The 2010 AdTech show in San Francisco was a hotbed of on and offline marketers primarily for B2C companies. Quite simply, there is no shortage of companies that will take your money and drive clicks and maybe even leads, but do they really care what happens after that? I’m not sure that they do. In speaking with nearly a dozen marketing service providers, that incidentally offered only a slightly varied product, I found a sharp lack of concern about conversion. Well, I shouldn’t be that harsh, they care, but not that much.

Obviously if you ask about how well traffic converts, of course you can’t beat it. But in my experience the real test of quality comes in how much effort the marketer is willing to put into conversion after the lead has been generated. That means they need to care about what their clients actually do with the clicks or leads. That means they need to care about a part of the process they don’t make money from. Of course, any shrewd lead generator knows that when clients get better at this part of the process, they buy more leads; just ask Matt Coffin from LMB. But everyone I spoke to at AdTech didn’t give a “#%!!@$&” about it. Some were even quite vocal about it.

It’s sad. For us it’s sad because we aren’t likely to get referrals for their clients to use our lead management software. I can pretty much guarantee they will convert more leads and subsequently spend more money, but why would they want that. Somehow the success of the lead generation industry, and it’s embracement of lead management software hasn’t quite permeated to online marketers at large. Maybe it’s no surprise that all the lead generators decided to stop participating in AdTech; maybe AdTech is still stuck in the 90’s.

The path to a successful sale is fraught with obstacles. Not a few of which are inside our own heads in the form of assumptions and erroneous beliefs.

Before we wave our fingers at the salespersons’ tendency to favor the quick close and not follow up on leads well, let’s first acknowledge that this behavior is commonplace for a reason. It makes sense. And in a world without a dedicated Lead Management Solution, it may actually be considered a best practice. What behavior am I talking about specifically? Salespersons are ‘hooked’ on the quick close. If one lead in a hundred is the one that is going to close quickly, why would you spend time on the phone with the ones that aren’t? Since the salesperson’s skill set and experience equip them to recognize when they have a lead on the line that they can close, why wouldn’t they just keep burning through calls, until they get that feeling that they have a ‘live one’ on the line? Wouldn’t you? Choosing a path other than this would mean that the ‘live one’ winds up on the line with one of the other salespeople.

Three obvious problems with basing your sales approach around the quick close are:

1. There is a margin of error. The lead may be a ‘live one’ that can be closed, but the sales agent can’t see it
2. It ignores the fact that 40-50% of leads will eventually close, even if they don’t close right away
3. Slow closing leads represent 77% of total sales

If those pieces of data are not persuasive enough, consider one even more critical fact: It’s not necessary to choose one or the other. With Lead Management Software, salesmen do not have to choose between chasing the quick close and nurturing leads. By using Lead Management Software, Salesmen can turn and burn calls, while funneling leads that are not quick closers into a nurture cycle.

A lead nurture cycle serves as an automated bidirectional reminder.

• It sends emails to the lead: “Don’t forget about this company, this sales agent, when you’re ready to buy, we’ll be here!”
• It sends reminders to the Salesman: “Don’t forget about this lead, when they’re ready to buy, you have to be there!”

Research in neuropsychology shows that one way the human brain organizes information is by retracing the steps that lead to a desired result and trying to replicate them. Your sales agents have for so long gotten positive results by working according to the old rules: Burning through calls as fast as they can to get to the one they can close. And Lead Management Software doesn’t require that sales agents ‘learn a new way to work’. Instead, it harnesses the sales agents enthusiasm for connecting to new leads while automating the more easily overlooked tasks of following up with leads that are not immediate closers.

The new lesson that salespersons are learning while using Lead Management is this: There are a lot more deals to be closed outside of that fish that just flops into the boat.

Most companies have already done the math to figure out the monetary value of a lead. They have determined how many leads it takes to obtain a sale and what’s the most they are willing to do for a lead. However if leads are the life blood of your website and business, than you realize there is more to a lead then just monetary value.

If leads are down, sales are down, company moral is down, business is down and everything in turn starts to take a toll.  Alternatively, if leads are coming in and sales are closing, your business is successful.

This is why we must treasure every lead generated. We need to secure our best lead sources and properly track the status of each and every lead from source to sale. Our Call Attempt Study helps you understand why you should contact your leads more often. Our lead management software can help you manage leads and can automatically sort and route leads for you. We also have lead management videos and webinars to help encourage you to track every lead, good and bad, as well as teach you how to convert more leads to sales.

If leads keep your business running, than managing them efficiently and diligently will not only increase your overall conversion rate and ROI, but improve your overall business’ success and future.

