Monthly Archives: May 2007

Internet Lead Workflows | Pipeline Management | Part 3

One of our enthusiastic clients implemented the call back workflows we discussed last week in icoSales’, using our sales force automation, and brought us to a perfect example of why these lead workflow concepts need to work together. If you do not implement pipeline management in conjunction with the call back periods you will not compel loan officers back into the pipeline to hit the frequent call backs. In their implementation they executed the call back intervals automation flawlessly, but did not consider today’s topic–pipeline management.

Pipeline management has traditionally been associated with the most fundamental of concepts within lead management, working leads or calling on prospects. However, so much is missed within this topic if that is your singular view of pipeline management. Instead it should be a very organized process that consists of the following:

  • Total pipeline size
  • Inflow of new leads
  • Evaluating each lead as it is worked

Total pipeline size is very important for two key reasons: one, it ensures that you are controlling the pipeline to a size that you can effectively work in a given time frame; and two, it ensures that you are being effective in turning leads into sales or at least you are not wasting any more of my marketing dollars. Remember:

“These are the new leads. These are the Glengarry leads, and to you they’re gold but you don’t get them. Why? Because to give them to you would be like throwing them away. They’re for closers.”

This highlights the total pipeline and the new leads concept well. If you are not constraining these two variables in your Internet lead workflows then I will guarantee you are throwing leads in the trash can.

Check your numbers. If you do not have constraints that work together on these two variables then your worst sales people are chewing through new leads and throwing the old ones in the trash hoping for the one call miracles. In fact, my favorite sales call was one when I asked a prospective, and now client, to bring me a list of his loan officers racked and stacked by conversion and production. Guess what? The top guy, closing at over 19% and about 15 deals the previous month, took in only 32 new leads (remember this was working a pipeline too) for the month. The bottom guy, closing at something with a leading 0 and a decimal point and closed 2 deals the previous month, took 250+ new leads. Talk about opening a prospects eyes to lost production.

So, what is the answer on the total pipeline and new lead allocation? Considering individuals sales pace and the design of your organization (do you have a contact team or is a loan officer working it cradle to grave), I recommend a pipeline that allows you to touch every lead, on average, of once every 48 hours. This general rule typically puts most pipeline rules at 100-150 total leads. Then, new lead allocation, becomes a blended combination of maintaining a balanced total pipeline level and maintaining motivation. I generally recommend anywhere between 3-7 new leads per day.

Finally, and probably one of the most effective pipeline management concept of the three is evaluating each lead, every time it is worked, this creates an active pruning and nurturing of leads that ensures that your sales force automation is constantly handling that lead in the most effective, sales converting way.

Sales Clip of the Day:

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Internet Lead Workflows | Call Back Periods | Part 2

If you have ever seen radar or sonar work, or read a Tom Clancy novel you have a great analogy for understanding the first component in developing your Internet Lead Workflows–Call Back Periods.

The purpose of radar or sonar is to locate an object by continually sweeping a general area where you think that object may be. Then as you get a return signal or “contact” you refine your subsequent sweeps to be more precise and maintain contact. That is the concept behind Kaleidico icoSales’ call back periods. A concept that should be implemented in any lead management methodology.

Taking this analogy into the context of lead workflows you have three primary variables:

  • Call back intervals
  • Lead status
  • Mortgage production cycle

The creation of call back periods seems intuitive, but if you try to use reminders and calendars you usually end up with a garbled mess of flags and pop-up reminders that eventually get ignored or turned off. Not to mention you are still left to fetch the contact information and past notes. The best solution is to have those optimal call back periods prescribed and then have the appropriate lead at the appropriate call back interval surged into your lead flow when you are ready to make the next call.

Of course, that begs the next question: How do you change the pattern as contact is made and/or lost again? Simply by tracking the status or actions that are occurring on the lead. As these items change, your call back periods should be adjusting too. For example, if you have a lead in an attempted status, but has not transitioned to contacted then you need to broadened you pattern, perhaps calling it every 2-4 hours until you make contact and determine the optimal time to contact your customer. Then your pattern should refine again, perhaps to every 18-24 hours. Keep in mind these statuses will ebb and flow changing, moving in, moving out, and back into various statuses throughout the process. Make sure your call back periods adjust for these changes automatically or you will drive yourself and your customer mad.

