Tuesday, June 30, 2009

Give me your data! Why data sharing is such a hot topic in the lead industry.

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Few subjects have given me more heartburn over the past year than data sharing. Not because I oppose sharing data, quite the opposite, but because my company has lots of it, probably more, useful data than any other company in the industry. Everyone, especially lead generators, want to get access to the data and they want to get it in as raw a form as possible. The heartburn comes from managing the diverse interests of my customers, my partners, the company I work for and the industry at large.

 

To put a little more flesh on the discussion let me explain, for those that don’t know, that I work for Leads360, the market leading software solution for managing leads. We have in our live database many millions of leads and the milestones associated with whether the lead was contacted, if it was qualified and whether it converted or not. Beyond the size of the data set what makes this data very enticing is that it comes from over one thousand lead sources and aggregates the outcomes of leads being worked by over three thousand lead buying companies. No other data set of its kind is as comprehensive. The other thing that you should know is that contractually my company has the right, to share the dataset I mention in aggregate form for commercial purposes.

 

The dilemma for our company has been several fold. First, who should we share the data with? Leads360’s first duty is to our customers, and so one thing that Leads360 is crystal clear on is that we won’t share customers data, even at a depersonalized level without the data owner’s permission. Beyond that, Leads360 wants to play a role that ensures that our customers continue to be more successful than any lead buyer out there not using our system. To this extent we have a duty to continue to deliver market-leading analytical tools to our client base. However, lead providers are very important partners to Leads360 and they can make very immediate use of any data we could share with them. That being said, if we give data to lead providers will they figure out which leads they can charge our customers more money for or will they use the data to improve the quality of their leads thus benefiting our customers?

 

Another question we have struggled with is that if we do share data how much should we charge? Leads360 spent thousands of man-hours last year cleaning the data in order to make sure, for example, that one company’s definition of qualification was the same as another’s.  It would be commercially na├»ve not to recoup and profit from that investment in one form or another.

 

So we have wrestled with all these questions and I think we have a very well thought through strategy for data sharing. Unfortunately, I can’t share every detail yet. What I can say is that Leads360 continues to focus on the needs of our customers. We will bring to market products that simply can’t be replicated by anyone else that continue to make using our product a practical necessity for lead buyers. Beyond that we do want to help lead providers do two things; first we want to provide sufficient data to enable lead providers to coach our clients on how to be more successful with their leads, that is important and helps our customer, our partner and us so it’s a no-brainer. Second, we want to provide our closest partners with the ability to be self-analytical enough to drive towards a better product. That way we ensure that we continue to remain close with the best lead providers and they continue to have an edge by being close and exclusive with us. I am quite excited because over the next few weeks there will be announcements that are much more specific about what we are doing with data. I think it will begin to transform the industry.

Wednesday, June 24, 2009

Is Zillow the Future of the Lead Generation Industry?

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The lead generation industry is changing. I believe that lead generation companies that ignore this fact or are too arrogant to accept it will either lose market share or simply go out of business within the next two years.

Ever since I first saw Zillow’s Mortgage Marketplace I realized that there was a new breed of lead generator emerging that would turn the industry on its head. Why? Because consumers are just a lot more savvy than they were five years ago. I think they are too suspicious of lead generators. I watched a LendingTree consumer focus group about a year ago where just about everyone on it had had bad experiences with lead providers. They all seemed to recognize that entering their information online could and probably would lead to a barrage of phone calls that they didn’t really want. They wanted answers, quickly, reliably and without having a conversation with anyone but that is the opposite of what they got. That’s what I call a broken model. A model where the consumer knows what they want but can’t get it. Models like this have a habit of imploding messily, ask any executive at a music company..

 

Zillow answers the fundamental consumer pain point with the lead generation model neatly. With Zillow Mortgage Marketplace consumers enter information about the mortgage they need and the home they are trying to finance just like other mortgage lead generators usually do. However, they do not allow the consumer to enter their personal information like name, email address and telephone number before the lead is submitted. Leads arrive with the lender without any information that allows them to contact the lead. Instead, the lead provider needs to submit back a quote to the consumer for the mortgage that they are looking for. The consumer then typically sifts through several quotes and a short description of each lender before deciding if they want to contact any of them.

