Online Origination: How KPI can give you clarity

by MPA05 Sep 2014
By Adam Stein
Special to MPA

Editor's note: Over the next few weeks, we'll be running expert online origination advice from Adam Stein, CEO of LoanTek.

Measuring a few common pipeline events, Key Performance Indicators (KPI), will provide clarity on what is occurring with your marketing budget and what you can reasonably expect as a return on investment. When these key performance indicators are applied and measured across both the lead sources and the sales force the performance of your pipeline becomes apparent. The KPI that we will study in this section are: ‘Assigned’ and ‘Contacted’. In later columns, we'll follow up with ‘Application’, ‘Qualified’, ‘Converted’, ‘Processing’, ‘Bad/Dead Lead’, and ‘Closed Won’.


Understanding Key Performance Indicators

Key Performance Indicators require discipline. Requiring consistent updating of your pipeline’s key performance indicators provides an indication of your consumer traction, developed sales opportunities, and lead quality. Moreover, KPI also provide understanding what’s actually underlying these statuses as it relates to the effort and skill of your sales force. Please review the following examples of common key performance indicators, their related cause and effect, and recommended solutions.


‘Assigned’ is synonymous with ‘potential’. An assigned lead has potential; but it hasn’t done anything for your pipeline yet. A new ‘Assigned’ contact arrives and the sales person is alerted. The assumption herein: the sales person delivers a timely response. The lead’s quality is subsequently based upon the prospect’s willingness to go forward in the process. Assigned leads are a neutral indicator of lead quality and sales effort. Assigned leads are only considered a negative KPI in the event that your pipeline becomes overly weighted in this regard. Too many assigned leads are never a good thing.

Negative ‘Assigned’ Example #1 - Wasted Leads

A sales person has 30 leads all of which are ‘assigned’. There are no notes, no evidence of ever being worked.
Solution: Use custom statuses –
‘Attempted’, ‘Attempted X2’, ‘Attempted X3’

Negative ‘Assigned’ Example #2 – Poor Lead Quality

A sales person has 30 leads from a given source, 17 of which are ‘assigned’, 13 are ‘bad/dead’ leads. Notes are well documented; evidence shows all leads are being worked, but minimal customer engagement, if any exists. The leads are not moving forward in the pipeline.
Solution: Change lead provider or lead type - before you burn out your sales force and budget on low quality leads.

Bad/Dead Leads

Bad leads are never ‘a good thing’. A pipeline heavily weighted with bad leads inherently reflects a poor investment. Typically bad leads relate to the quality of the leads being provided; lead quality, however, is not always the singular contributor to the number of bad/dead leads in your pipeline. Please review the following examples:

Negative ‘Bad Lead’ Example #1 – Poor Lead Quality

A sales person has 30 leads from a given source, 20 of which are ‘Bad/Dead’ leads. Notes document that when leads are worked there is a high instance of bad contact information, phone numbers, and email addresses. Customer engagement is predominantly along the lines of ‘I don’t know why you’re calling me’, or, ‘Why do you guys keep calling me - take me off your list!’
Solution: Change lead provider or lead type.

Negative ‘Bad Lead’ Example #2 – Loan Officer Fail

A sales person has 30 leads from a given source, 20 of which are ‘Bad/Dead’ leads. Other loan officers have the same lead source but with different (better) results. This can be a tell-tale sign of a sales person who is not suited to work leads; general notations say ‘Couldn’t help the customer’ or ‘Customer not interested’.
Solution: Promote the loan officer out of the lead pool.


Contacted leads are the first favorable indication of lead quality: Disinterested consumers don’t talk to loan officers; loan officers can’t close loans if they can’t talk to consumers. Lead pipelines that are heavily weighted with ‘contacted’ have great potential. If the contacts do not mature into qualified, in processing, or closed won, you may have a sales training issue, however.

Positive ‘Contacted’ Example #1 – Good Quality

A sales person has 30 leads from a given source 17 of which are ‘contacted’, 3 are at application or further along in the process. This reflects customers are engaged and moving through the pipeline. There’s still more opportunity to convert here.
Solution: Work through Contacted 1X-3X. If no further traction (a credit decision can’t be rendered) rotate the leads and give another loan officer a shot.

Negative ‘Contacted Example #2 – Poor Sales Ability

A sales person has 30 leads from a given source, 20 of which are ‘Contacted’ - nothing is moving forward in the pipeline. Notes are documented; leads are worked; high customer engagement.
Solution: Teach the loan officer closing skills before your leads burn out.

Adam Stein is the CEO of LoanTek.


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