Over the past year, the advent of IDX and virtual office websites (VOW’s), along with a substantial increase in leads from third party aggregators, has sparked lead management to evolve from an art form to a brokerage management science.
Information about this new environment is now sufficient enough to provide a much clearer picture of both the form and function of a brokerage- based lead management program.
Before we discuss the electronic guideposts for a contemporary lead management program, take a moment to consider lead management’s outcome measurements.
First, the purpose of lead management is not to provide employment for those who no longer wish to answer the phone, or to create a place to “park” leads until a busy agent can fit them into their schedule.
Its true purpose is to capture leads and convert them into profitable transactions for the brokerage. Any other outcome measurements are just fun with numbers and pure fantasy. In other words, if the outcomes being tracked and measured don’t directly contribute to the bottom line, dump them.
The article focuses on virtual lead management rather than virtual lead generation. However, it’s sometimes difficult to separate the two. In today’s marketplace, they are coming together at the company website. Accordingly, website management is now an integral part of an effective overall lead management program, and not surprisingly the topic of next month’s article.
The essence of website management is recognizing that the site is the point of attraction and the place where the virtual lead is captured. Sites must be intriguing, enticing, and most of all consumer-centric. Since these objectives can be elusive, a website management plan should be highly flexible in both design and format.
Generating virtual leads is like going fishing. The website is your lure. Depending on how they’re biting that day, you have to be willing to change lures if your present one isn’t working.
You need a site that can be changed, refreshed and updated as market conditions change. The firm must be able to try out different designs and functionality based on their ability to convert site visits to leads and on their ongoing lead sampling activities.
Today, most firms generate leads through either an external vendor or an internal lead generation program. Whatever combination is used it must include both online and conventional lead management techniques.
Given the realities of what’s happening in today’s Internet powered industry the clear emphasis must be on Internet or virtual leads.
Many managers and executives continue to question the value of programs such as HomeGain, MostHome, Lending Tree, Yahoo and other third party lead aggregators. While these arguments may provide fuel for intellectual debate, they do little to enhance lead management.
The real judge of value with respect to these on-line entities is the consumer -- and the outcome of that vote is equally clear as consumer utilization rates continue to increase every quarter.
Recent research shows that over seventy percent of consumers spend months perusing the Net prior to contacting an agent. Yet, a significant percentage of brokers have not yet established virtual lead generation and capture programs on their sites.
This has lead to an environment in which virtual lead generation is increasingly controlled by new class of third party service providers. Firms that hope to transition their street market power to the Internet should be moving in this direction as quickly as possible.
Just like taking mortgage applications, the first step of a lead management program is to measure the quality and potential of the lead. Raw leads coming from either an in-house or third party program must be immediately screened, evaluated and qualified.
One of the most important developments in the past two years is the ability to conduct this initial qualification with software. Lead management systems without this electronic capability are simply “not with the program.”
Moreover, brokerages shouldn’t invest resources in leads that have not been pre-qualified. Once pre-qualified, a determination must be made whether or not the lead is encumbered or unencumbered. The best example of an “encumbered” leads are ones from a relocation network.
Most relo leads are embedded in an administrative package that, in addition to requiring a referral fee, includes very specific details on how the lead will be managed. Aggregators and referral programs such as Lending Tree are increasingly protecting their customers and value propositions by using these quality control and profitability systems.
If a firm is going to accept leads from these external providers, it will also have to meet the provider’s standards of business practice and customer care. Noncompliance will likely result in the firm being dropped from participation in the lead program.
Conversely, an in-house lead management program centers on leads that have been qualified and are “unencumbered”. It is at this point the firm begins to invest human resources in working the lead. The decision here is whether to create an in-house lead coordination program or to use an outside vendor.
To maximize its success in creating a unique and profitable consumer experience, the firm will probably create an in-house “lead incubation” program. However for firms still struggling with the full-service concept and having difficulty reallocating resources, an outside vendor’s call center program is clearly an appropriate option.
In time, the attractiveness of outsourcing these tasks will be further enhanced by allowing firms the option to tailor the service to their particular modus operandi.
The next challenge to creating a successful lead management program is in identifying the various steps in a successful incubation program. As the sophistication of lead management systems has evolved, this has proven to be a moving target. By way of example, about forty percent of consumers submit invalid or bogus information to virtual office websites just so they can gain access to the MLS database.
However, the industry has learned that, when given a validation opportunity, over ninety percent will provide true information if their online experience is productive. This means brokerages must add data validation functionality to the “back end” of the site.
Of course, a well-designed lead management site will also perform instant validation of the information initially provided by site visitors. As the industry’s experience with lead management increases, there will be many such steps and safeguards built into these programs.
Next, lead management must include a program to track, organize and follow leads through the entire process from start to finish. And, it will be much more effective if it includes the ability to classify leads. Lastly, any system must be able to display the current status of all leads both locally and remotely.
Lead management is a critical part of today’s successful brokerage business model. Getting the firm’s program up and keeping it current will require constant management attention.
Allocating the necessary technical and human resources, and focusing on conversion rates as the primary measurement, will ensure that virtual leads become a vital part of the profitability formula and not a drain on hard earned capital.