This then brings up the final call back variable–mortgage production cycle. It is a fact of the business. At the beginning of the month you are laser focused on stoking the pipeline with new applications. Then as you transition closer to end of month close out you are similarly focused on getting those packages back and fundings scheduled. What does this have to do with call back periods? Simple, typically you want your call back intervals to tighten on “contacted and no application” at the beginning of the month and your intervals are longer for “application and no scheduled closing.” This means you are focused on and working most frequently on the top priority leads based on your production cycle. Then, of course, these intervals begin to shift as the month progresses.

Begin using call back periods to manage your LO lead workflows and you will immediately begin giving your LOs an edge in getting better and more consistent contact with your prospects. In addition, it will allow you to automatically focus each LOs lead flow on the leads that need the top priority.

HOW-TO Develop Internet Lead Workflows | Part 1

Jason Stoffer just gave me a perfect introductory question Calling Internet Leads: How Often, How Much? to start my new series on HOW-TO Develop Effective Internet Lead Workflows.

I agree with Jason’s current conclusion that there is no “holy grail answer” to the question because “each company, industry, and consumer segment comes with it own unique characteristics.”

That is why I will seek to engage my answer starting with his second potential source of finding an answer:

“what approach or methodology should I use to arrive at an answer?”

My answer? Dynamic Internet Lead Workflows built on the fundamental premise of the problem–How to effectively meet someone in a strange place:

So, you purchase Internet leads and you are frustrated with contact and conversion rate. Have you considered that the majority of that conversion effectiveness is in how you manage that lead into a contact? Have you considered that the process of getting that contact is largely a well-researched mathematical problem? Does your lead management system give you the ability to maximize the probability of that contact?

Kaleidico has baked the optimal solution to this mathematical problem into icoSales.

Here is the premise of the math part–don’t worry it won’t hurt a bit.

Rendezvous Dilemma

The rendezvous dilemma is a classic dilemma of game theory (maybe you remember the movie “A Beautiful Mind”). It is simple to conceive and you have probably experienced the problem yourself. Two people agree to meet at a park, or mall, or other reasonably large public place. However, upon arriving they realize that the designated meeting location is much larger than they anticipated and can not directly survey. Consequently, they can not find one another.

Now they have few choices:

1. Both can chose to stay in one spot and do nothing, then of course they will never connect
2. Both can begin to walk about and look for each other, possibly they will meet and possibly they won’t
3. Finally, one can stay in one spot and wait while the other searches for them, as a result (theoretically because this assumes there is no time constraint) they will eventually connect

Now that you have the mathematical foundation, let’s build in our real world problem.

A consumer comes to the Internet looking for a mortgage or at least information about rates, refinancing, purchase, or other related matters. They enter information about how to find them. However, they may get anywhere from zero to only a website URL to find you. At this point, you are both in this great big space called the Internet looking for one another.

Time to create your search strategy and pattern. Obviously, you are not going to chose strategy #1. Strategy #2 is probably equally futile, because they already did their part to find you by submitting a fair amount of personal information. That leaves you with strategy #3, but just wandering about will leave you and the consumer just as frustrated.

So, you need to construct an effective search strategy or pattern that will maximize your contact rate and reduce your time to contact. This is where lead workflows become critical.

This will be the topic of the next few posts…

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Lead Management and Fair Lending

Could your current lead management techniques be putting you into Fair Lending (Fair Housing Act) harms way or promotes Redlining?

Are you are feeding list of leads and leaving it to the loan officer to pick and chose who they call? Even worse do you allow them to preview and select leads based on demographic and economic factors like age, gender, or neighborhood? These types of lead management techniques could set you up for a very painful ding from a State or Federal Regulator.

Make sure as you craft your lead management best practices and methodologies that it creates a bullet proof lead distribution process that ignores all factors such as: race, color, religion, national origin, sex, handicap, or familial status.

Why Consider a Lead Provider v Lead Exchange?

