Clients are typically so focused on lead acquisition strategies and metrics, that they lose sight of a equally important part of the process - LEAD DEVELOPMENT, the critical next step in the sales process after the lead comes through the door. Further, without good database CRM systems in place and good communications between client and agency, it is nearly impossible to close the analytics loop and accurately assess which campaigns drive the lowest acquisition costs. Take a mortgage bank or discount brokerage company for example, that gets hundreds of interested investors filling out account applications per day. We have clients in both industries, and have seen how leads are managed post acquisition, which is often times out of our control. How this process is handled can be the difference between black and red in the final ROI analysis.
So let’s stick with the mortgage bank example for now, and follow the sales process for a given day of the week -
- $5,000 in Pay Per Click advertising is spent across several search engines throughout the day on Monday, between 7am and 7pm.
- 100 leads come in through the website contact form, which are emailed directly to the sales manager.
- The sales manager gives what he feels are the best leads, those with highest loan balances or desired mortgage amount, to his best sales reps, and the balance of leads to his remaining reps.
- Reps call the leads immediately, and start files for promising leads, which then move to the next stage of the lead development process, running a credit check.
- Over the next 60 days, a number of applications move through the pipeline, and 5 loans are closed as a direct result of the $5,000 spend, which gives us a Cost Per Funded Loan of $1,000 (not bad at all, especially these days in the mortgage industry).
To be able to track to the specific Cost Per Funded Loan on a specific day’s spending, as noted in the last bullet point there, is typically a rare case for mortgage brokers and most other small to mid-sized businesses, reason being that when the process starts all over again, on Tuesday, and sales people do what they do best, pound the phones and move to close, the tracking function usually gets lost in the shuffle. Everyone, including the sales manager, is under such pressure to “CLOSE MORE LOANS”, that it becomes easier to just track budgets and ROI using simple math on the aggregate spending level - (ie, we spent $100,000 last month and closed 100 loans this month). So much is lost when analytics are ignored as such, that when times get tough in a specific industry or competition comes on strong, companies find themselves in panic mode and often make rushed decisions that once again, don’t involve optimal lead development and closed-loop analytics.
This is where good systems can save the day. Now imagine that, as the business owner or sales manager in the mortgage brokerage example, the following scenario existed -
- Each lead that comes through the website is scored automatically by a program, based on criteria set by the sales manager, and based on the lead scoring, distributed via email to the appropriate sales rep
- The leads are also saved in a web-based CRM database, along with detailed referral information, such as Referring Website/Search Engine, Keywords Used, Paid vs. Organic, Cost per that specific Lead and Registration Time Stamp (this way, sales manager can track which reps waste the least amount of time in following up with leads that come into their cue)
- Sales reps are forced to use the CRM to track communications with the lead, and escalate the lead up the pipeline through Win or Loss. Reps that work with Loan Officers to get Wins fastest might be rewarded in some way.
- Sales manager has a real-time dashboard which shows data on which marketing strategies, search engines, keywords and sales reps perform best and worst in a given time period - daily, weekly, monthly, quarterly or some custom data range.
- The Marketing department, whether in-house or agency led, has Closed-Loop Analytics that show Cost Per Funded Loan and Loan to Value (LTV) metrics by the same metrics that the sales manager has access to, above. This makes it easier to adjust budgets accordingly, to the best performing tactics. For example, in March, leads coming in via “debt consolidation” keyword searches, across all Search Engines, achieved a 40% lower Cost Per Funded Loan than those coming in through “refinance loan” and 120% lower than those coming in via “home mortgage”.
The difference between companies that put such systems in place and those that don’t, in the mortgage industry, can be as wide as $1,500 per funded loan. In other industries, the effect can be even more dramatic, and this is taking into consideration the costs involved in implementing CRM and Web Analytics systems.
“How much do I need to spend to get it setup correctly?” is a question that I often get. It really varies, depending on the type of product/service, sales process, website, and transaction volume that your business deals with. I would put the starting point at $5,000 - $10,000 on the low end, in order to cover consulting services, software licenses, integration, customization, and training fees.
Remember, what you do with the leads after they come in, has an equal if not greater impact on the bottom line than what it costs to acquire leads. I would love to hear from business owners, sales managers, relationship reps and marketing managers, on what kinds of pain points they have in the areas of lead development, CRM and analytics. Success stories would also be great to hear.