by Nick Hedges, CEO & President, Leads360 Inc

February 3, 2012 — As many of you may have seen, we just announced a significant milestone in Leads360’s evolution, a $15M series B round from Volition Capital and Rustic Canyon Partners. We are very excited about what this means for our customers and partners as well as Leads360’s future and wanted to share the back story on the B round.

Why we raised the money?
Simply put, we are seeing unprecedented demand for our software, and want to capitalize on this by investing in building out our team, our product and our marketing efforts over the next several years. That’s because as our product offering and the market has evolved, what we do adds value to a quickly expanding number of companies.

Back in 2004, when Leads360 started out, our software was designed to help companies efficiently manage leads that they were buying from companies like LowerMyBills and LendingTree. Over the past few years we have seen a few things occur:

1. Companies that were buying leads have realized they need a better approach to manage all of their sales opportunities, not just internet-bought leads. Now more than half the leads we help manage are generated by the customer organically. 
2. A large number of companies that sell to consumers have realized that CRMs like Salesforce, Oracle and SugarCRM are extremely poorly suited to their needs. We recruit companies on a daily basis who are better able to manage their sales process with our software either instead of or alongside their existing CRM systems. 
3. Consumer sales organizations are far more successful when their sales platform is tightly integrated with their telephony systems. Our sales telephony platform, Dial-IQ, has been exceptionally well received by the market.

What made Leads360 a good investment opportunity?

We were fortunate to have many highly-regarded investors interested in Leads360. Here are a few of the things that made Leads360 a very attractive growth company.

Sales automation for companies that sell to consumers is a large and under-served market -Leads360 is the market-leading solution

In 2010, US companies spent approximately $35B on advertising aimed at generating consumer leads according to the Direct Marketing Association. Leads360 has the market-leading solution designed specifically to help these companies to convert those leads into customers.

Companies that sell to consumers need software that helps them track, interact with and convert their prospects. Unfortunately there are very few software solutions designed to do this. While there are a lot of companies that provide “sales automation” software that provides this type of functionality very effectively for companies that sell to businesses (good examples are Salesforce, SugarCRM and Oracle/Siebel); selling to consumers is very different. Big CRM is a bad solution for consumer and small business sales teams. In a consumer sale, due to short sales cycles and a need to work a much larger volume of prospective customers per salesperson, speed of response, tight sales process definition and multi-channel prospect nurturing are much more important than they are in the business-to-business sale. Unfortunately we see a lot of companies misguidedly purchasing a CRM solution and then spending a huge amount of time and money customizing the solution to handle a consumer sales process; functionality the Leads360 has right “off-the-shelf”. With our new funding we intend to generate broader awareness among companies that sell to consumers about how our products help their sales teams be more successful at converting consumers into customers.

 Our telephony platform (Dial-IQ) has created a huge amount of value for both us and our customers
At the beginning of 2011 Leads360 released a comprehensive outbound telephony solution called Dial-IQ. We saw the opportunity to build a more intelligent dialing system than any that had previously existed using the data we had access to in the sales automation platform to place calls at the appropriate time and from the most “qualified” sales rep.

Dial-IQ has exceeded our wildest expectations in terms of the value it has had to our customers and the number of customers we have gained as a consequence of the platform.

Our average Dial-IQ customer achieves a 77% increase in conversion within 90 days of turning on Dial-IQ and about a third of our entire customer base has already opted to use Dial-IQ as their sales telephony platform.

Large enterprise customers are adopting the Leads360 platform at an unprecedented rate
We have seen a very significant increase in demand for our product among Fortune 1000 companies over the past 18 months. This is partly due to a significant re-engineering effort on our platform to deliver the functionality that very large, often highly dispersed sales teams need to be more effective. What we have built is deeply configurable, highly scalable and easily integrated into a complex enterprise-scale technology infrastructure. We wish to pursue large customers with even greater vigor on both a domestic and international stage going forward. To that end we will be expanding our enterprise marketing and sales efforts considerably and building out deeper channel relationships as a consequence of the funding.

How we chose our new investors
We’ve had an outstanding experience with Rustic Canyon Partners whom we raised our $5.25M A-round from in 2007 and were excited but not surprised they were keen to participate in our B-round. In looking for our lead in the B-round we had a pretty tight set of parameters about which investors we wanted to raise money from.

• They had to have a singular focus on growth stage Software as a Service companies and
• We were looking for a clear track record of helping businesses cross the $100M revenue mark.

