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.

For those who missed it, the outrageously well-funded online real-estate “start-up” Zillow opened the doors on its Mortgage Marketplace this week.

It’s a very interesting model and one that has the potential to cause a mini-revolution in the mortgage lead industry. Why? Primarily because they are handing out free leads to almost anyone who wants them. This is how it works:

For the lender:

• The lender signs up and pays a $25 sign-on fee
• Zillow verifies that the lender is bonafide
• The lender is ready to start receiving “free” leads

For the buyer:

• Complete an online form
• Start receiving quotes from lenders by email

So why is this revolutionary, apart from being free? First off, the consumer is anonymous. This means the lender is quoting purely based on the accuracy of the information the buyer submits which for many brokers is going to be a fruitless exercise – how many times does a consumer inaccurately quote their credit score? Anonymity does have the advantage that the buyer cannot be inundated with calls. Conveniently for Zillow, the only way for a broker to contact them is through, uh… Zillow. Secondly, the lead is available to a huge number of lenders (over 1,000) which will inevitably drive high levels of competition. Finally, just like with eBay, the consumer gets to rate the buyer and every other potential customer can then see that broker’s rating.

So will Zillow Mortgage Marketplace be successful? I think moderately so. After all, after just 3 days, Zillow already has over 1,000 brokers registered and has generated 7,894 leads. However, I definitely do not think that the model will replace the current online lead generation model. Zillow will be good for consumers; it will drive super-low quotes. Unfortunately, this model probably favors a broker without much of a real-world reputation. Someone who is prepared to bait and switch an aggressive quote for a realistic quote and that can take a hit on their reputation if the scorned consumer gives them a bad rating. But we shall see. This type of innovation has transformed the travel and hotel industries among many others. No doubt a segment of the market will also be attracted to this model in the mortgage space.

Today we announced that Ed Ojdana, the former CEO of Experian Interactive and founder of ConsumerInfo.com, has joined the Leads360 Board. We are excited to have Ed’s considerable experience and insight to guide us. Click here to read the press release or click here to download a pdf version.

If you are attending Leadscon this week, don’t miss Ed’s keynote address tomorrow. We’ll see you there.

No one who has been paying attention to the mortgage implosion would be surprised by today’s New York Times article about KPMG.  Accounting firms have clearly been complicit in allowing lenders and banks to mask the risks of mortgage packages and mortgage-backed securities.  But, this is nothing new.  As we saw with Enron, WorldCom, and myriad other examples of corporate malfeasance, accounting firms often act in the interest of the current management of a company, rather than in the interest of long-term shareholders, employees, or even common sense.

Here are some highlights:

KPMG, one of the Big Four accounting firms, endorsed a move by New Century Financial, a failed mortgage company, to change its accounting practices in a way that allowed the lender to report a profit, rather than a loss, at the height of the housing boom, an independent report commissioned by a division of the Justice Department concluded.

The 580-page report documents how New Century lowered its reserves for loans that investors were forcing it to buy back even as such repurchases were surging. Had it not changed its accounting, the company would have reported a loss rather a profit in the second half of 2006. The company first acknowledged that its accounting was wrong in February 2007 and sought bankruptcy protection less than two months later as its lenders stopped doing business with it.

The profit was important because it allowed executives to earn bonuses and convince Wall Street that it was in fine shape financially when in fact its business was coming apart, the report contended. But the report stopped short of saying that the company “engaged in earnings management or manipulation, although its accounting irregularities almost always resulted in increased earnings.”

Read the whole story here.

We live and breathe lead management but we often run into prospects and partners that seem a little lost when they try to get their heads wrapped around what we do. It’s not their fault. Lead Management is still a new world and the basic concepts are just starting to get some mainstream business penetration. Leads360’s own Noel Collins has written his first post in a multi-part series explaining how to evaluate a Lead Management Software or Solution. Please visit Lead Critic to check it out.

People, you heard it here first, okay maybe second, or third, but you heard it here nonetheless. As of now, you should be marketing to all of the old leads in your database so you can capture business that you missed out on in the past. There are strategies to make you successful doing this, they are called Best Practices, and we would like to share them with you.