 

This might sound like a cumbersome process for the lender and that was one of my concerns when I first saw the model. However, I quickly realized that the process could actually be easily streamlined by connecting Zillow up with a lead management system and a pricing engines so that a quote could automatically be generated and sent back to the consumer by each lender based on the rates only available to that particular lender. It is a testament to an innovative company that when I emailed this idea to one of Zillow’s product managers I had a team of Zillow folks take a conference call with me a few days later and within a few months they had made the idea a reality. Now when a consumer enters a loan request into Zillow, within a few seconds they receive back several quotes to chose from. I received 22 when I tried it for my own mortgage. From a consumer’s perspective it is a way superior experience than with a normal lead generator.

 

Something else that stands out about Zillow’s model is that it is free to participate in for both consumer and lender. What I mean by that is that leads are completely free. If I were a lender I would be all over this opportunity because it is clearly unsustainable; no lead provider can provide leads for free forever. However, during the past year Zillow Mortgage Marketplace has generated 373,531 free leads and has 4,855 participating lenders according to the statistics on their website. All of these have been free and I know for sure that at least one (mine) will have turned into a converted loan. In fact, I happen to know that Zillow leads actually convert fairly well across the board especially if you compare the percentage of leads that are contacted that close with other lead providers.

 

Given that the consumer experience is great, the leads are free and that they actually convert, it is a reasonable question to ask why Zillow has not been more successful than it has been. 373,531 leads is a lot of leads but is dwarfed by the number of leads that the behemoths in the industry like lowermybills and LendingTree produce in a year. I believe there are several answers that include the fact that people tend to be scared of what they don’t know and are confused by the Zillow model as well as the fact that Zillow doesn’t charge anything for leads in my opinion perversely makes potential buyers think that they are not worth bothering with. However, I think the main reason is that Zillow has singularly failed to put their weight into promoting their marketplace. Just about every lender I tell about Zillow leads has never heard of them before. If I were Zillow I would be charging a small amount of money for leads that contact the consumer and using that money to promote the product better among the lending community. I think doing so will make Zillow a force to be reckoned with in the industry.

 

So if the Zillow model does succeed in the mortgage lead generation industry, does the concept also have the breadth to succeed in other verticals? That would have to be the case if it was truly a concept that had the potential to change the industry. I think the answer is a complicated one. I can think of industries in which the concept is just about perfect and I can think of others where it is considerably less appropriate. For instance, I can imagine that the Zillow model would be perfect for the insurance industry where people are essentially price and feature shopping. However, for the model to work in an industry like education you would have to believe that prospective students are looking to compare colleges on the basis of price and a measurable set of features. To an extent I think they are; you can compare tuition fees, statistics on the percentage of students find work after degree completion and a variety of other metrics; however, in an industry like education I don’t think any of these factors are as important as the subjective selection criteria such as culture and fit. I think lead generation in education will be informed by the Zillow model but not fundamentally transformed.  Nevertheless if I am right then the next couple of years will be way more eventful for most lead generators than I think many of them are expecting. 

NEWS: Sparkroom successfully switches focus to Education and expands offering

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I noticed today that Sparkroom has had several significant wins in the education space recently. Premier Education Group, which has 21 privately owned campuses in northeastern states, just signed up for Sparkroom’s Lead Deliver and Lead IQ platforms. In the past few months they also picked up US Education Corporation, a division of Devry Inc.

This is interesting for several reasons. First, just a few months ago false rumors were circling in the lead generation industry that Sparkroom was down and out. That is clearly far from the case, the resource changes appear to have been associated with a shift in focus from mortgage to education. Second, the breadth of what Sparkroom is trying to achieve is now a little clearer. It is quite ambitious in scope since if you line up their products it seems like they are aiming to do campaign management, which competes with companies like DataMark, lead validation, which competes with companies with companies like TargusInfo and eBureau, lead analytics which has always been Sparkroom’s core competency and some very basic lead distribution, which arguably could be a minor move towards lead management, which would compete with companies like Leads360.

The fact that Sparkroom has focused on the education vertical makes a lot of sense though. The average lead price and cost per aquistion are higher and the marketing departments far more analytically driven than other heavy lead-using verticals pointing to the fact that there is both the funds to pay for the sophistication that Sparkroom brings plus value placed upon what Sparkroom promises to bring to the table. Given that what Sparkroom has to offer pushes the sophistication of the Lead Gen industry to a higher level I look forward to seeing many more press releases of wins in the education industry over the coming months.

Monday, June 22, 2009

Are Lead Exchanges Doomed?

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When I entered the lead generation industry a couple of years ago, all I ever heard about was lead exchanges. Lead providers were building them, independent companies were operating them and even mortgage CRM companies like Ellie Mae were starting to offer them. The smart money seemed to be on lead exchanges being a fundamental force of change in the lead industry. An individual as smart as Lew Ranieri, the inventor of mortgage securitization, even had a personal stake in a lead exchange called Root Markets.