You hire a sales team to do one thing, Sell. All too often, managers frustrated with their ROI, tend to go to what they think is the root of their problem, their sales department. Who could blame them though? Going through their checklist they think they are doing everything they can to convert the most sales. Adequate lead generation quantity? Check. Quality Leads? Check. Target market Research? Check. So it must be the sales team’s lack of effort right? WRONG. In today’s market, ensuring those items on the list only takes you half way there. Your company needs to maximize the potential it already possesses by creating an environment that is conducive to selling. Lead management technology in conjunction with tools like predictive dialing, create the best environment possible for your sales team to SELL. Think about how much time is wasted dialing people, waiting for them to pick, leaving a message, and then hanging up. With tools like predictive dialing, hundreds of numbers are automatically called and then routed to sales people once a lead answers the phone. This allows more time for sales people to properly engage the lead and make the most of it.  With all the extra time saved from the predictive dialer, an environment is created that maximizes performance and encourages success. Click to view  Leads360 and Five9’s whitepaper. 1+1=3

Here’s what our own Nisheeth Singh had to say about the study:

As you may have read on Lead Critic today, we released our newest research regarding the impact of call frequency on sales lead conversion.

To misquote a famous author: “Elementary, my dear Watson”. Sir Arthur Conan Doyle’s written works never actually saw this phrase although the first and second parts of the phrase were seen in close association during conversations. But I digress.

As many of you opined above and is the central premise of the paper (found here), sometimes the most obvious and logical actions are never taken by lead buyers. I don’t necessarily understand why they don’t but I do revel in the fact that it means significant upside for those that choose to engage with their leads smartly.

We conducted the study based on several million leads that our clients tried contacting over a period of many months to have as diverse a data set as possible. We studied the effects of multiple call attempts all the way to 20 and I’ve published the entire results of our study below just to whet your intellectual curiosity. Some explanation is in order:

* Column 1 denotes the call attempt

* Column 2 denotes the percentage of ‘Contactable leads’ contacted – this is key to understanding the study and is NOT the same as Contact Rate. This means that the data set excludes any leads that were never contacted. This metric is a percent of the remaining leads in our study which we define as ‘contactable leads’

* Column 3 denotes the percent improvement in the ‘% of Contactable leads contacted’ metric for each successive attempt over the very 1^st call attempt

* Column 4 denotes the percent improvement in the ‘% of Contactable leads contacted’ metric for each successive attempt over the preceding call attempt

Contact    % of Contactable   Improvement       Improvement over

Attempt   leads contacted    over 1st attempt    preceding attempt

——————————————————————————

1                              39%

2                              72%                        87%                        87%

3                              83%                        114%                     15%

4                              88%                        128%                     6.5%

5                              91%                        136%                     3.4%

6                              93%                        141%                     2.1%

7                              95%                        145%                     1.5%

8                              96%                        148%                     1.1%

9                              96%                        150%                     0.8%

10                           97%                        151%                     0.6%

11                           97%                        152%                     0.5%

12                           98%                        153%                     0.3%

13                           98%                        154%                     0.3%

14                           98%                        154%                     0.3%

15                           98%                        155%                     0.2%

16                           99%                        155%                     0.2%

17                           99%                        156%                     0.2%

18                           99%                        156%                     0.1%

19                           99%                        156%                     0.1%

20                           99%                        157%                     0.1%

As you can see, the benefits of calling start trailing off pretty steeply after the 5^th or 6^th attempt, we chose to prescribe 6 attempts as the cut-off. I beg to defer with LeadCritic in that this is a very statistically relevant study with a data set this size and of this heterogeneity, at least at a high level. I do agree though that to get maximum benefit from a study like this, one should conduct the same study but specifically for their own sales team to understand the effect of call attempts on their contact rate.

Cheers!

Nisheeth Singh

Director of Strategic Intelligence, Leads360

A price has been put on the potential Fannie and Freddie bailout. The price tag could be as much as $25 billion. It is not a fait accompli, however. Peter R. Orszag, Director of the nonpartisan Congressional Budget Office put the odds at better than half that Fannie and Freddie will not use need any cash. Critics of the bailout maintain that homeowners should be the first to benefit from any taxpayer help. But if it is approved by congress, restoring confidence to investors in the U.S. and internationally is the bailout’s aim.  We will continue to closely watch the developments at Fannie and Freddie along with our mortgage broker and mortgage banker clients.

DoublePositive has announced a bevy of new products aimed at providing increasingly customized hot-transfer leads for their clients.  The new products include:

PositiveExpress ARM – Hot leads facing an ARM reset.

Name-Your-Filters – Hot leads can now be filtered on the fly just as you would filter traditional leads in Leads360.

Name-Your-Script – This is certainly the most premium hot transfer lead availible.  DoublePositive will customize the leads as well as the contact and qualification process, just for your company!

Visit DoublePositive to learn more.