Choosing Roger Hurwitz from Volition Capital was a very easy decision for us. He brings an amount of experience to the board about what it takes to build a world-class SaaS business that we have come to recognize as being exceptionally rare.

What all this means
We have a product that is in a league of its own at automating and accelerating sales for companies that sell to consumers by phone and email. We are very excited to have the capital necessary to make that fact common knowledge and to continue building out our world class product, team and strategic partnerships.

Today is one of those days that we really take pride in at Leads360 because we were able to release new research into the wild.  Putting our latest study together took a lot of effort from many team members and required developing new proprietary processes just to collect highly accurate data.   After that comes all of the analysis, writing, design, and other associated hard work.  Today it’s available for you to read, use and enjoy. Download our new mortgage industry research.

Mortgage Lenders Fail to Respond to Customer Inquiries

New Leads360 Research Study Highlights Surprising Gaps in Responsiveness; 74% of Lenders Fail to Respond to Prospective Customers Promptly

LOS ANGELES, CA–(Marketwire – Aug 10, 2011) - Leads360, the industry leader in sales lead management software which serves over 2500 banks, brokers, and lending institutions, today announced the findings of new research into sales effectiveness in the competitive residential loan origination market. This new study, entitled “Leading Mortgage Lenders Keep Prospects Waiting,” outlines how major mortgage lenders are failing to promptly and persistently respond to valuable new loan inquiries.

Leads360 studied the inquiry response patterns of large lenders and compared their ability to promptly respond to new prospects by phone and email as well as the companies’ ability to thoroughly follow-up with leads over time. “Mortgage leads are valuable and extremely time-sensitive with hundreds of companies potentially competing to offer a very similar loan,” said Nick Hedges, President and CEO of Leads360. “We were shocked to find most lenders so cavalier about responding to loan inquiries. This research shows that there is a very clear opportunity for lenders to improve their customer responsiveness, originate more loans and better serve their customers, their communities and their shareholders.”

According to the study, 74% of lenders, including leading mortgage originators JPMorgan Chase, CitiMortgage, and GMAC Mortgage, failed to call prospective customers within 24 hours of their initial inquiry. In general, lenders averaged more than 6 days to call a new loan inquiry and more than 50% of lenders failed to make more than a single attempt to call the leads they received. “Lenders should measure response times in minutes or seconds, not hours or even days,” said Mr. Hedges. “Lenders that continue to ignore the basic tenets of sales and customer service in the internet era will be destined to underperform compared to peers and competitors that have implemented the appropriate technologies and processes to compete at the speed that consumers expect.”

The new study, “Leading Mortgage Lenders Keep Prospects Waiting,” is available for download at Leads360.com. See how each of the following companies performed across four key metrics and benchmarks:

• Ameriprise Financial, Inc.
• Branch Banking and Trust Company, a subsidiary of BB&T Corporation
• JPMorgan Chase Bank, N.A. a subsidiary of JP Morgan Chase & Co.
• CitiMortgage, a subsidiary of CitiGroup, Inc.
• Flagstar Bank, a subsidiary of Flagstar Bancorp, Inc.
• GMAC Mortgage, a subsidiary of Ally Financial Inc.
• HSBC Mortgage Services, a subsidiary of HSBC Holdings plc (ADR)
• Huntington National Bank, a subsidiary of Huntington Bancshares Inc.
• Key Bank, a subsidiary of KeyCorp
• MetLife Bank, N.A. a subsidiary of MetLife, Inc.
• OneWest Bank, FSB
• PNC Mortgage, a subsidiary of The PNC Financial Services Group, Inc.
• Provident Funding Associates, L.P.
• Quicken Loans Inc.
• Regions Mortgage, a subsidiary of Regions Financial Corp
• SunTrust Mortgage, Inc. a subsidiary of SunTrust Banks, Inc.
• U.S. Bank, a subsidiary of U.S. Bancorp
• Wells Fargo Home Mortgage, a subsidiary of Wells Fargo & Company

About Leads360
Founded in 2004 and headquartered in Los Angeles, Calif., Leads360 develops software-as-a-service (SaaS) solutions for managing sales leads. Distinguished by its focus on solutions that address the unique needs of businesses who sell to consumers, Leads360 is recognized as a market and technology leader, managing more than 40 million leads for over 5,000 clients. With a suite of solutions scaled for enterprise sales organizations as well as small businesses, the company offers the industry’s most comprehensive and configurable lead management platform.

