Why Metaphors Are Such Powerful Sales Tools
What is it about metaphors that makes them such powerful communication tools?
Simply, they drive home a point with a short, memorable, and emotional punch that information and logic alone do not have.
Master Mortgage Planners often use them as a teaching tool, or to convey difficult concepts.
The use of appropriate timely, tasteful and powerful metaphorical illustrations is the poetry of all superb communications. Additionally, the use of metaphors can also dramatize the sales process and help you become a superlative persuader.
Anyone trying to make a point or a sale is being swamped in today's market by the perfect storm of client/listener resistance and too much information coming at people too quickly about loan products, services and causes which all begin to sound alike and ultimately blur in their minds -- which makes getting a result or commitment incredibly difficult.
The flood of information coming at our clients daily is increasing, not decreasing. More information is not the answer. In this environment, we need new tools and strategies to get our messages heard and remembered. Metaphors are those tools: they are colorful, memorable shortcuts to understanding. This post will provide you an example of how to use them strategically to get the results you want.
That said, today I stumbled upon an EXCELLENT example by Mike Mueller. In this example, Mike uses a metaphor to explain something that would normally be a very complex concept for most clients to understand.
Mike was gracious enough to give me permission to reprint his blog post titled, "Of Puddles of Pools."
Long term mortgages and the rates and terms they carry are determined by a couple of different factors.
While many people mistakenly think the Fed controls mortgage rates they are in fact determined by Mortgage-backed securities (M.B.S.).
M.B.S.'s are created by pooling loans and selling bonds with coupons based on the mortgage rates. 60% of the mortgage bonds in the U.S. are guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. We've all heard of them before - right?
Yields, or rates on 10-year Treasury securities are typically used to track long term mortgage rates. Investors typically use Treasury yields as a benchmark for value, but it's the M.B.S.'s that create the actual interest rates. Factors such as supply and demand are always important.
When we talk about these large pools of money, we're talking about really large pools. (imagine Trillions of Dollars).
Large pools of anything tend to move slow and steady.
Fannie, Freddie and Ginnie are not the only players in the 30 yr. fixed game.
There are significantly smaller "puddles" of money that need to be diversified and invested in real estate. (now imagine Billions or Millions)
These "puddles" may be controlled by large insurance companies, investment funds, pension funds and so on.
Every now and then one of these companies has a "puddle" they desperately need to have invested.
Rule Number One of "Pools & Puddles" is...
Like water, always keep the money moving - stagnant money earns nothing.
This applies to big business and small.
Two months ago, I was approached by a representative who had a "Puddle".
He needed to move this "puddle".
To entice the rapid deployment of this "puddle" they reduced the rate.
Once again, supply and demand.
Now since they didn't want to compete head to head with F & F, that would be bad business.
They went outside of F & F's sandbox. They went "Jumbo".
(a Jumbo loan is anything above the limits of F & F, currently $417,000)
Surprisingly, the rate at which this "puddle" was offered was a full 1% lower than other Jumbo rates and even below F & F rates! -
Wow!
I told everyone of my prior clients.
Needless to say, that "puddle" dried up pretty quick. It's now gone.
I don't think I've ever seen this before in my 14 years.
They have a new "puddle".
This one's just about the same.
It's a 30 Yr. Fixed Jumbo.
Fully lockable.
No tricks, no gimmicks, simple stuff.
Purchase or Refinance.
Owner Occupied Only.
Yes, you don't have to have a Jumbo to use it, and there is an Interest Only option.
Hands down there may not be a better loan out there for the long term owner right now.
But is it right for you? Perhaps. Only by running the numbers can anyone really say.
Remember, it's a puddle not a Pool - Not available at you local bank - and it's first come first served.
There's only so much room in a Puddle - jump in while the Puddling is good
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