LEADCRITICTime To Get Schooled by MIT
Filed Under: MIT Study, featured, Lead Buying 101, LEAD Management
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We have sporadicly discussed lead management benchmarks here for the past few weeks and have an ongoing survey running that continues to be very tight race. I want to bring it up again and source an 8 month old study performed by MIT. The study has been out for sometime, as I just mentioned, and I have been putting off discussing it for a while now. Not because I think it is unimportant, because it is very important for people to read. I simply just had more time sensitive topics that arose and continued to put it off.
The study is probably the most complete and detailed report on the topic. Its goal was to find the best time of the day, week and time from creation is the most optimal in terms of contact and qualification of a lead. This report literally gives everyone many of the benchmarks we have been discussing.
I want to point out a few interesting findings:
- The odds of contacting a lead in the first 5 minutes is 100 times more likely then in 30 minutes. 5 times more likely then in 10 minutes.
I hear every day, “I call the leads minutes after I received the email, but I still am never the first to contact the lead”. First, notice that they say email. Usually people complaining about be last to contact a lead receive them by email and do not use a lead management system. There our no excuse for not having a lead management system these days! Well, I guess stupidity will always be an excuse, so you do have one. Based on those statements we began monitoring email open rates of all our clients and found that on average, during working hours, it took 30 minutes for buyers to open the email and read the lead data. THIRTY MINUTES!! This leaves me speechless every time I mention the time.
- The likely hood of contacting the lead after the first hour decrease by ten times.
- Regarding the time of day that is best to contact a lead: “4 to 6pm is the best time to call to make contact with a lead. It is 114% better than calling at 11 to 12am, right before lunch. (We did not feel 7-8am was a standard work hour.)”
The study leaves out some really good opportunities and this is the first. They did not take into account off hours in their study which I think leaves out really good opportunities. During my time of managing leads we had a few guys that would come in very early, before 7:30 am and called leads and had great success. One actually got most of deals and work done before 9:00 am. Yes, he called people at 7:30 am and people were fine with it. It takes guts, but if you consider the norm they will too.
- The study found that Wednesday and Thursday were the best days to contact a lead. Thursday being the best out of the two.
- Thursdays were also the best day for a lead to convert from a contact to a qualified lead and Fridays were reported as the worst.
This brings up another short coming of the report. It does not take into count weekends. Yes, Thursdays are good days,but through my own 3 month study weekends out performed weekdays for contactability and application rates. I have mentioned this before, but this takes into count leads that were generated on the weekend, not necessarily called on the weekend. Many of the leads in my study were not even called until Monday, but still performed better. It would have been nice to have a little MIT validation for my findings, but for some reason they thought that sales people worked typical 9-5 Monday - Friday hours. Obviously not the case.
In September I will be joining Chris Meerschaert on a panel at the TargusInfo Lead Quality Summit to discuss our experiences from both sides of the table. One surprising find, after transferring over to the sell side of the business is the disparity between people who work leads fundamentally correct and those that don’t. It gets even worse for other verticals, especially insurance verticals and one of the last statements from the study encapsulated my sentiment and experiences.
Our president signed up with the top lead provider to get quotes on his mortgage.
1- He received a total of 7 calls.
2- The first one called in only 30 minutes.
3- The last one called on the lead 3 days later.Does that last one who called realize that the odds of qualifying this lead are several thousand times less than if they had called in five minutes?
Not only that, what about the fact that he only received 7 calls TOTAL? Good companies that succeed with leads will call the lead 7 times the first week alone. I know it sounds brutal, but work the leads and continue to call until they get a hold of the client.
Our Sales Manager and several of our sales reps filled out web-based health insurance questionnaires with several of the top lead providers we partner with in the insurance industry:
1- Our Sales Manager filled his lead out at 4pm, (the optimal time for someone to reach him according to our data.) He didn’t get a single call that day. He got his first of 5 calls at noon the next day (almost the worst time to call), and the last one two days later.
2- One rep filled his lead form out with another top lead provider at 8:30am (the second best time for someone to call), and had his first call in 1 minute, his second in 3 minutes, his 3rd in an hour and 45 minutes.
3- Another rep also at 8:30am, and he got one call in 2 minutes, and 2 more calls the next day.
4- Another rep filled theirs out at 10am and got the first call in 2 hours and never noticed any additional calls.
What a big difference between experiences of each lead. How about the #4? He received one call, that was it. Now it could have been because is filter was in low demand, but you must continue to call the lead until you get a contact. I spoke to a gentlemen the other day that stopped calling the lead after two days of trying. Please do not give up on a lead after one or two days of calling. You can lengthen the frequency of the calls if you wish, but continue to call the lead for a month.
Read this report, study it, remember it and of course apply it. This is an MIT report, not just some “dumb anecdotal advice from a critical ex-lead buyer”, so take it seriously and start working your leads like they should be.
Anyone want to add their two cents??
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John | Jul 16, 2008 | Reply
This is very interesting. Where is the source of this research?