Exchanges are appealing. I used to work at Andersen Consulting in the ‘90s and advised companies about their marketplace and exchange strategies. I even left Andersen Consulting to start an exchange in the soft commodity industry myself. So I am certainly not the least bit immune from “exchangitis”. However, the fact is that exchanges rarely work. The first mega-exchanges like Covisint in the auto industry which sucked up billions of dollars, that it appears would have been better spent on building better cars, failed spectacularly. I simply cannot name a successful business-to-business online exchange. I don't think there are any.

I believe that lead exchanges will fail. There are a variety of reasons that I believe this to be so:

1.     The economics of an exchange doesn’t pencil in the lead industry.

An exchange usually makes money by charging money to the buyer, seller or both. What this means is that to justify itself on a cost-basis the lead exchange has to be able to administer the transaction more cheaply than buyer and seller can currently. This can work in an industry with a lot of middle men since you can replace them with an exchange and save money. However, the lead industry doesn’t have too many middle men. Therefore to make a cost efficiency argument a lead exchange needs to be able to take on operational and administrational functions at the lead buying and selling companies far more cheaply than they can do it themselves. Lead generators are not very fat these days so replacing your sales and operational personnel with an exchange is far from easy and very risky. Furthermore, the economies of scale required by an exchange in order to allow them to operate far more efficiently than standalone lead generators are pretty large. To achieve these economies of scale you have to believe that only one or two exchanges will ultimately succeed. However,

2.     The Lead Exchange is not a “winner-take-all” industry

A winner-takes-all industry is one that lends itself to monopoly. In the absence of regulation, industry characteristics that make this occur are a) when a platform exists which has significant costs associated with switching from it even when something better comes along (Microsoft might be a good example) b) when there are huge costs associated with market entry and little incentive to be one of two players (railroads are a good example), c) when huge advantages exist from network effects, in other words as the network becomes larger the value to participants becomes exponentially higher (Facebook would fall into this category). 

A popular argument by those struck by “Exchangitis” is that a network effect is at play in the lead exchange industry. The more buyers and sellers you get the better off everyone is. The only problem with this argument, if you agree that having many more buyers and sellers is a good thing,  is that an exchange rarely succeeds because it possesses just one of the characteristics I mention above; the ones that succeed tend to have 3 or 4 of the factors going their way. If an exchange’s only reason for success is network effects then what I have generally observed happening is that a huge amount of money is consumed trying to get sufficient “traction” i.e. getting enough buyers and sellers to participate at the same time to make the network effects a reality. Sadly I have never seen this strategy work, much to the considerable expense of many reputable venture capital firms.

Given these reasons I am skeptical that a lead exchange will ever be the dominant platform for lead transactions. I do think that certain companies could do some things that would give them a better chance of success but frankly I think the model is ultimately doomed to failure.

Wednesday, June 10, 2009

Lead Distribution: Creating the Right Sales Dynamic

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What defines the culture of sales in your organization more than anything else? Who you hire? How you incent your team? The goals you set? No. No. No. I am convinced the number one defining factor in a sales culture is how opportunities/leads are handed out to sales people. Add to this the fact that it has been proven that 43% of a sales likelihood of closing is determined by the quality of the sales process and the topic of distribution goes from being dull as ditchwater to actually rather important.

Why does distribution define culture?

To explain the impact of distribution let me give you two rather extreme examples of sales organizations with completely differing sales objectives. I’ll finish up with an overview of how I have structured distribution in my sales team and why I have designed it that way. 

Dog-Eat-Dog Distribution

First of all let’s consider a super-aggressive sales organization run by someone who wants to drive extreme levels of competition between their sales people, let’s call it Super-A Mortgages or SAM for short. The first thing that SAM wants to achieve is to make people fight for more than their fair share of leads. Leads are distributed as soon as they arrive at the company from the lead source and sales people are required to call the lead within 20 minutes of the lead arriving. The sales person is unable to just pretend that they have called the lead because the entire team has a dialer system that automatically logs the calls made and the call durations on each lead.

