Smarter Lead Acquisition

Over the last several months I have had a guilty hobby, much like gawking at an accident scene. Each day I go and check the компютриmortgage implode-ometer. This site lists the latest sub-prime train wrecks.

While reviewing the latest roadkill, it occurred to me to see if there was any correlation between lead buyers and defunct lenders. While this list found at LendingTree’s site is by no means a compendium nor completely accurate, it does give an interesting indication of the majority of the largest lead buying lenders in the country (dont write back–I know–you’re not on that list and you would never buy LendingTree leads).

What is interesting is that only 6 of the 74 lenders who have exited stage left since the beginning of 2007 were on the LendingTree list. I can make some bold assumptions, (especially looking at LendingTree’s app rate here ) but I think it would be more interesting to see what YOU think.

Does this mean that

1) Lead buyers in general have staying power in the market? If so, why?(New

Century and Ameriquest notwithstanding)

2) LendingTree lead buyers are at an advantage during this fluctuation?

3) There is no correlation?

—Keith B——-

Joel talks briefly in his post, on a new venture RealEspace, about how he would like his personal consumer inquiry (lead) generated.

I think there is a strong discussion to be had around better ways to generate leads. Unfortunately, I think for the major lead providers it is a big risk to change the way they generate leads today. Lead generation that attempts to engage consumers with more complex and targeted content tends to:

• Increase the cost to generate a lead
• Increase the time to generate a lead
• Potentially increase the time a lead provider is nurturing a consumer v. the lender
• In the short-term decrease lead volume until you learn to effective capture all the segments you were “snagging” before versus “capturing” in the future

So will the change to a more personal and engaging lead generation consumer experience? Absolutely. Where will it come from?

It is probably less likely to come from the big players, simply because of the risk and cost to their current operations and ravenous big players like Quicken Loans, Countrywide, and increasingly big players like PHH Mortgage, HSBC, CitiMortgage, and Amerisave. Having made that statement, the bigger players have shown the ability to make adjustments to meet the market. Some notable examples are LowerMyBills introduction of the premium lead to have a more competitive “long-form” leads comparable to LendingTree and LendingTree’s acquisition of GetSmart to address the “short-form” or volume market.

The more likely source to find these types of more complex, demand generated leads may be in the lead exchange platforms, like RootExchange and LeadPoint. These exchanges allow smaller and perhaps more innovative lead generation methods to get a shot. Kind of like browsing the Indie section of iTunes for that diamond in the rough band or artist.

I think the real puzzle to solve will be how to manage and nurture these more valuable leads (consumers) that are captured much earlier in their buying cycle. Most lead management systems and methodologies are not equipped to nurture a lead much longer than about 14 days and lead generators are certainly do not have the technical and marketing architecture to accomplish this nurturing process for lenders.

That is where I think our solution, Kaleidico’s icoSales, has a great opportunity. Using our unique “automated work flow engine” you can actively nurture a consumer (lead), hands off, through multiple targeted programs over periods of months and years, not days.

Jason discusses how true multi-channel or multi-media consumer behavior may effect lead providers and lead consumers:

Multi-Channel Customer Experience

A great lead conversion and ROI discussion by Morinsight and John Challis (from Leadpoint and formerly LowerMyBills).

I just got Morinsight’s post, “Lead360 Implements the PULL method,” across my feed reader.

I don’t doubt the attempt to duplicate Kaleidico’s icoSales methodology since Jeff Solomon has been talking about the pull lead management concept since July 2006, although I think his comments about it “not working in a real-time environment” is juxtaposed to what we think the real-time, high-velocity, high-performance impact it is having or clients’ sales performance.

It will be interesting to see the real results of their efforts. The design and engineering, to get it right in icoSales, has been evolving in my notebooks since 2001. There are a lot of hidden complexities in increasing sales performance with a pull methodology. The swift is inevitable and logical. The auto industry discovered a long time ago when you are trying to optimize and maximize profit on your raw materials then inventory (leads) have to be managed on a pull basis, not push.

