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.

All Reports Are Not Created Equal
Reports offer little value if they are not used regularly.  Some reports need hourly analysis while others should only be viewed yearly.  For any type of metrics reporting, the idea is the same: comparative measurement of multiple data points.  The data points can consist of daily call frequency to monthly or yearly conversion results.  Because of this need for regularity, reports should be easy to setup, use, and refine.

Lead Management Software is a critical component of measuring and analyzing performance.  Businesses using LMS have all of the data that they need, at their fingertips.  A good LMS should provide standard (“canned”) and custom reports, from within the system.  For a mortgage broker, a standard built-in report might show contact rates, contact speed, application rates, submission rates and overall conversion.  A custom report is built by the user, and might show a comparison between salespeople and lead sources, during a certain time period.  I like having standard and custom reports available and want them to allow for work within the report. I call this type of report “Actionable”.

Actionable Reports: Why an LMS Will Make Your Spreadsheet Obsolete
An actionable report combines reporting with the ability to work with the data–without back tracking or losing the context.  An example of an actionable reporting within an LMS could be viewing a report of leads which have not been contacted in a certain time frame and attaching reminders or reassigning those leads on the fly—from within the report.  Actionable reports are the most effective means for measuring, analyzing and reacting to the data within your system.  Data is only valuable when it is understood and acted upon, quickly.

Efficiency = Profitability
There is a direct correlation between creating an efficient sales organization and creating a profitable business.

Completing any transaction from an internet lead requires a special focus on speed to contact.  A 2007 survey conducted by PhD James Oldroyd, in conjunction with The Kellogg School of Management,  titled “How much time do you have before web-generated leads go cold” shows leads contacted within the first 5 minutes have the best and highest chance of converting.  “The odds of qualifying a lead in 5 minutes versus 30 minutes drop 21 times. And from 5 minutes to 10 minutes the dial to qualify odds decrease 4 times.”

When I am asked to consult with a lead buyer and assist them improve profitability, the first metric I look at is speed-to-contact (STC).  For almost any client, focusing on STC will produce an increase in application rates and completed transactions.  The more applications you take, the greater your odds at converting prospects into closed loans.  Use your STC to benchmark current performance and set new goals for your sales team and optimize output.  Each time you monitor, adjust and speed up STC, you should see a positive impact on the bottom line.

Building on the STC analysis, move onto the next metric, which for a mortgage company would be submitted loan packages (SLP).  Once an improvement in STC and App rate occurs the ratio of submitted loans should increase.  Examining the fallout-rate of applications to SLPs (essentially measuring deals that are started but not completed) can identify if lead source’s or salesperson’s performance is above or below average.  It does you no good if you take a lot of applications but don’t fund many loans—it’s critical to determine where the bottlenecks lie.

Marketing – Get Granular
Lead buying is complicated and has only become more complex over time.  In the past one could buy a single lead from each source with blended criteria.  Today, the environment is different and you should monitor each criterion and filter separately, to identify which leads are producing the best return.

Analyze each lead source for contact and application rates.  Use this metric to get a “feel” for the quality of the lead provider and the operating efficiency of your company.  You would not stop buying from a lead provider based on a low contact or application rate alone, but it does give you a good deal of information about the leads you are buying, the receptiveness of the prospects, and the effectiveness of your sales team.

Knowing that your team converts “Good” credit in Georgia better then low LTV leads from Maryland is critical information that should direct how you optimize your marketing or lead buys.  Buy leads that make you the most money, period.

The Forgotten Metrics
Don’t forget to keep an eye on your work flow.  Measuring the effectiveness of the way your people work, not just how much they work, or how efficient they are, is key to long-term success.  Use your LMS to play with different distribution patterns, sales team structures, lead nurturing practices, and other ways you can affect the performance of your tem

Closing
I could go on about what to measure, how to improve output, etc. but the post would become a novel.  The bottom line is that today’s internet lead environment necessitates getting good data and acting on it nimbly. You cannot afford to turn like a cruise liner or accelerate like a row boat.  Use reports wisely, make adjustments and compare results.  Your job: demand good data and demand that it be easy to act upon.

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