When dealing with internet generated mortgage leads, the typical agreed upon conversion rate is between 1.5% – 2%. At this rate you can and should be profitable. Of course we’ve seen many clients that are converting much lower and we’ve seen some that convert quite a bit higher. One of the unique aspects of internet leads, in particular mortgage, is that they are often generated once and sold 3-4 times. This is pretty typical and widely accepted by the market. This practice however is the root of what I call the conversion conundrum. That is, even though the industry average for a mortgage lender to convert an internet lead is 1.5% – 2%, the actual average conversion rate of an internet consumer is actually 4.5% – 4.75%. That’s a 2-3% spread in the conversion rate. The reason for that is if a consumer goes online and submits their information as a lead to LowerMyBills.com for example. That lead is then sold to 4 mortgage lenders. Only one of those four companies can actually close that lead and if you calculate the conversion rate across all four lenders, it comes out to about 1.5% – 2%. But, when you calculate the actual conversion rate of that consumer, not taking into account which lender they chose, the internet consumer actually converts at about 4.5% – 4.75%. Interesting right?

Let me put it another way. If there is a 3% gap between conversion rates as I described above, what does a lender have to do to access that increase in conversion? That 3% is won purely by the behavior of the lender. In other words, the difference between the 1.5% and the 4.5% is the activity that a lender does when they get a lead. It’s about how fast they call that lead and how many times they follow-up.  It’s about what offers they give, what the loan officer says on the phone and so on. It’s all about the behavior of the lender after the lead has been given to them. That’s 100% controlled by the lender, not by the quality of the lead. So if a lender wants to reap the spread, they need to improve the behavior. That’s where we come in. We give our clients the tools and the training to get that extra 3% conversion and squeeze out the competition.

So, when we talk to mortgage lenders about conversion, and that’s really all they care about, we typically say shoot for 1.5% – 2%. But now, we tell them there is a 3% conversion spread just waiting to be grabbed. It’s all about what they do with the lead and we’re here to help them do it.

Image courtesy of GapingVoid 

Anyone in the “Lead Ecosystem” knows that it is a complicated world. 

Lead Providers have a complex formula for generating, pricing, filtering, and distributing leads, in addition to all the integration headaches of providing leads to customers by email, spreadsheet, or through one of many Lead Management Systems.

Meanwhile Lead Management companies have to work with the Lead Providers to make their mutual clients as profitable as possible, while keeping everything running smoothly.  Lead Management companies have to work with hundreds of lead providers, client self-generation and importing of leads,  and exporting those leads to a 3rd party software, such as a Loan Origination System or a client management system.

As convoluted as life is for Lead Providers and Lead Management companies, it’s worse for clients and consumers.

Companies that buy leads, use a lead management system, and otherwise integrate their operations with the “Lead Ecosystem” have a steep learning curve to contend with.  Companies which are used to doing in-house marketing, generating their own leads, gathering referrals, and distributing them on paper, suddenly have to contend with managing multiple vendor relationships–which are all intertwined.  Also successful Lead Buyers have to adjust their workflow and sales process to fit the requirements of working with Internet leads.  That is a lot of learning that a client has to do, before being able to reap the benefits of the Lead Ecosystem.

Consumers often have it the worst.  Consumers have little or no idea about what happens to their data when it is submitted to a lead provider.  They are often totally unprepared for the sales process which they will be exposed to, uneducated about the products which they are interested in, and unequipped to make intelligent decisions.   An unqualified, paralyzed, traumatized, frustrated, or otherwise unreceptive consumer is always going to be the toughest sell.

How do we simplify the Lead Ecosystem for everyone involved?

If you’ve been in or around the military, you’ve probably heard this before.

Improvise, Adapt, Overcome.

This has been adopted as an unofficial motto of the US Marines, and many of you may remember hearing Gunny Highway say it in Heartbreak Ridge. The Marines used to be the bastard child of the armed forces. Heck, they were conceived in a bar in Philadelphia one evening, and got Army hand-me-downs. But, they made it work, they improvised, they adapted, and they overcame to become arguably the most feared military force the world has ever seen. I’m starting to hear my friends in the mortgage industry say this more and more often these days. Improvise, Adapt, Overcome. What does this mean to you?

To me it means a lot of things. Specific to this blog, it means finding what works, and doing it until the whole notion of IAO becomes second nature. What worked last year does not work this year, and what works now is a radical departure from what worked last year, to most. What have you done to improvise, adapt, and overcome?

I can tell you what Leads360 has done. We’ve changed our entire model for the most part. We’ve brought on talent from several different aspects of the mortgage industry; those who have run successful shops, those who have worked with lead vendors, and those who have worked on the front lines doing loans. We’ve had to adapt to the current market and overcome monumental obstacles. We’ve done so and continue to do so. Understanding that you are currently doing the same, we’ve prepared a series of Best Practices for you, for 2008. We know what improvisations and adaptions need to be made in order to overcome. Give us a call, shoot us an email, or stop by the office. We want to help you IAO.