At SAM, the consequence of not calling the lead in 20 minutes is that your lead is redistributed to someone else. The lead essentially recycles from one sales person to the next until it lands with someone who calls it or it enters the “shark tank” (I’ll explain this concept shortly). At SAM leads rarely get recycled because the sales people are kept super-hungry. The distribution is set up so that each sales person only gets 5 leads distributed to them per day and the day’s lead flow stops completely if any of the leads are redistributed. A lead is redistributed twice before it goes into a queue that salespeople can use pull distribution to take as many leads per day, as they want from. This is called a shark tank, for obvious reasons. Sales sharks swim in the tank all day snapping up any leads that have been neglected.

However at SAM lead redistribution is not confined to new leads that have not been contacted. A rule exists that each lead must be called 10 times at a minimum of once every day and a maximum of twice every day or the lead is redistributed to someone else. 

Another feature of SAM’s distribution set up is that it is designed not to distribute leads evenly. SAM’s owner is an arch-capitalist and believes in the survival of the fittest as well as in protecting his marketing investments as best he can. He does this with the help of two metrics; sales executive closing ratios and lead score. SAM’s owner has a model that scores each lead when it arrives at the company based on how similar the lead is to leads that have closed for SAM in the past. He also monitors the percentage of leads that each salesperson receives that they close. SAM’s intelligent distribution system matches the highest scoring leads only with the highest achieving reps and conversely the lower scoring leads with the poorly performing reps. In order to ensure that sales folks don’t get stuck in a vicious or virtuous cycle because of the leads that they are receiving he has a 20% overlap of the scores that are classified as high and low quality leads.  Put another way, if you are a low performer and only receive poor leads you will probably stay so. However, if some of the leads you get are as good or better than the worst leads that the good reps are receiving then you can claw your way from being a low to a high performing salesperson.

Many people don’t want to work at companies like SAM. It’s hard, stressful and if you’re not on top of your game can be completely soul-destroying. However, I suspect that some of the best-paid sales people in the world do work at companies with a fairly similar culture to SAMs.

Soft-and-Fluffy Distribution

Many companies don’t want to push their salespeople to compete with one another. They want their sales team to be happy and comfortable so that they focus on being as patient and caring to their customers as possible. Our example of the will be the Benevolent Education Company, or BEC for short. BEC also distributes leads as soon as they arrive at the company. However, leads are distributed using a round-robin methodology. This is where leads are distributed completely evenly and fairly so that everyone receives an equal number of leads. To make this even more egalitarian leads are scored and the high scoring leads are distributed by a different lead distribution system to the low scoring leads to make sure everyone receives an equal number of good and bad leads. The owner of BEC doesn’t want reps to suffer at the hands of bad luck.

Sales reps at BEC are distributed 4 leads per day. Once everyone on the team has received 4 leads then new leads start going into a lead queue that sales people can pull from as soon as they have no leads allocated to them that have not been contacted. BEC doesn’t redistribute leads if a rep does not work them quickly; reps are trusted to work diligently without automated inducement.

Working at BEC is relaxed and the atmosphere collegiate.

My Distribution System 

I wonder if you can detect from what I’ve written whether the distribution program that I have set up for my sales team is more like SAM’s or BEC’s. Obviously it is somewhere between the two but if I’m honest it is more like BEC’s than SAM’s. My team is encouraged to compete but teamwork and the enjoyment levels of working at Leads360 are emphasized quite highly. The people that I hire have to be able to spend a lot of time explaining a piece of technology that is powerful, feature rich and not trivially priced. I need them to be experts, stay with the company and most of all to spend enough time with each potential customer to get them comfortable with what we have to offer. That doesn’t happen in an environment where leads are continuously snapped away and sales people are directly pitted against one another.

At Leads360 we have a distribution program for each lead source of which there are about 40 or 50 active at any one time (we have a very good and energetic marketing team).  We do this to make sure that leads are distributed evenly across sources as some sources are better than others. We do not often use shark tanks but brand new leads are redistributed if they are not called within the first 2 hours of the rep receiving the lead. After the first call the rep must call the lead once every day for 6 working days or the lead is redistributed and reps are expected to leave a voicemail on the first and last call. If the lead is not contacted by the sixth and final call we place the lead in a nurture status which sends automated emails to the customer at regular intervals for the following 30 days. The system works, I want share our closing ratio but I can tell you it is impressively high. I must admit it helps to have the best product on the market but I do believe a lot of our sales success is due to a robust process.

So what kind of culture do you want in your sales team? Does the way you distribute leads currently reflect this culture? If not you are out of synch; getting the goal and the means aligned could well create the boost in sales performance that has likely been evading you. I have never seen a high-performing sales team where the two are not aligned.