You know I like to be fair and balanced and let the readers make the final decision–you had to know this was coming.

The last post was so compelling why wouldn’t you buy all your leads from a lead exchange, like LeadPoint or RootExchange?

Well the biggest reason is that it has not become a full-service marketplace (yet). It truly is an eBay for Internet leads, but you don’t buy all of your stuff from eBay–right? There is a tendency in any auction, versus a true marketplace, to attract remnant merchandise. Most believers in Lead Exchanges (count myself as one) think that this phenomenon is at worst case an important (and potentially highly profitable) component of any marketing portfolio and in the best case is merely a n early evolutionary stage to a genuine marketplace.

If you only buy from a lead exchange you may be missing out on premium online media buys that attract affluent mortgage buyers and refinanciers. I can guarantee you that not a lot of Yahoo!Finance, Wall Street Journal, or Forbes Mortgage Marketplace Ad buys are currently going into the available lead exchanges. Consequently, if you are looking for jumbos and super-jumbo mortgages in CA then you may not find them in an exchange and certainly not at a competitive rate considering the laws of scarcity.

The other thing you may miss out on is some of the strong consultative best practices expertise that still resides at the larger lead providers like LowerMyBills and LendingTree. Although, I have seen much of this talent floating out to the smaller providers.

At the end of the day, there is still a lot of premium Internet Ad buying going on in the mortgage space and the lead exchanges have not become the primary hub of lead distribution. Until then you may want to consider and watch each for their best contributions to your marketing spend and sales production.

Create a Conversation with Your Prospects

Priceless video of how most of us approach our prospective customers. We treat them as statistics, demographic segments, and dialer targets. If you are not willing to have a two-way conversation they may be leaving the table because of you not your product or service.

Blogs are famous for this. It is hard not to fall trap to talking about ME and not YOU. Telling you instead of asking questions. So, has anyone out there used any creative techniques to create two-way, interesting, and engaging conversations with prospective customers?

Why Consider a Lead Exchange v Lead Provider?

Most of the readers of this blog are buyers of Internet leads, and more specifically mortgage leads. However, you may not all be familiar with the concept of a Lead Exchange. John Challis (full disclosure: I used to buy LowerMyBills leads from him when he was at LowerMyBills and I was at Quicken Loans) of LeadPoint talks about why you might want to consider Lead Exchanges in this changing mortgage market.

Here are a few that made me think this was important to Better Closer readers:

Despite the downturn, I don’t think anyone can question the viability of the internet leads as it relates to the mortgage industry.There is no doubt that the lead-gen market is contracting along with the origination market in general, but while the figures vary somewhat based on the survey, general consensus is that between 45% and 75% of homebuyers begin their process on the Internet.So, if you are not including Internet marketing in your marketing portfolio, then you are potentially excluding over 50% of your potential market.

You have to start here. You can not ignore this fundamental emerging fact in mortgage lending. Home buyers and refinance borrowers are going to the Internet first. Now, you just have to figure out the best way to capture their attention and intentions. That is why you have to read about this stuff even if you are in sales–who does it best and why?

The secret is this. The traditional lead-gen company is only as effective as their advertising spend. The revenue that they make from selling leads is in direct proportion to the presence and quality of their advertising. But contracting revenues will logically have a deleterious effect on their ability to acquire consumers. It is a grand dilemma; either increase prices to make up for a diminishing add buying power, buy fewer media placements or a poorer quality of media, or divert funds from other sources (like a reduced payroll) in order to maintain your marketing spend.

This is the meat of John’s post. What will the declining big volume buyers (like New Century and Ameriquest) do to the quality of big volume sellers? Does it create opportunity for smaller buyers and sellers? If it does how do you capture that opportunity most efficiently?

The only note I will add to this, because I like to have my readers form their own opinions, is that we have seen (and you have too if you are watching our Lead Marketwatch widget) a subtle surge in the quality of smaller organic lead generation players in this space. If that trend continues smaller lenders may be able to tap into more of these through an exchange. Furthermore, bigger lenders, that need more volume, may be able to conveniently and more economically have these smaller sources vetted and aggregated by an exchange and the exchange marketplace.

Thoughts?

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