Lead Critic | Jul 16, 2008 | Reply
I linked in the first paragraph, but here is the link again.
http://www.leadresponsemanagement.com/mit_study.html
Noel Collins | Jul 16, 2008 | Reply
Best Practices can be evangelized and spoken about till everyone is blue in the face, in the end only those incorporating the actual facets involved will have higher and more successful ROI. How many years have we spoken about this LC? It is interesting to hear again the experiences of the other verticals, non-mortgage. Leaves open opportunities for BP thought leadership in other areas outside of mortgage.
Lead Critic | Jul 16, 2008 | Reply
I know it does get repetitive, but I think its important for my own sanity to keep the effort up.
To your point too, yes, other verticals are worse off, in terms of best practices and it is really scary.
Raj Parekh | Jul 16, 2008 | Reply
Well the first facet of best practices that lays the groundwork for entire organization is solid top down management. If the owner operators and managers don’t live it, it’s going to be hard to make your team live it. Software helps, but nothing LROI, L360, or anyone else does in software is going to change company culture. Culture breeds success or it breed deep failure. Good managers breed good sales people. Get the wrong people off the bus and get the right people on. Put systems into place that automate and bring efficiency to the established process and adjust your process as the analytics indicate you should.
Jay Dunsing | Jul 19, 2008 | Reply
My metrics show this over the past 30 days (6/19/08-7/19/08). Overall, accross all lead vendors I buy from our contact ratio (actually spoke to the customer) 67.4%. Our application ratio (took complete application and pulled credit) 34.7%. Leading the pack from the lead vendor standpoint was ReallyGreatRate.com with a 76.8% contact ratio and a 44.2% application ratio. Trailing the pack was LeadPoint at a 62.3% contact ratio and a 31.1% application ratio. Why so high when compared to what I see on the “Lead MarketWatch” report found on this website? We don’t mess around!!! When a lead comes into our Lead Management system Leads360 we jump on it, meaning, we call in 1-5 minutes during the day during the week. Additionally, Leasds360’s “Pull Distribution” method allows us to tag team the clients as the day progresses. I normally see upwrds of 5-10 attempted contacts by my LO’s in the first 24 hours. This is why my ROI is well over 2000%!!! It’s as simple as this: Buy the right leads with the right filter sets, Manage the leads (your investment) correctly, and hire, train and hold the LO’s accountable EVERY day. I need more LO’s in my western suburb Chicago office so feel free to give me a call. Jay Dunsing 630-936-0621 cell. Patriot Mortgage Company
Jay Dunsing | Jul 19, 2008 | Reply
Call Jsy 630-936-0621
SomeInsider | Jul 19, 2008 | Reply
If your ROI is over 2000%, Jay, your lead providers need to raise your prices!
J Bartlett | Jul 19, 2008 | Reply
What a dumb comment. When a good lender gives us (lead providers) good data back, we don’t raise prices, we generate more leads based on the channels that produce solid ROI.
Great data Jay — I am not sure why more companies do not have your similar results unless they just do not make the effort and do not take the time to set-up the process and most of all - ENFORCE the process by holding each piece accountable.
Lead Management companies have products that can make a great sales team very powerful. Plug in good leads, and an understanding of the marketplace, and great things like 2000% ROI happen.
Noel Collins | Jul 20, 2008 | Reply
I’m pretty sure Insider was joking Jeff, lol, we’ve tackled the issue of price points and feedback to the lead providers many times in the past.
LC started the topic on the forum when he revamped the look a few months back. It has been viewed several hundred times.
Jay has good results and also negiotiates one of the lowest price points in the industry. It does help to have leads that are a third of what the competition is paying to maximize ROI, but increased conversion is ultimately the trick.
Jay are your numbers including purchase, refi (assume conforming, etc.)?
Raj Parekh | Jul 21, 2008 | Reply
Jay,
Were you able to achieve these results at Heartland Finance when your company was called that? I recall you attending Leads2007 as Heartland Finance. Are you buying leads outside the state of Illinois? How many LOs do you have working for you at Patriot? I only ask these questions because the quotes in your post above are also in a testimonial on the Leads360 website and you use many of the exact same words, which many of us have already read, so I was hoping for more detail to your path to success. I know you’ve been a client of 360 for quite some time and one of the early adopters of lead management software. I was just hoping to get more insight into what Heartland did, why it’s not in business anymore, why you started Patriot, how this company is different than Heartland, what states you’re buying leads in outside of Illinois, and what things you have instilled from a management perspective that helps your team take advantage of all the tools you offer to aid their efficiency? I hope you don’t think I’m prying, but I think your results are great and thought it would be helpful if you gave all of us more detail into what you do to achieve your success. Your company/former company seems to be a testament for the value of lead management in the mortgage space and I’m sure your experience would surely be valuable to those who are not achieving similar results and even those who would consider joining your organization.
Thanks,
SomeInsider | Jul 21, 2008 | Reply
Thanks for getting my back, Noel. Jeff, I absolutely was joking, hence the little “smiley face,” after my comment.
