coming in with knowledge, well researched, and ready to get their deal done. However, most are just trying to get a clue on how to improve their lives or financial outcome.

This is your opportunity. Stop confusing your prospects by rushing in with rates and payments. Start by listening for the financial outcomes they are seeking.

1. Lower debt payments – Everyone wants to have less debt, but most are probably just looking for some relief. That means reducing the amount they have to pay each month to satisfy creditors, and maybe get a little ahead.

2. Increase monthly cash - This is often the outcome your customers are looking for and there are lots of ways to get there. But, don’t start in with loan modifications and debt settlements-start by figuring out where they want their monthly cash flow to be and work backwards.

3. Pay off home early - Increasingly homeowners are getting more conservative. Although they may not be focused on this as housing values continue to decrease eventually I think you will begin hearing it more. People are certain to be living in their homes longer and looking to pay them off sooner.

4. Reduce mortgage payment and sell - A lot of homeowners are starting to think renting is a better idea. This is going to have customers looking for smart ways to sell their homes and minimize payments until that happens. Likewise, many people have to relocate to find jobs. That means they need to minimize their payments as they maintain two households.

5. Increase retirement cash - Many seniors had their retirement nest eggs ravaged by the stock market. Now they need to turn to their homes to increase their retirement income. Talk about what they need to maintain their lifestyle before you rush in and scare them with the reverse mortgage pitch.

Listen first, learn what your prospective customers are looking for in outcomes and then sell those outcomes-using products as tools and examples of achieving their ideal outcome(s).

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One of the top hidden objections to any sale is the consumer’s perspective of risk. What am I risking when I say, “yes?”

• Will it work when I get home?
• Is this really going to solve my debt problems?
• Are mortgage rates really as low as they are going to get?

Your number one priority in sales is to help remove as many of those mental “risk” barriers as possible.

Identify the Risks

The first and possibly the most challenging exercise is to identify the risks. Obviously this is challenging since you are not a mind reader. Most of the time these risks factors are going to be tucked away in the back of the customer’s mind.

The trick is to heighten your listening skills. Customers will give you clues:

• Can I call you back and discuss later? (I think there might be a better deal)
• Can you send me an email with the details? (I don’t understand)
• Why do I need to pay for the appraisal up front? (My house may not have the value)

These and more a subtle clues to what the consumer is afraid of-you need to minimize or remove these risk factors.

Overcome the Objection

Another way to remove the risk is to deal with the objection. Show understanding and start a discussion regarding the risk. The risk now becomes and objection and you are simply overcoming it with empathy and understanding. This technique can allow you to allay the fear without having to necessarily remove the risk.

This is particularly important when you can’t remove the risk (i.e., appraisal fees or guarantees of staying out of debt).

Probe for the Risk Factor

Some risks will be less easy to identify. In this case you may have to do some probing.

Use some of the objections and risk factors you have uncovered in the past:

• Are you worried about falling back into debt?
• Are you concerned what this will do to your credit?
• Do you think your home may not be worth enough?

By probing and getting the concern out on the table you can attack it and remove it from the sales process.

Master Risk Removal Technique

Like any good sales technique, it will take practice. As you learn the art and the most common risk factors in your customers minds, you can start removing them.

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We like to think of debt counseling as an altruistic pursuit, but the truth is sometimes you have to do a little selling to get people to help themselves. That means you need to put a few tools in your toolbox if you are to maximize the number of people you can help.

Debt consolidation or debt management is a pretty big market. The headlines tell us that this is an enormous problem and only getting bigger. That means your sales and marketing can be pretty broad and chances are you will quickly be talking to someone who really needs you help.

Debt customers are different than any other sales prospect you will probably meet. Unlike the average sales process or sales prospect these customers usually are in desperate need of help, are often misinformed about their situation, and the clock is racing against them.

This means you need to get them informed, knowledgeable about their options, and underway to managing their debt ASAP. Delivering this process and getting the debt client to respond can be more difficult that it would seem.

These are some of the sales tips that might help:

1. Start with trust building. Provide the troubled borrower with easy to read reference material on debt problems and how to solve them. This will give them confidence you have their interest in mind and give them third-party validation of what your recommend.