Sunday, June 7, 2009

Building a Sales Machine

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I am fortunate. I not only have a job but I also have one that I really love doing. I have a pretty unusual role, running both strategy and sales at my company, but it works. It probably makes sense in the context of Leads360 in particular because we produce software designed to make sales teams successful. Me having a deep and direct understanding of the sales process really helps to inform my point of view when I contribute to strategic discussions about our product roadmap. Running the sales team also gives me a great opportunity to experiment.

The sales team at Leads360 then is part conventional sales team and part laboratory. We even have a fulltime MIT graduate helping us with data analytics and continuous operational improvement. It’s an exciting and fast moving environment. I sometimes pity my team who put up with my experiments on a weekly and sometimes daily basis. Whether it is commission structures, goals, metrics, distribution workflow or a combination of all of them the only constant is that everything changes continuously.

We learn a lot from the experiments that we conduct for a number of reasons:

a) Sales is a highly data-rich environment. Testing hypotheses and drawing conclusions is therefore fast and reliable

b) Leads360 produces the software that we use to run the sales process; if there are things that I find work in the sales process we not only enjoy a revenue gain we get to improve our product.

One of the over-riding drivers for this blog is that I want to share the findings that come out of my sales laboratory and in return hear what other sales teams do to improve performance.  I’ll start in my next post with some examples of massive productivity gains that can be created just by tweaking the way leads are distributed.

Friday, June 5, 2009

Lead Gen 2.0 - The future of Lead Generation

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Obviously this is just my opinion but at the end of the day that is what a blog is all about. I have some strong impressions on the direction of the industry and firmly believe that a sea-change is underway. I call it Lead Gen 2.0 even though it has nothing much to do with the social-centric, folksonomic drivers of Web 2.0. Sorry, I just don’t think the future of lead gen has anything to do with Twitter or Facebook ;-)

Like all technology revolutions, in my opinion Lead Gen 2.0 will be driven by consumer dissatisfaction with what went before it (Lead Gen 1.0). Consumer pain that has been simmering for some time will lead to a dramatic change in the nature of demand once a set of progressive-thinking industry players figure out how to provide products and services that serve consumers better. That’s how people like Kevin Rose at Digg took on Yahoo! and how Jeremy Stoppleman at Yelp! has taken on CitySearch in the Web 2.0 revolution. They figured out that consumers were tired of being told what to think and do by “big media” and actually prefer to rely more on the wisdom of crowds.

So what is really painful about lead generation from a consumer’s point of view? Gosh, where do I start? Whichever way you dress it up, from a consumer’s point of view the experience of “being a lead” is fairly horrible. A consumer responds to some form of inducement to hand over their information and is then invariably called/pursued by multiple (read: “more than hoped for”) vendors.  I remember completing a loan lead form back in 2006 to see what happened and receiving the attention of 14 mortgage providers. I still receive form letters from some of them!

It isn’t news to anyone who’s honest with themselves in the lead gen industry that consumer pain is high and that the industry needs to move on just to survive. If nothing else, it is becoming increasingly difficult to get consumers who have been burnt in the past to part with their information when they are unsure of who is actually going to call them. So where to next?

I think the answer lies in thinking about what the consumer is actually looking for when they embark on a trip to the Internet for information. In most cases where leads are generated I believe that the consumer set out with the following goals:

  1. To compare prices
  2. To find provider ratings that they trust
  3. To compare products and service details 

In conjunction with this I believe that control is important. The consumer needs to feel like they are driving the process. Lead Gen does much of this but in a sub-optimal way. You only get to compare a handful of providers and only on their terms i.e. if and when they decide to call you.

Lead Gen 2.0 is about putting more power into the hands of the consumer. It is about letting them qualify sellers before they are put in touch with them. My favorite example of a Lead Gen 2.0 provider is Zillow. Zillow’s Mortgage Marketplace is a great idea, well executed and marks a significant paradigm shift in lead generation.

For those readers who are unaware of exactly what Zillow mortgage marketplace does, let me briefly summarize. The process is as follows:

  1. Consumer enters information about the mortgage product they are looking for but DOES NOT provide any personal information
  2. The inquiry is sent to every Zillow-validated lender
  3. Most lenders receive the lead into a lead management system, generate an auto-quote based on the rates available to them and send instantaneously send a quote back to Zillow
  4. Old-school lenders with no auto-quoting capability respond manually to inquiries that pique their interest
  5. The consumer is presented, within a few seconds, with a list of quotes, the name and contact details of the lenders who provided them and the ability to contact the lender to find out more information.
  6. To reduce bait and switch situations lenders are rated, eBay-style by consumers who have received quotes from them.