Leads360 enables companies to distribute, track, analyze and convert sales leads using a customizable lead management workflow. Professional services, including training and sales process consulting, are also offered to deliver a highly effective solution for converting sales leads. Businesses look to Leads360 for solutions that allow them to maximize their investment in leads generated both online and from traditional sources, and ultimately increase sales closure rates for greater revenue. To learn more about Leads360, please visit www.leads360.com.

Follow Leads360 on Twitter: www.twitter.com/Leads360.

Last night I did my first radio commentary on the Sales Lead Management Radio show. I think it went well, but I didn’t have any live feedback, so I’m not sure. Here are the recording and the transcript.

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Good afternoon. My name is Jeff Solomon. I’m the founder of Leads360; lead management software for B2C companies. I’m pleased to be participating in this radio program today and want to thank Will for having me back on.

Today I’m going to talk about B2C vs. B2B sales. And I’m going to ask the question, what’sthe difference, and why does it matter?

I’ve got 7 minutes, so here goes.

A leads a leads a lead right? It doesn’t matter if you sell Snuggies to couch potatoes or network firewalls to Fortune 500 companies; if someone is interested in your product, they’re a lead… right?

Yeah, I guess that’s true, but there’s a big difference between consumer leads and business leads. And when it comes to the tools you use to manage your leads, there’s an even bigger difference.

So I guess the answer to my question is, no, leads are different; and yes, it matters what you’re selling to them.

Ask yourself these seven questions which are applicable to both in B2C and B2B sales; and then let’s compare the differences.

1. How fast is your sales process? How long does it take to convert your leads? A day, a week, a year?
2. How many people are involved in making the decision to buy your product?
3. Are the products or services you sell straightforward or ultra complex?
4. How many leads do each of your sales people get every day or every month?
5. Does emotion play a role in the buying process for your customers?
6. Are you selling big ticket items or simple widgets?
7. Are the things you sell pretty much the same or can they be customized?

Ok, so let’s go back to my example from before, the Snuggie vs. the firewall;

1. Speed of the Sales Process

• Suggies are a one call close; “hi, are you ready to buy, yes, great, give me your credit card…
• Firewall, “oh, you’re interested in a firewall, we better have a discovery call first… and this is gonna take a while.”

1. Number of Decision Makers

• Snuggie, just one dude on his couch eating potato chips
• Firewall, CTO, CIO, IT Manager, Director of Technology, Procurment, etc.

1. Simplicity of the Buying Process

• Snuggie, come on, it’s a blanket with arms, enough said
• Firewall; when was the last time you tried to configure a Cisco product, forget about it?

1. Quantity of Leads

• Snuggie, one 5 minute spot generates thousands of inquires
• Firewall, “what, we did that whole tradeshow and you only got 5 leads?”

1. Role of Emotion

• Snuggie; “gosh that looks comfy; I sure would feel a lot better about not going to the gym if I was hanging out in that thing all day.”
• Firewall; [ROBOTIC] “Yes we need a firewall, it must do X, Y and Z or it won’t be effective for our needs…” you get the picture.

1. Value of the Sale

• Snuggie; $9.99 Bam!
• Firewall, um, thousands of dollars… hundreds of thousands of dollars?

1. Uniformity of the Offer

• Snuggie; “well we’ve got red, blue, green and cowprint”
• Firewall; bells and whistles galore

Alright, I think the difference is pretty clear, so how does all this apply to the tools I we use to manage leads? As long as I have lead management software, I’m all good, right?

For those listeners who are on the solution provider side, like me, you might be slightly blinded by the fact that we all call our solutions the same thing; and we expect clients to understand what we mean. When Marketo and Eloqua say “lead management” they mean one thing; but when Leads360 or LeadMailbox say it, we mean a totally different thing. Even companies like Salesforce, Constant Contact, TargusInfo, and all these other guys have a totally different definition of lead management; jees, it’s become such a ubiquitous term I don’t even know what it really means.

Going back to those 7 characteristics of sales and marketing again. If you think about it, the difference between selling Snuggies and firewalls is so significant it just makes sense that the sales tools would be different as well. And that’s the truth, they are. That’s why when companies say “we do lead management” it’s true… and it’s not true.

Let me break it down a bit more. If the speed of your sales process is quick you need tools that are velocity driven, that focus on repetition and consistency. Things like auto dialers, sophisticated lead routing and configurable workflow engines. If the process is much slower you might need something to monitor the website behavior of your prospects does to gauge where they are in the buying cycle.

