You have got to love Arizona.  Arizona has always been a notoriously tough state to obtain Bankers/Brokers license and has occasionally even heavy-handed some lead providers over the years.  Now Arizona appears to be on the verge of passing a new Loan Officer licensing bill.  By passing a bill that would require loan officers and mortgage originators to pass a test, pay a fee and notify the Arizona Department of Financial Institutions regarding their employment, Arizona is leading the charge to regulate shaky lending practices.

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Lead Management Software Solution Part 3

“Marketing is a societal process which discerns consumers’ wants, focusing on a product or service to fulfill those wants, attempting to move the consumers toward the products or services offered.” Wikipedia.

Today’s marketer is a combination of psychiatrist, strategist and public relations expert. The need to reach an increasingly diverse online audience demands that you utilize all forms of marketing to close the gap from prospect to client. For commoditized industries like mortgage, debt settlement, education, and insurance (where competitors offer nearly identical products), marketing and adherence to best practices can be all that separates competitors.

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A little background:
“Lead Management is still a new field that is far from maturity. Because of this there is a lack of understanding of the key functions and approaches to Lead Management. Lead buyers have become increasingly sophisticated in regards to evaluating leads, but are often less prepared to evaluate an LMS. This series is intended to clear up common misconceptions and stimulate debate among other experts about best practices and the state of the industry.”

Lead Management Software Solution Part 2

Why Reports Matter
A business cannot function efficiently without the proper means of measuring performance.  Metrics reporting allows business managers insight into what strategies are and are not working within an organization.

For the purposes of this post, I will focus on reports and metrics for LMS users who are buying or generating internet leads. I think the landscape will hold true for almost any kind of lead or industry that you could insert into this discussion.

The key to creating valuable reports is ensuring that the appropriate data points are being measured and reacted to.  Functional reports will measure only the data you want to see and only in the way that you want that data displayed.  Too little data leads to bad decisions. Too much data can hinder efficient decision-making.  Sales and marketing managers should not spend time analyzing data; they should have the important data available easily and instantly, in order to quickly make correct strategic decisions.

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Part 1 of a 4-part series on features, myths, best practices and thoughts on the future of Lead Management Software.

A little background:

Software is dying. Implementing lead management is less about buying software than it is about implementing a SOLUTION. What’s the difference? Software is a platform to create products and solutions, while a solution is a proactive approach to improving your business. I wrote this post to highlight best practices and features of the ideal Lead Management Solution.

Lead Management is still a new field that is far from maturity. Because of this there is a lack of understanding of the key functions and approaches to Lead Management. Lead buyers have become increasingly sophisticated in regards to evaluating leads, but are often less prepared to evaluate an LMS. This series is intended to clear up common misconceptions and stimulate debate among other experts about best practices and the state of the industry.

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Over the last few weeks, I read several articles talking about the recent pickup in mortgage companies hiring new Loan Officers and Processors. One of the articles mentioned in my local paper the OC Register, discussed how the CEO’s of the mentioned companies are scaling up staff based on pending FHA loan limit increases and low interest rates. While I am very happy to see jobs trickling back into the industry – I am concerned about another recent flurry of companies shutting down operations and starting back up under new names.
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I wanted to share some exciting news about an upcoming event, which everyone in the “Lead Ecosystem” should attend. The editor of DM Confidential has spent the last few quarters putting together LeadsCon 2008. LeadsCon will be held in Las Vegas at The Palms April 2-4.

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The 80/20 Rule

I read a Seth Godin post yesterday titled “Dumbing Down.” Seth mentions mass-market communications, pandering to the masses and the negative effect “dumbing down” communications can have. He says, “I’ll take the smart customers/readers/prospects every time, please.” I think he is arguing that dumb messages generate dumb and/or difficult clients. If this generalization is true, does the inverse hold up? Do smart messages attract smart clients?

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Why you should buy internet leads. Internet Leads are the most profitable and scalable marketing channel for generating mortgage clients today.

SCALABLE – Because there are so many lead providers available to you, if one provider is unable to meet your demand for consumption there are others that you can turn to. Supply can be scaled back as needed, most providers allow for some control over what days of the week you purchase leads, time of day they are delivered etc. The ability to turn on and off your marketing gives you a level of control that is not obtainable using alternative means of marketing.
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December is traditionally a slow month in the mortgage industry where contact rates and funding rates tend to drop by at least 15%. Loan officers start scheduling significant time off and prospects get very busy. I remember even during the mortgage heyday our loan officers dreaded this month. Is anyone experiencing the December drag? Have your contact rates dropped in the last few weeks?

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We have talked about core strengths over the months, training loan officers, reducing marketing costs, monitoring lead sources etc., but little attention seemed focused on the underlying causes and processes that are the leading source of productivity loss.

My wife works in the dental industry and she’s always telling me people brush their teeth but do not floss. That too little attention focuses on the underlying cause of tooth decay and that brushing teeth is not the solution to a healthy smile. If someone spends their time focused only on the looks and appearance but neglects the underlying needs of a smile, the tooth rots and a root canal is necessary.

It dawned on me the other night that the mortgage industry is in a similar fix. If we only spend our time thinking of the “appearance” or sales and marketing aspect of our firm we too will have decay.

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In deference to a few minor criticisms I’ve removed any mention of the LMS company I work for that offers email services.  I would point out to you that you should check into email capabilities of your CRM/LMS/LOS system and see and use that feature.  Some LMS systems charge you $.04-$.05 per email they send out.  Others will not host the email server – you must do so and yet others offer free email services hosted and setup to go out in drip campaigns. 

You bought a lead with a bad phone number? Darn – Return it to your vendor and let me close that deal.