This is a consumer-centric service in which everyone wins. Zillow currently charges nothing for inquiries so lenders have access to a remarkably cost-effective marketing channel. Consumers have choice and control, which I would argue is exactly what they are looking for.

In the UK consumers completely reject the notion of providing their information without a clear promise that they will retain control of who they are put in contact with. This is reflected in the services that are popular in the UK. The largest financial product lead generator is MoneySupermarket; this company aggregates and instantaneously displays rates for thousands of service providers before connecting consumers to those companies.

In this new world of lead generation new rules apply. First of all, whereas lead providers used to become successful mainly through expertise in marketing rate arbitrage, they now need to become well-versed in building comprehensive price/rate and product description engines. It also means that there is increasingly less room for many players. There is currently a very long tail of small lead providers. If the prevailing model is one where a large number of competing offers are aggregated and displayed to consumers, this has the characteristics of a winner-takes-all or a few-take-all market. Large, innovative lead generators will dominate and small ones will shrink or serve ever more obscure niches. For many of the current players in the industry, the thought of this outcome is frightening. However, an industry that better serves the consumer is a stronger industry in which brave, innovative and focused organizations prevail. I am looking forward to the challenge!

Tuesday, June 2, 2009

7. Value-Added Products: Transforming Leads into Customers

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We have arrived at the final post in this Leads101 series, as far downstream in the value chain as we will go; the period during which a lead or prospect turns into a revenue generating entity – also know as a customer. What we are really talking about here are the additional pieces of technology that you can use to either close the deal or manage your customer – pricing engines and customer relationship managements systems. Each of which have slightly different flavors in each vertical.

Pricing Engines

Until recently a mortgage broker, insurance agent, personal loan officer or any other individual that offered products with prices that frequently changed would use a physical rate sheet to price loans. In my living memory this was typically a sheet or two of paper with a table of prices on it faxed on a daily or weekly basis by the bank, insurance company etc. The Internet era has changed that. Prices change more frequently and consumers expect more instantaneous gratification necessitating a more automated system of quote delivery.

Many verticals in which there is heavy utilization of Internet leads also rely upon automated pricing solutions in order to help close customers. In most industries these engines come in two different kinds.

1. Auto-pricing

Auto pricing has the ability to take in lead data and return an automated quote or multiple quotes on behalf of the seller, usually by email but sometimes on the a screen subsequent to the one where the consumer has entered their data.

2. Manual pricing

Manual pricing is one that involves a seller making tweaks and adjustments in order to find the best products available for a customer. Typically sellers have access to these pricing engines while they discuss the consumer’s needs over the phone and are able to quote and often lock in a price for a product on the call. This is a very common use in both the mortgage and insurance industries.

Mortgage Pricing Engines

Pricing engines in the mortgage industry compete on a few criteria; the number of lenders that they integrate with, the accuracy of the quotes that they are able to deliver and the user-friendliness of the interface. There are several major players in the market, all of which have great systems for manual pricing, auto-pricing or both. The larger and better ones also integrate with lead management systems to provide a seamless way to receive leads and auto quote on them. The following is a list of the major mortgage pricing solutions, starting with the market leader:

Insurance Pricing Engines

Insurance, in some ways is a little more complicated than the mortgage industry. First of all, there is a significant difference between how one prices policies between each insurance sub-categories (auto, home, health and life). This is a far less evolved space than in the mortgage industry, many of the pricing engine solutions primarily relying upon screen-scraping and document scanning to get insurance rates versus direct feeds from the policy writers. The major solutions in this space are as follows:

Auto/Home

Health/Life

Administration Systems

Administration systems cover a large clutch of disparate “back-end” pieces of software that are used to get a lead through an application, conversion and ongoing retention cycle. Every industry that uses leads has it’s own flavor of administration system. In the mortgage industry these are called Loan Origination Systems; in Insurance, Agency Management Systems; In Education, Student Management Systems etc. During the later stages of the sales cycle in organizations that follow robust processes, leads will typically be passed from a lead management system to an administrative system for an application or revenue-generating event/conversion to take place.

Summary

And now that we have covered the entire lead cycle from lead submission to conversion we are at the end of the Leads 101 course. Hopefully it is a useful introduction to the lead industry and levels the playing field in a sector that suffers from significant levels of information opacity.

Hopefully, with collaboration from peers, this board may continue to provide useful information and views for and from lead experts and neophytes alike. My next subject will be about my views about the future direction of the lead industry: stay tuned.