2. Let them see their own problem. Like an alcoholic many people over their head in debt can’t admit they have a problem. So, give them homework-simple debt calculation worksheets-to fill out so they can see the problem for themselves. These worksheets will also assist you in recommending a good debt workout solution.

3. Create a sense of urgency. Once you have all of their debt information and terms of their various creditors-show them the urgency. Lay out what is going to happen and when, if they don’t take action immediately.

Debt prospects need help to see the forest for the trees. Your debt sales process should be focused on giving them that picture quickly and honestly.

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How many times have you heard, “passion sells?” Or, “find what you are passionate about and it will make you rich.” Fact is, passion does sell, but these motivational quips often confuse us during execution.

The truth is most don’t have the means or the guts to just drop their day job and chase a passion on the “if come” of fame and fortune. However, I am going to tell you a secret–there is a smarter way.

Chances are you are in the mortgage or debt business because you are good at it. You got there because there is something that you enjoy about this business. So, if you want to be a big-time success in your mortgage or debt business do a passion inventory.

What are the parts of your business that make you passionate–then sell it:

• Teaching personal finance
• Sales training
• Debt reviews and workouts
• Personal financial reviews
• Economic and market analysis
• Mortgage rate monitoring

These are all little cornerstones of the business. Opportunities for you to be the best at a niche, a unique selling proposition. Find what makes you passionate about your current business; emphasize it, magnify it, get rich off of it!

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Too often we go into sales calls with little or no plan. No objectives. No criteria for success. This is where checklists can be magical.

Segment Your Leads By Product

One of the best practices in quickly and efficiently moving through a large volume of leads is to segment. This one simple step will remarkably accelerate your sales. By separating your leads into various buckets by the potential qualifying product(s) you will be ahead of the game. You will have the advantage of a plan going into every call.

Consumers’ financial scenarios are typically not as broad as you might think. Most fit into a few finite categories. These categories: good credit, declining credit, bad credit, stable income, self-employed income, improving housing values declining housing values all tend to funnel into specific products. Whether you are talking about mortgage or debt these characteristics (all on the average mortgage or debt lead) give you a heads up on what you can offer them–before you dial.

Create Scripts Specific to Segments

If you know what to expect going into the call you should be well rehearsed. That, of course, doesn’t mean practicing a fresh new pitch in front of the mirror before each dial. It simply means you should have a set of specific presentations for each product and/or credit profile. These presentations should be well scripted. You should be practicing and improving them constantly.

Using well-rehearsed presentations will make you sound professional and knowledgeable. The confidence in your voice alone will build trust in the client.

Develop Go-No-Go Checklists

Although you have segmented your leads and created good sales scripts make sure you can quickly qualify leads. As the market changes and product qualifications shift you need a simple way to tune you scripts for qualifications. I like using separate qualification checklists.

These checklists should be simple questions that quickly get you to a go or no-go decision on a prospect. Can you help them or not? THey can also be used as decision trees–helping you pivot to other products if your segmentation assumptions change.

Quickly moving through your leads and determining quickly who is and isn’t qualified is critical to sales success.

The multitude of government programs and stimulus packages has sparked another refinance boom. How are you managing this opportunity? Are you getting the job done? Are you positioning your client database for the future?

The last mortgage implosion should teach us a little about smartly managing opportunity.

Managing Opportunity

Many mortgage brokers are breathing a little sigh of relief as government stimulus has kicked up another refi boom. The question is are you thinking about how you are you are managing this for long-term opportunity?

Stop simply slinging loans and start building a business–this is the perfect time. Get a strategy to turn this into a seed strategy for long-term success.

Customers First

It all starts with the customer. Put them at the center of your refinance boom strategy. WOrk hard to give them a great experience. This will not only increase your closings and satisfaction, it will fill your sales queue with referrals.

Most homeowners are experiencing frustrating long waits for underwriting, processing, and closings. Minimize this frustrateion with frequent (pro-active) updates to clients in process.

Design long-term marketing campaigns that gives clients recurring value and make it easy for them to give you referrals.

Thinking About the Future

Step-back and give yourself time to think about the future.

What are you going to do to help these clients? Is there a way to more efficiently manage their contact information, follow-up, and special circumstances? How can I build a long-term value proposition?

I guarantee many will miss this opportunity–don’t let it be you.

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