I recently begun work on an email template for the company I now work for, we sell Lead Management Software.  When I started to look at our processes for setting up new clients I noticed some best practice flaws. Our advice to the client base will involve more information about using the LMS to nuture the leads through the client cycle using multiple emails.

We need to stress the fact that internet leads are filled out on the internet.

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Ed-u-ma-ka-shon – The process of being educated informally,  LOL

Education seems to be the focus in the mortgage space these days.  This is taking place in all areas of the business.  From the lead vendors and lead management software providers down to the real estate agents taking refresher classes, a Surge in education is taking place.

Back in the day lead vendors asked you “How many leads do you need” – “What states are in you” – “What are your filters and criteria”?  I called this working from the bottom up.  Now they ask, “Do you use lead management software” – “What type of lending do you do” – “How quickly do you contact the leads we sell you”, etc.  This is what I call working from the top down.  Understanding how a client operates gives lead vendors the best chance to suggest operational improvements that can keep that client in business and/or buying their leads.

Even the Lead Management Software companies have taken strides in this area.  Several months back Leads360.com formed a consulting division within the company appropriately called Professional Services.  This new division visits client locations to learn about each business and then offers operational best practices that can include additional training, workflow improvements and adjustments and invitations to one of the client roundtables held at their corporate office in
Los Angeles.

Others do something similar.  Bill Rice of Kaleidico has always taken an active role teaching and sharing ideals and is a firm believer in educating the clients and loan officers.  In addition, blogs have taken on the role of training and educating.  Lead Critic and this blog in particular has led the way teaching mortgage best practices, shared experiences etc for quite some time.

Consulting is nothing new.  Other business verticals have done it for years, international consulting, etc.  I wonder will this trend in our space continue or will it last only as long as the downturn in the market lasts. 

Ok so this Irish-Mexican just got back from the MBA conference in Boston. WOW.

This was my first time visiting
Boston and I wanted to get the most out of it.

My comrade in arms and I took the Sunday night redeye out of LAX and landed early Monday morning in Boston. Our goal was to meet & greet and ID what the 2007 MBA offered.

I knew that Bono and Branson were keynote speakers and wondered what ideas a rock star or daredevil would offer the mortgage industry. It seems I have forgotten the last four years of mortgage lending were dominated by rock star LO’s and daredevil lenders offering programs never heard of, how apropos, heheheh.

This was my first MBA visit so I was unsure of what to expect. While my options were open to attending the sessions and keynote speeches I found the good stuff was in the exhibits. Several attendees mentioned this was the lowest level of attendance since MBA Canada after 9/11. Too bad, many great companies focused on nurturing the client cycle and keeping us in business.

One session I attended was “Second General Session: Mortgage Industry Executives Outlook.” This session was comprised of four major lenders offering their insight and outlook on things to come. Get further information from MBA on the speakers. VP’s of origination from Chase, JP, Freddie, and Fannie told us that things are not good. For the most part all agreed that until Q4 of 2009 or beyond the devaluation of the housing market and liquidity sensitivity will continue to reign in any possible positive outlook for the mortgage space. Nothing new there, huh?

Notable vendors included pricing engines, LOS alternatives, third party marketing specialists, and language specialists. I spent time visiting the booths sponsored by competitors of Calyx or Ecompass. Their sales pitch stated the prior focused on 5-10 man shops while they worked with 200+ man shops. The idea behind these newer players was the focus on complete service. Optimal Blue touted lead management, vendor management, and pricing engines in a single application. Could they be competitors to Lead Management Software companies? LLE provides communications solutions in any language. This can be ideal for small to medium shop that wants a foreign language division but cannot dedicate resources for it – think Spanish speaking lending in the Southwest. What about reverse mortgages? If you Google reverse mortgage leads, you end up with NR Leads out of
San Diego. Not necessarily someone I recommend you buy leads from – Try Lender Lead Solutions out of
Melville NY. They combine a media driven lead with correspondent lending.

Well that is all for now.

Same time, same channel next week. Guru out!

I understand that mortgage lead quality is an often talked about topic and I am probably beating a dead horse for many of you, oh well. 

This is my first post in some time and I need the typing time. 

Lately there has been much adieu about lead quality dropping and in particular from the tier 1 sources.  Volume from some of the tier 1 vendors has also dropped according to several discussions I have had with clients. According to my conversations with the vendor reps, this drop in volume is due to their recent focus on improving lead quality.

 Great – The lead providers that have used banner ads for these last few years have decided that a better quality lead is necessary in this market.

What if I have reconsidered what the definition of “Quality” is, should the lead vendors now perk up their ears and listen to me or any of us? In the past, I believed quality was a blend of several factors, (e.g. contact rate, transfer rate, opened loan rate, funded loan rate, and return of revenue). I used to look at every one of these categories and when the numbers were right I picked vendors as if they my date for the night. 

What if I now I think lead quality is nothing more then the right price point? 

How could I think such a thing you ask? 

Recently I have spoken to dozens of mortgage companies all looking for advice on vendor selection and management. Hey Lead Guru, what do I look for in a lead? What is the best way to monitor them and ensure ROI? 

I made my suggestions and offered solid advice (At least I thought so) but it turns out in the end, no one really considered anything other then pricing on their leads. How often I heard “Hey I just got 100 Lower My Bills leads for $8 each.”  Wow. 

So I say again, at this time I have decided that lead quality is nothing more then the right price. Buy a bunch of lower cost leads and invest your employee equity burning through those leads. 

In the end you benefit only the large providers – let’s see some more dancing monkeys and rhinos producing click throughs.  I need a new car soon so hopefully you’ll be in a position to get me a good price.

Well that is my rant for now, look for me next week same time, same channel.  Signing off,  “Cynical and still in the game”.

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