When there are a lot of decision makers in the process you need a system that allows you to create an org and attach a bunch contacts to it.

When the buying process is pretty simple you might need a scripting tool or a pre-defined sales workflow. And if it’s much more complex then you probably need detailed product documentation, use cases, demos, vides and all that jazz.

Got a lot of leads, you need a system that can prioritize them for one by one follow-up; in other words, “just tell me which lead to call next”.

If emotion plays a role, then maybe you want to do some type of skills based routing to align Joe the couch potato with the sales rep that has actually seen every episode of the Honeymooners.

Cisco firewalls can be pretty pricey; if you’re selling expensive stuff be prepared to build customized pricing proposals and business cases. If Joe simply needs to skip one meal to pay for the cowprint Snuggie, well he’s probably pretty used to that.

And if the only customization you offer is what color to choose, you won’t need a sales engineer with shared access to the record in your CRM.

So the moral here is – know what you sell. Understand specifically what the problems you need to solve are. Look at your sales process and ask yourself the questions I posed in this commentary. And then find solutions that align with those needs.

When it comes to sales and marketing, there just isn’t a one-size-fits-all solution out there; sorry Salesforce.

I think the best companies you’ll run into know what they’re good at and know what they’re not. Staying focused, even if that means having a slightly smaller market, allows you to be the best. And when it comes to finding solutions to help you maximize sales, why wouldn’t you want to the best?

And that’s all I got.

People often ask me what the difference between CRM and Lead Management is. One way to look at the comparison is with an analogy I like to reference from the 1912 summer Olympics in Stockholm. The winner of the decathlon was Jim Thorpe. He had the best overall scores javelin, shot put, hurdles, dashes, high jump… a bunch of track and field events. The King of Sweden, King Gustav the 5^th, was so impressed by Jim Thorpe, he said, “You, sir, are the World’s Greatest Athlete.” And he was.

That said, somebody else had the best times in each of the individual events. Jim was the “generalist” and someone else was the “specialist” in each of the individual events. In fact, in every track and field event the world record is held by a specialist not the decathlete. That’s CRM; it’s the generalist. It’s good for a lot of functions, but it’s not great at any one thing. When it comes to converting sales leads into customers, if you want to achieve the best results, get a specialist, get lead management. Get Leads360.

I did a great webinar about this a while back, check it out here.

At our recent presentation at the 2010 Leadscon show I discussed some common challenges related to lead distribution. I used some funny use case videos to illustrate the point, you can see them here; but I also used this slide in my PowerPoint presentation.

On first glance this probably looks pretty overwhelming, but it’s actually pretty incredible. I say that because some of our clients actually using Leads360 to do all of this. You can imagine how nearly impossible it would be to manage without a sophisticated lead distribution engine. Let’s look at what’s going on here.

• New leads are getting routed by state to different teams
• Some leads are going to a qualifying team
• Leads that aren’t called fast enough are getting recycled to other agents and leads that are  not contacted after 6 attempts are going to a shark tank
• There are filters to restrict agents from ever getting leads in areas they aren’t licensed for
• Some leads are going to management for approval
• And so on…

If you can think it up, we can make it happen. Yes, our lead distribution engine is that powerful.

When CRM and SaaS first started it was all about customization. Look at Salesforce.com or RightNow Technologies; both are web-based CRM software that is customizable beyond anyone’s imagination. I think this has been, and continues to be a big selling point for them. Think about it. Your pitching a powerful CRM system and you say to the client, hey, this can be customized to your exact business needs. Sounds great right? For a long time this was major selling technique for Leads360 as well. In fact, if you compare our lead management platform with just about any other B2C LMS on the market, you’ll see we have a much more configurable product.

Well its true, customization and configuration are benefits and we’ve certainly seen sales from it. But the tide is shifting and more companies, especially small and medium sized businesses are looking for pre-configured best practices. We get this question all the time; “hey, just tell me what my competitors are doing that is working and I want to do the same thing.” They don’t want to re-invent the wheel and they certainly don’t want to pay big bucks to some CRM consulting firm to customize Salesforce.com for them. This is a path we’ve been forging for some time. Not only do we give our clients best practices workflow templates to start with, but we continue to enhance the configuration based on feedback, research and analysis of what REALLY works. And believe me, some things work really well and some things don’t.

In the coming months we’ll be releasing more on this, both in terms of better templates and in the research reports we’ll be compiling. Stay tuned.