I like to call times like this “Found Money” times. There is found money sitting in the lead manager of every mortgage company out there, no matter what kind of system you use. Whether there is a stack of old leads piled up in a filing cabinet, or whether you are using the best and most sophisticated lead management system on the market, if you play your cards right, you will come out with a BIG W.

Below is a table of new FHA limits. Take a look at it, then get to work. If you need help, just ask.

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.

TechCrunch points us to more news about the growth of internet advertising:

Two reports are out today on the size of the Internet advertising market. The Interactive Advertising Bureau has a preliminary estimate of $21.1 billion for U.S. Internet ads in 2007, a 25 percent increase over 2006. (For the fourth quarter of 2007, it is estimating $5.7 billion for the size of the industry, up from $5.2 billion in the third quarter).

Meanwhile, the Kelsey Group puts U.S. Internet advertising at $22.5 billion for 2007 (IDC, as previously reported, is at the high end with $25.5 billion). Click here to read more.

Many lead providers, like LowerMyBills and Adchemy, rely on mainstream internet advertising, primarily Pay-Per-Click and Banner Ads, and these mediums will become increasingly expensive in the future.  However, ad-heavy lead providers are already experts in optimizing the media and may have enduring advantages into the future as other industries and advertisers start stepping into their space.  Others, like LendingTree, that rely heavily on traditional advertising, may benefit from the migration to internet media by other traditional advertisers.  SEO-focused lead providers are relatively unaffected by this continuing shift in the internet advertising landscape.

Leads360 CEO Jeff Solomon recently joined David Schneider, founder of ZipSearch!, and Mike Ferree, founder of LeadCritic.com and Marketing Guru at ZipSearch!, for a great podcast about the benefits of using a Lead Management System.

Lead Generation companies like ZipSearch! are increasingly pushing their clients to use Lead Managment technology to get the most from their leads. You have heard it all from us before but it’s nice to get the perspective from the Lead Generation side. We look forward to future installments in this series.

You can find the podcast with Jeff on the frontpage of ZipSearch.com this week, and it will later be moved to their archive.

Keep up the good work ZipSearch!.

Wall Street started the session today racing toward gains however the latest economic data helped confirm investors’ fears that the economy is falling into a recession.  Investors were looking for data that would be help to stave off a sharp economic slowdown, and at the same time still warrant further cuts of the federal funds rate. Investors pulled the plug on trading for gains when a report from the Philadelphia Federal Reserve showed manufacturing fell more than forecasted. This manufacturing reading is the Conference Board’s gauge of leading economic indicators and it is used to predict which direction the economy is headed. It has posted its fourth straight drop.

As a result traders are already pricing in another interest rate cut, as much as an additional half a percentage point, after minutes from the U.S. Federal Reserve’s last policy-setting meeting were released indicating that the central bank will remain aggressive in regards to  fending off recession. Most economists realize the cuts to the federal funds rate take months to work their way through the economy and may not stop the economy from weakening further.

The Dow, the NASDAQ and S&P 500 all fell sharply as a result of today’s economic news. And finally for the good news, treasury bonds improved today as we see the 10yr note improved by 3.40%, or by -0.133, closing at 3.784. Of course you know this improvement will be reflected in tomorrow mornings rates. Tomorrow may be the right time to lock, however we may see things improve more as the next Feds meeting draws near and the FOMC, Federal Reserve Board, is scheduled to meet again on the 18^th of March. The last meetings notes forecast for slower growth and continued risks to the economy from housing and credit markets.

Now is the time to talk up this market information using our drip marketing feature in your LMS. Also redistribute your old leads and prepare to work them with improved pricing. Realize you need to move quickly as the market has been extremely volatile and has moved as much as 9.0% and back again in a 12 hour period recently. In the last two and a half weeks the 30 yr fixed at par went from 5.125% back to 5.875%. Chances are tomorrow we’ll see 5.75% and possibly 5.625%.

As you prepare for the influx of applications be sure to contact us so we can help! Thank you for reading and have a great evening!