The questions your lenders ask their customers will shape the conversation and ultimately the deal that’s crafted.

In this episode, Jim Young and Dallas Wells talk about the best way to ask questions and what to do with uncovered information.

Podcast Transcript

Dallas: Hi, and welcome to The Purposeful Banker, the podcast brought to you by PrecisionLender, where we discuss the big topics on the minds of today’s best bankers. Dallas and Jim here as your host today. Thank you for joining us.

Jim: Today we’re talking about how to ask questions during a deal. That might seem obvious to you. You just ask it, right? Our COO, Brian Adkins, shared an article a couple of weeks ago that made us think about the best way to ask questions. Whether it’s during a job interview, a brainstorm, or a loan negotiation. We wanted to share our thoughts and some of the tips for asking better questions.

The article that Brian shared with us was from Time Magazine, at least Time online about two and a half years ago. It’s a comparison of questions from an interview, from two different interviews. One of the interviewers is Kevin Rose, founder of Digg, and partner of Google Ventures. The other one, and he’s interviewing SpaceX founder and Tesla head honcho, Elon Musk. Then the other interview is also with Elon Musk, but it’s done by Charlie Rose, veteran PBS, CBS interview host.

What we’re going to do here is I will read the Kevin questions the way he asked Elon Musk questions, and then Dallas will read the Charlie Rose questions. Then we’ll sort of reconvene after that to compare the styles on it.

Voice of Kevin… What led you into entrepreneurship? Was it something that you always knew that you wanted to be, an entrepreneur on your own, or did you stumble into it?

Dallas: Charlie’s version is: What are you doing in terms of planetary explanation?

Jim: Back to Kevin: Where do you come up with your best ideas? Are you on vacation? Do you wake up in the middle of the night, draw things down?

Dallas: Charlie’s is: How do you go about the design?

Jim: Kevin: When did you decide to get into computers and technology? Did you start coding, or was it a lot of?

Dallas: This is Charlie’s, which is my personal favorite: What do you think?

Jim: You can obviously spot the differences right away with this. Which interview would you think went better? Charlie Rose’s interview was the one that was more interesting, and it came across as, quite frankly, more professional. Charlie Rose is great at asking questions, and just getting it out of the way. In there, you notice he used really short, open-ended questions when he wants elaboration and short yes or no questions when he wants to be pointed.

Kevin Rose, and really, I don’t want to make it seem like we are getting all over him, because what he did is what pretty much all of us tend to do. He ends a question in the interview with a series of possible answers. Instead of performing an interview, which is asking questions, getting it out of the way, he’s sort of giving a multiple choice exam. He’s using up time where the interviewee could be talking. Not only that, the bigger thing is that he’s limiting the options that Elon Musk has for answering that, and that’s what makes the interview, quite frankly, less interesting.

Dallas: Yeah. It’s kind of leading the witness, which is something we all do. Even just in hallway conversations, it’s what are you doing for the holidays? Are you staying in town? Are you going somewhere? Do you have work? We try to fill these gaps, and it’s just, as human beings, we have a hard time ending sentences. We’re uncomfortable with being really short and terse, or we’re really uncomfortable with silence. We just kind of ramble until we trail off a little bit until the other person jumps in. Instead of a what do you think, we say do you think x, y, or z, and we try to give them some possible answers trying to simplify things up for them.

This actually comes up a lot when we hold lender strategy sessions. A lot of what we’re talking about there, we’re training on our software, but we’re also talking about how to use the software as a tool to really communicate with borrowers. We’re trying to basically fix some of these bad habits that the lenders have as well. For example, if a borrower comes into the bank, and they’ve got a competitive deal from one of the other banks in town, and what they’re really doing is they’re just shopping the deal. They’re hinting at some of the points of that deal and basically saying, “Can you do better?”

The lenders, that we’re trying to train, what we’re really trying to shape for them is how do you ask questions to find out what you really need to know about that deal, which is why are we still talking? What’s the pain point? Why are we still having a conversation if that’s such a great deal? What we try to teach them to say is just, “What don’t you like about this deal,” and then stop. There’s always that tendency to say, “What can we do better on? Is it rate, is it term, is it the collateral?” We try to lead them to the right answer instead of just shutting up and listening, and just asking the basic question, “What don’t you like?” Then let them talk. If you just wait, they will fill the silence, and you’ll get a heck of a lot more information about how can you help that customer, how can you solve the problem for them in a better way.

Jim: You make a really good point that often the way we add onto those questions is because as human beings, we’re not really fond of awkward silence. It’s understandable and again, ideally you don’t want to make things uncomfortable for your borrower, but it’s important to remember that that desire to avoid silence works on both ends. At the same time, the borrower doesn’t want silence, so if you can be a little bit patient. We’re not talking 45 second awkward stretches of staring blank.

Dallas: Just stare at them.

Jim: Right, exactly. If you could be a little patient, chances are highly likely the borrower is going to start filling that void with information. One of the examples we always use in some of the training stuff is, I’ve got a partial guarantee on this loan, and it’s from my father in law. Okay, maybe you wait an extra half beat and you get that, and yeah that guy is going to be lording it all over me at the golf course for the next six months on that. Now you’ve got a really important additional piece of information that if you had just immediately gone to the next thing.

