Silos of Lead Management
Since I departed from LeadROI and our acquiring company, Root Markets, I have still stayed relatively informed on the happenings in the space. I was researching the latest in lead management and found some interesting things. Although LeadROI’s product was focused on lead management for the mortgage space (as our acquisition press release reads), here I’ve taken a broader view of lead management software.
The Hottest Silo: Mortgage Lead Management
The lead management players in the mortgage space have been in hyper-competition mode for little over two years now. Granted I was in the space for those years, when I look outside in now, I can see that the innovation, competition, and best practices were in silos — mortgage lead management enjoying the most movement of late. It just came down to LeadROI, Leads360, and Kaleidico competing over features and outselling each other.
Leads360 closed its first round of funding to extend its presence into other verticals. I believe that Leads360 will do a terrific job extending into other verticals. I don’t believe that it’s a question of “how easy will it be for them to transfer their mortgage related, feature rich platform into these verticals” as the leadcritic.com author put it, but when.
Kaleidico will be announcing a new product or feature soon. I have this strange feeling that it might be related to being able to launch Google Adwords and your own landing pages from with their icoSales product. Maybe icoMarketing? If I’m wrong, Bill, you should launch this next.
Since I left LeadROI three months ago, my knowledge of the developments there are very limited to comment.
Other Silos: Automotive, Real Estate Lead Management, Multi-Channel
The automotive industry enjoyed this innovation and consolidation cycle far more earlier than the mortgage industry. AVV Web Control was launched in 1995 and was subsequently acquired by AutoByTel in 2003. Microsoft was raving about their auto dealer lead management offering DealerPoint.net in 2001, and then later sold it off to Reynolds and Reynolds in 2003.
Now, I imagine that the incumbents, large or small, control such a large share of the auto dealership space that it may be difficult to enter this space easily. On one hand you have a decade of features and best practices built into the software, on another you most likely have limited innovation. I can’t speak to this because I don’t come from that space.
Real estate has also experienced this cycle. Katabat was acquired in late 2005 by Dominion Enterprises. Katabat provides more than just a lead management system to Realtors, but also landing pages, advertising, content, and so much more. Another player in real estate is Broker1Suite.
When you start to expand beyond industry-focused lead management, and include lead management for multi-channels companies and partner management, I think of players such as Salesforce.com and BlueRoads. These solutions go as far as helping companies manage their partners who work their leads — much more complex than managing a set of loan officers that sit in your office.
Innovation in a Silo - Ignorance is bliss?
What does this all mean and give me an example of why I should care? you ask. Let’s take a look at when Kaleidico launched the feature to allow sales persons to ‘pull’ a lead when they are ready to work one. That sparked a lot of buzz around the concept. First, Jeff Solomon of Leads360 wrote his thoughts on this pull methodology. I disagree with Jeff’s statement that “This method is not as quick, but works well in situations where your sales team is not working in a real-time environment.” Simply put, with a lead pulling methodology you are asking the computer do all the thinking of what lead to work next. I’ll bet on the computer. Then, Bill Rice of Kaleidico wrote a response on why he introduced pull into the mortgage space, and I agree with most of what he says.
All that said, BlueRoads, a company founded in 2001 by Axel Schultze the co-founder of Postini (purchased by Google), introduced pull concepts in their early years, far before Kaleidico, Leads360, and LeadROI even existed. To put things in perspective, they have received a total of $25M, $9M in a recent round.
Further, one can view on the wikipedia page on lead management that there are others outside the mortgage lead management space that participate in updating the page.
Breaking up the Silos
I think that Leads360 can certainly be poised to expand to other verticals with their core offering. I believe that the value-add to other industries will be high because the mortgage space was a strong laboratory for lead management. Just from the acquisitions of LendingTree, LowerMyBills, and Nextag alone (over $2B collectively), we know that the mortgage space is among the pioneers in lead generation. I’m surprised that there is no lead management software specific to the education space (or is there?), yet we’re starting to see the massive funding and also consolidation of companies (examples here and here). Leads360 seems to even target vacuum salesmen — look at this closely. (Sorry 360, having a little fun with your dynamic landing page.)
I can think of a lot of questions. Could it be the case that lead management systems are better as niche software companies? Will or do CRM systems (Siebel, Salesforce, NetSuite, SalesNet, etc) or call center systems (Aspect, Promero) provide the necessary features needed for lead management and could this be a process silo altogether (lead management versus customer relationship management). Is there a reason why Microsoft sold off their auto product to an auto-specific service provider? AVV was acquired by AutoByTel, LeadROI was acquired by Root Markets, Katabat was acquired by Dominion Enterprises — these are all industry specific plays. If this is the case, any player wanting to provide a software for multiple niches will have to develop industry-specific integrations, hire experts in each vertical, build an understanding of the features necessary for the space, and so on.
This will be interesting to watch. Bottom line: we do need to see innovation that blends the knowledge, features, and best practices from the cumulative learnings across all silos.
October 16th, 2007 at 9:52 am
Atul,
I enjoyed your well researched and thought out post on the relatively young lead management space. However, I would like to add a couple of my own perspectives to the discussion:
1. Kaleidico was actually incorporated in 2003 and the early concepts of pull-based sales management are documented in my notebooks as early as 2000, with critical components of the technology reaching the market between late 2005 and early 2006. In fact, you got to witness some of it personally at Countrywide, a client at the time.
2. The coincidence of several similar innovations in “pull” for sales are closely tied to the popular discussions around pull-based marketing techniques arriving in 2000-2001.
3. We shouldn’t confuse focus with silos. Rarely does a start-up have the capital and resources to attack the whole market. Consequently, the fact that bootstrapped, self-funded, resource constrained start-ups choose to focus on a familar and rapidly growing market (mortgage 2000-2006) is not putting on blinders, it is smart business.
Overall, I think we are looking at the broader opportunity and focusing on achievable, iterative, execution.
October 16th, 2007 at 5:14 pm
Hi Atul,
My updates were basically because I am about to publish a book about business and alliance management and wanted to straighten a few things out.
Any way, I agree with you in full: Lead and opportunity management is a industry specific niche. It is a painful process of totally underestimated complexity. The process from a raw lead to a closed deal is as individual as the company that processes those opportunities. If it goes through channels of brokers, dealers, resellers the complexity grows even further. Together with a few other business executives we developed a very different view on opportunity management which I will describe in the book.
Axel
October 16th, 2007 at 6:44 pm
Atul, just to get the info on your blog right
http://www.linkedin.com/in/axelschultze
BlueRoads was founded 2001 by Axel Schultze - Axel was CEO of BlueRoads 2001 - December 2005.
Thanks
Marita
October 16th, 2007 at 7:42 pm
Bill,
Thanks for the update on the information. I know that Kaleidico has been an early mover of the pull methodology.
As far as silos, I did not attempt to say that companies should not ‘focus’. However, companies can focus on a specific niche or industry and continue to innovate with learnings from outside that specific space, or silo. But, I agree that, as start-ups, you can only implement so much of what is proven in other markets, especially if it takes time and resources to prove it within one’s own market.
Thanks for the comments,
Atul
December 11th, 2007 at 9:21 pm
[...] but none the less are going to benefit so many. I know I am maybe in my own little silo, as Atul Patel likes to say, but I am excited and feel that the industry is changing for the [...]