I guess the real thing that I find curious is that I can’t find any formal announcement from Leads360. Perhaps Morinsight has grabbed and inside scoop or Leads360 doesn’t want to announce an attempt to duplicate icoSales???

 Update: Leads360 responds.

Interesting discussion with Marc Diana and Per Petterson. Watch these guys. They are smart and seem to be growing a business with limited mis-steps–an accomplishment in itself.

The lead exchange paradigm is definitely one to monitor. Kaleidico is seeing more and more of our clients trying and liking this way of buying leads.

BTW, there is not a definition of “lead exchange” at wikipedia.com. I think that would be useful for the market to understand the concept better.

I can’t believe I missed another significant lead exchange that is in my own back-yard–Detroit Trading Exchange. This is an automotive play in the lead exchange business from former Cars.com experience.

Thanks for the pointer Pete–drop me a note (bill [dot] rice [at] kaleidico [dot] com) so we can get together and I can learn more.

There has been a recent surge in discussion over how to maximize the return on you lead dollar. The combination of imploding mortgage operations, constricting margins, and tightening guidelines are forcing a focus on back where it should be the value of the customer or in the common impersonal vernacular, “the lead.” Lead management is obviously a key component to that optimization.

I want to highlight a couple of good posts exploring lead management:

Lead Optimize does a nice job talking about the importance of follow-up in managing your leads. The one thing I would disagree with a bit is the notion that email is an effective method of lead management. In fact, I use an email analogy to highlight Kaleidico’s unique performance-based pull methodology. I you visualize your email Inbox right now it probably looks like mine and everyone else’s–hundreds of emails, some opened and responded to or actioned in some way, but numerous are still bolded, unopened, unactioned and will probably remain that way until deleted. This is the danger of using email to distribute and management leads. In fact, this is also the danger of using a tradition CRM that gives you the same style interface to manage your leads. Are you willing to take that risk with your increasingly valuable marketing investment? It seems like a poor trade-off when most of these systems range anywhere from $50-$100/user/mo. That price point means that one additional closing in most verticals, especially the mortgage industry, can pay for 50-100 users.

I can see why lead optimize might come to the conclusion that Outlook is an acceptable alternative if you consider lead management to be defined by the solutions listed in the post since you can replicate about 75% of their functionality with Excel and Outlook.

Jayson Brock provides a pretty good analysis of the important features of Mortgage Leads and Lead Management. However, I would add emphasis to the significant conversion impact of having real-time integration with all of your lead sources (i.e., your website and lead providers) where consumers are expecting a 2-way conversation–like inquiries made via the Web.

Obviously it is critical to have the ability to simply load any data format into your lead management system because you will always have these channels (i.e., user’s past clients, credit triggers, migrations from other lead management systems). However, make sure that if you are dealing with a dynamic, real-time channel make sure you have the capability to receive and distribute to the sales force in real-time.

Web-based Platform Provides Smart-CRM Functionality For Large Sales Organizations

For example, a mortgage company that has offices in Boston and Los
Angeles can purchase and measure leads from one set of vendors for its
Boston office and work with an entirely separate group of lead providers
for its Los Angeles office. icoSales EE can therefore link to different
lead generation outlets simultaneously and give independent offices the
ability to measure closure rates and therefore make more informed lead
buying decisions on-the-fly and in real-time. In addition, icoSales EE
gives headquarter offices increased visibility into branch office
performance, reporting and analytics so senior leaders have a broader view
of their global marketing efforts.

Read More…

Morinsight, an anonymous blogger, post an interesting comparison of the two major lead exchanges. Morinsight claims to be:

…a lead and internet manager for a large mortgage, real estate, and financial service company. I specialize in lead management, analytics, internet marketing, and search engine optimization.

(via Morinsight About)

He or she has some interesting initial posts–>Read More…