I used to be in the newspaper business, and we used to talk about that as a technique. This was designed to be awkward silence, but it would be sort of the, “So, how did you embezzle the money?” The person responds with, “I don’t know what you’re talking about. I’ve never embezzled money.” Then you sit there and you stare at them silently for about 30 seconds, and a lot of times they’re just compelled to keep giving you, they protest a little too much and eventually they slip up.

There’s one other thing I wanted to mention on that, and then I want to talk to you about how this style of question asking can change a conversation within a bank. That is, it’s the, we’re talking about on the front end, don’t provide too much there. Leave it open ended. The other key part is, then before you ask your next question, make sure you’ve really listened to their answer.

Again, going back to that scenario of the guarantee. If you just go, “Okay, he’s got a guarantee from father and law” and move on, but maybe you hear a little something in there like, “Yeah, I’ve got a guarantee. It’s my father in law.” Now, if you’re really listening, you hear that tone, and now maybe that shapes your next question of, “Are you happy with that? Is that what you want? How does that arrangement work?” Now you’ve really, again started to move that deal in another direction.

Dallas, let’s talk a little bit about that, about this style of question asking, that open ending, how that can change conversation. We talked about it with the borrower, but within the bank as well.

Dallas: Yeah, there’s lots of places where it will work. There’s lots of conversations where it’s helpful. Even with borrowers, one of the other things that we teach lenders to do a lot is just to ask why questions. As you’re getting that feedback about a deal, try to figure out why they’re looking for it a certain way, and again, you’re looking for the real underlying value that they’re after.

The conversation would go something like asking a borrower, “What are you looking to do?” They’ll say, “I’m adding a new product line and I need to expand my building, so I want a 15 year fixed rate loan.” They come to you with a very explicit ask, something very specific that they want to do. Rather than just jumping right into that, say “Why are you looking for a 15 year loan?” It’s not always just about cheapest interest rate. A lot of times there’s some underlying issue there.

Maybe they say, “I want to make sure that I know what the payment will be.” Okay, “Why?” “This is a new product line and I won’t be cash flow positive on the new product for awhile. Bingo. That’s not necessarily the right fit for a 15 year fixed rate loan. There’s lots of other ways that we, as the bank, can better solve that problem. Maybe we do a floater that has some caps on the early years, so it’s really cheap up front, or maybe we do interest only for a year or two,

We can shape a better deal for them that solves that problem that they are trying to solve with a 15 year fixed rate loan. Most lenders, especially younger ones, their tendency is to just jump in and say, “Oh they want 15 year fixed, that’s what I got to do,” instead of finding out what the real issue is, so simple why questions, and then just stop and listen, and they will fill in that information for you.

Other places where it works is kind of some of the classic work interaction, so asking for feedback from your manager, and that one’s one of those, the more I’m uncomfortable the conversation is, the more tendency we have to lead them to answers. Is there something I could be doing better? Should I be doing x, y, and z? Instead of just saying, “Hey boss, what can I do different,” and then just stop. Again, they will fill in that information for you if you just wait, and are patient, and swallow that uncomfortableness for just a few seconds. Like I said, it’s not a 45 second thing. You don’t have to give them the creepy stare, just a beat, and kind of silence yourself, and you’ll be surprised at what comes back.

Same thing as if you’re managing other employees. Sit down and listen. We have, here at Precision Lender, what we call ESR, employee success reviews, because we have to have an acronym for everything of course. Really, these are just monthly meetings, and the agenda is for your direct reports, you just say, “What’s on your mind? What can I help with?” Then you just listen. We, as bosses, always have this tendency to, “I want to talk the whole time. I want to be the one that fills the silence and tell you all the things that I think should be happening, the way they should go,” stop and listen.

Where this came up, where Bryan really sent this around, and where a lot of the conversation happened was in interviewing for new hires. This is another one of those sort of uncomfortable situations, and just as a human being, you want to help them because you can, we’ve all been in that situation where you’re the one on the other side of the table, you’re interviewing for a job and it’s stressful. Our tendency to want to help them is we try to guide them to answers. We say, “Tell me a little bit about yourself. Tell me where you went to school, and what you’ve been doing, and kind of what you’ve been looking for in this role.”

I just shaped what your answer should be instead of how you really learn about a person is just say, “Tell me about yourself,” stop and let them tell you what they think is important instead of, “Tell me about yourself, but really what I want to know is an answer to three very specific questions, which I can read from your resume.” That’s what Bryan was after, and what we’ve tried to get better at with our interviewing, is just to listen and hear more, rather than, in our urge to be helpful, try to fill those silences.

Jim: Yeah, I just realized that I’ve been doing that all wrong on our interviews now.

Dallas: Yeah, well there you go. You learned something today Jim.

Jim: Dallas, do you think I’ve done a good job on this podcast? Do you feel like I’ve given questions, I’ve got the flow going all right, does my voice sound okay?”

Dallas: I think you’ve learned everything you can learn here Jim, clearly.

Jim: All right. That is all the time we have for today. Thanks to all you for again, taking the time to listen. Again, if you like what you’ve been hearing, make sure to subscribe to the feed for the podcast in iTunes, SoundCloud, or Stitcher. We love to get ratings and feedback on any of those platforms. You can always check out these episodes and our show notes at precisionlender.com/podcast. Thanks for listening. Until next time, I’m Jim Young for Dallas Wells, and this is The Purposeful Banker podcast.

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