Andrew Coleman | Jul 21, 2008 | Reply
Our data from multiple industries (which is actual data, not a study) also supports the conclusions raised by this study. The faster one calls a lead, the higher the contact rate, as well as the ‘qualification’ rate. Our actaul data does not show as dramatic of a fall-off as the study, but certainly very material. Our first call - which is less than 3 minutes, yields 74% of all of our qualified contacts. That drops to 10% if we call in 3 hours, and then less than 3% if we wait until 8 hours.
Andrew Coleman - www.leadqual.com
Jay Dunsing | Jul 21, 2008 | Reply
To: Raj
FROM: Jay
Regarding your points made in the blog. My ROI at Heartland in November was 1260% on an average two month trailing data piece. More specifically, RGR was at 1554%, Low.com lead the pack at 2060%, LMB Select 1144%, LMB Premier at 856%, QuinStreet at 1317%, LMB Advantage 1637%, Nextag 1064% producing in aggregate a 1260% ROI. The average 3 month ROI was 1152% in November. Secondly, I now purchase leads in IL, IN, MO, and CA. Thirdly, I have currently 11 producing LO’s. Fourthly, Heartland is not in business for the simple reason of the secondary market turmoil. Specifically, I couldn’t buy back loans sold in 2002-2003 that went into foreclosure in 2006-2007. The lenders we sold these loans to were happy to collect the payments for 3-4 years but when they went bad they said the appraisal was bad!!!??? David vs. Goliath fight would have ensued. Fifthly, Patriot is not my company. However, we are employing somewhat of a different business model than Heartland. It’s a lot easier to manage 11 people directly in the office than 200+ in fragmented offices throughout the country. I should have followed what some of the lead vendors suggested and started building larger offices in select localities rather than having 3-4 people work in say the Indianapolis office. Sixthly, from a management and/or a lead management standpoint I am utilizing what Leads360 offers to a much greater extent, most specifically in “Pull Distribution”. I have 6 different ways for each LO to source clients. Lastly, we put 8 loans into process today and have taken 14 applications by 1:14 CST. Should close 12-15 loans this week out of 80 in process before the new 8. Hope this helps.
For me my ROI is more a function of closing deals (revenue) and less a function of driving down price, although I do that too. Call me if you want as long as you don’t do business in the midwest.
Jay Dunsing | Jul 21, 2008 | Reply
Noel,
Do you think that I am in Purchase? Call me and I’ll inform you as to what I am doing and experiencing.
Love,
Jay
Raj Parekh | Jul 21, 2008 | Reply
Thank you for your insight. You obviously have implemented very successful best practice methodology. I wish you the best of luck at Patriot.
Jay Dunsing | Jul 22, 2008 | Reply
Several more items. I don’t know who you are but I have to give Leads360 a lot of the credit for our success. I try to implement all of their features from utilizing “Pull Distribution” to its highest extent (spacing out the finite number of calls each LO makes is huge), Drip email ( I do an informationally based email every day to each client we haven’t spoke to YET), “Push Distribution” (Where each LO is notified by email and a pop-up that they just received a new lead) is GIGANTIC for reaction time, and my use of their “Custom Reports” feature in management (I can see in real time how my office is performing). Hope this helps. If you don’t do business with Leads360 YOU SHOULD!!!
Raj Parekh | Jul 22, 2008 | Reply
Well if there were any doubts as to Jay’s intention, I think it’s pretty clear now that you can discount everything said as a ‘blog based’ advertisement for Leads360. Thanks Jay for the clarification. I agree with the intent in your post though. I think if you don’t do business with a lead management system, you should, but don’t do a disservice to yourself by only looking at one. Look at all the players in the space before you make a decision. Each player has something unique to offer that can contribute to efficiency and increased conversions. You may find that you have missed out on or overlooked some really important technological enhancements that may make your experience even better. The fact that you don’t know who I am leads me to believe that you have never explored the possibilities. I have friends who believe their honda accord is a great car, which it is, but they also admit that they have never been in a mercedes benz before. Good luck to you.
LeadSnob | Jul 22, 2008 | Reply
I only choose my Lead Management Partners by their ability to produce quality rap videos.
Anyone see this? yo yo yo… http://www.youtube.com/watch?v=ICcj8aDfzCA
Glad to see that office in downtown Watts has an extra layer of data security…barb wire reinforced chain link fence.
Where’s the Fusball table guys?
PEACE OUT
Lead Critic | Jul 22, 2008 | Reply
lol!
Noel Collins | Jul 22, 2008 | Reply
ouch…
Jay Dunsing | Jul 24, 2008 | Reply
Raj,
While I like Leads360 I am not married to them. What do the other lead management systems offer that Leads360 may not? Back in the summer of 2005 we checked out LeadROI, LeadMailbox and others but Leads360 I thought offered the biggest bang for the buck. Maybe I made a mistake.
Jay
John | Jul 30, 2008 | Reply
I use InsideSales.com for my company’s lead management solution, the company that sponsored the study. It is not built specifically for the Mortgage space, but is facilitates all of the best practices defined in the MIT study mentioned in the post. We have been very successful for the most part. They have helped with implementing best practices; they helped us with all of our phone scripts, pre-recorded voice messages, emails, calling strategies, etc. They have one feature that has been very good for us; it’s a web form immediate call back.