CRM’s (Customer Relationship Management) are designed to provide lead management solutions and there are various CRM software packages to choose from. Whichever lead CRM software you choose to manage your marketing efforts (RightNow, SalesForce, Leads360, SAP, Microsoft,etc.),  it’s important to understand that they all require regular management and upkeep. In order to be effective the CRM software implemented must be customized to fit your particular company’s needs and goals.

An effective CRM software is designed to automate sales, track lead origination, rate the value of each potential customer and ensure constant contact with your clients. However, even if your company is using the most reliable and efficient leads management software that performs all these tasks, if poorly managed your ROI of this software will greatly suffer.

Regardless of which software you choose, time must be invested in setting up your account and ensuring the software is customized to meet your company’s goals. You must configure into your account how much you pay per leads, your desired cost per acquisitions goals, and the ROI of various marketing efforts of your company. In order to achieve the highest ROI of this software it is important that you learn to fully utilize its features.

“Most reports cite that a whopping 42% of CRM systems go completely unused after purchase, a sobering statistic given that CRM sales topped 9 billion in 2008.”

It’s imperative to know what features your leads software package provides and how you can use these features to your advantage.

We’ve created a Whitepaper titled “8 Reasons CRM Fails to Deliver“. It analyzes and explains various reasons customer management systems fail to meet expectations, and provides an easy way to assess if CRM is right for your business.

Whitepaper Topics
1. CRM is Complicated
2. CRM is Labor Intensive
3. Buying More than You Need
4. Turn-Key CRM does Not Exist
5. CRM is More Expensive than You Think
6. It is Hard to Quantify Success
7. Success is Driven by Your Company 1st & Your Software 2nd
8. Know the Problems you are Trying to Solve

You can Download the Full Whitepaper Here

About a month ago we launched began beta testing our new de-duplication management solution within Leads360. Like most of our solutions, we developed a very sophisticated and flexible de-duplication engine that can identify, merge and act on duplicates in real-time. Today we turned on the capability for our own sales team and I’ve begun using it. There are a number of uses cases where de-duplication management is useful. For some of our clients, it’s a way to identify duplicate leads sent by the same lead provider. In other cases, our clients don’t want to pay for a lead that they’ve already generated through their own website. Another use case could be simply merging multiple inquiries from the same customer. For our own sales team we use in this way:

1)       A prospect comes to the site and submits a lead

2)       Sales person speaks with the prospect and determines they are not ready to buy, changes lead to nurturing

3)       A month later the prospect comes back to the site after seeing a banner for a sales lead management whitepaper and downloads it

4)       A duplicate lead is generated

5)       De-duplication management catches the lead automatically before it gets distributed to another sales person

6)       The new lead is merged into the old lead, so all the new contact information is made available along with the original lead data

7)       The original sales person is alerted by an email that the prospect has come back into the pipeline and to follow-up

What is your challenge when it comes to duplicate leads? How do you solve that right now?

The enterprise platform space has been crowded for a long time, but Salesforce’s AppExchange platform model has been allowed to reign relatively freely, until recently. Today Erik Schonfeld blogged that Intuit has announced that they are opening their Quickbase platform to developers for small business applications. Intuit joins a growing list of enterprise platform contenders including big dogs Google and Salesforce. Read the article here.

So what? Well here’s the what. Competition in this space is very interesting because of three main factors:

1. As the competition and interest in “cloud” application platforms increases, and the number of big players increases, the more development interest will be generated overall. Why? If the largest and most successful software companies are getting into this game, it’s going to be a game worth playing for many developers. The ability to reach large customer bases, almost overnight, will be irresistible for many.
2. As the number of competitors increases it creates confusion in the marketplace as developers are unsure which platform will best suit their objectives and their target market. This is especially vital in the B2B world as business systems are often asked to smoothly integrate with one another. Suddenly the risk of being on the “wrong” platform is increasing drastically.

3. The “closed vs. open platform” factor. The interests of the developers and the interests of the platform-hosting companies are almost diametrically opposed, even thought they can profit from the same customers. Developers benefit from easily portable platforms where they could host their aplications on any of the platforms, quickly transition from one platform to another, and potentially run the same application on multiple platforms. In contrast, the platform-hosting companies want to lock in their developers and create a closed system, where by it forces users and developers to stay loyal to it’s platform–otherwise the model self-destructs.

How will it all shake out? How does this news impact the Lead Management space? Time will tell.