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Keeping it real time

National Mortgage Professional
May 25, 2007

E-mail lead incubation helps brokers hatch closed loans from dead leadsGene Devinehatching closed loans from dead leads, incubation marketing, critical e-mail design considerations In today's tight market, it is imperative to keep a steady stream of leads in your pipeline. Lead generation is capital intensive, yet conversion rates from lead to funded loan range from less than one percent up to eight percent for the savviest mortgage marketers. What can retail originators do to lift conversion rates without increasing loan acquisition marketing costs? Lead incubation may be your perfect answer. Hatching closed loans from dead leads Lead incubation is an innovative new business marketing strategy that can increase conversion, lower marketing acquisition costs and increase fee income from leads once considered dead. Retail originators can identify aged leads that have yet to fund and then utilize new business intelligence to fine-tune messaging and re-market to those previously ignored yet potentially valuable leads. The result is a predictably steady source of fundings - hatching closed loans from leads previously considered dead. The lead incubation process requires application of sophisticated fundamentals of direct marketing across a robust e-mail marketing platform, beginning with the evaluation and understanding of an originator's marketing and lead generation initiatives. This requires significant analysis and modeling on your current lead generation programs to understand where and why your leads are falling off. E-mail lead incubation deploys a very different marketing strategy than typical new customer e-mail marketing initiatives. It begins with a known prospect (which may previously have been considered dead) that has shown an interest and meets basic credit criteria, but has yet to convert to a closed loan. Because each retail originator has different lead qualifications, sales and back-office processes, a lead can fall out at many different points in the origination cycle. Since no two originators are alike, there is no off-the-shelf e-mail marketing solution that all originators can deploy to generate consistently high conversion rates to make lead incubation marketing successful. Getting started Successful lead incubation marketing begins with the evaluation and understanding of your marketing and lead generation initiatives. This requires significant analysis and modeling on your current lead generation programs to comprehend where your leads are falling off in the sales and funding cycle, and why. Choose an experienced solutions provider with combat experience in lead incubation techniques or you could end up being their guinea pig - at your expense. Thoroughly analyzed results will provide a comprehensive understanding of your response and conversion rates by lead channel. Next, create a custom-tailored lead incubation strategy that incorporates all of your specific needs, including projected lift in pull through rates and expected return on investment (ROI). Results differ by originator. Your custom lead incubation marketing solution should begin with a base of prospect/customer lead-initiated actions at the time the candidate is interested in a potential mortgage loan. Instead of dropping into oblivion if they do not fund, the lead incubation marketing solution revisits the prospect with a strategically developed series of direct, one-on-one e-mail messages and offers, sent on a set frequency schedule by a defined incubation pathway determined by the specific stage of case for each funding prospect. Critical e-mail design considerations Each e-mail communication must deliver relevant product and needs-based content designed to drive a response back to you once the prospect is back in market. Design your e-mail marketing communications with three primary objectives: 1. Identify each prospect's sales stage of case to predict when they will be back in the market and ready to apply. 2. Utilize proven direct response marketing copy and offers that invoke a ready-to-apply response. 3. Always include a response to apply. Each lead-directed communication must be written to create a continuous dialogue of information that can be automatically adjusted based on the prospect interaction with each e-mail that generates a response. Targeting the most lucrative incubation leads Purchase money leads are ideal candidates for lead incubation. Internet aggregators commonly sell these leads far below refinance leads because their sales cycle is so long that lead-dependent originators don't purchase these leads. Other top candidates for lead incubation include: -New construction finance leads, which typically have long sales process cycles -Pre-qualified applicants who weren't ready to transact at your initial point of contact -Non-approved prospects that were denied on credit or collateral issues, but may be back in the market after clearing up these issues -Registered users from online lead generation Web sites who may be back in the market and ready to transact Your one-on-one e-mail messages are a strategic component to the success of your lead incubation program. Content must be timely and relevant to each prospect's stage of case and designed to invoke a response. You must accurately measure by specific finite variables; i.e., which prospects are reading your e-mails, and of those, which are responding, which are funding and, importantly, which are driving your greatest ROI. This requires a high level of sophisticated analysis and modeling, but the results will enable you to make informed and statistically valid business decisions to target your highest propensity prospects. If you want to keep and build market share, lead incubation can help savvy retail originators increase prospect-to-funding ratios to gain a solid competitive edge in a difficult market. Consider the possibilities. Gene Devine is executive vice president of Intellidyn Corporation, a marketing analytics firm based in Boston. He may be reached by visiting www.intellidyn.com.
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