Sparkroom announced two very important milestones today. Firstly, and most importantly, we announced that Premier Education Group (PEG) is now working with Sparkroom. PEG’s brands include Branford Hall Career Institute, Salter College, The Salter School, Seacoast Career Schools, Suburban Technical School and Harris School of Business. We are thrilled to be working with Tony McPeck and his team and are excited to help them solve some of their most pressing sales & marketing issues.

Secondly, we are pleased to announce Sparkroom Lead Deliver, which PEG is implementing. Lead Deliver performs real-time lead capture, scrubbing and distribution and is integrated with leading CRM platforms in the EDU vertical. Tony captured the essence of the product when he said:

“We have always managed our vendor relationships in-house but we have lacked a technology platform that can aggregate, validate and distribute our leads quickly and efficiently. We selected Sparkroom Lead Deliver to solve those problems.”

See the press release here.  We look forward to a great partnership with PEG and to continued adoption of the Lead Deliver product in the marketplace.

Today we announced the launch of Sparkroom Lead Market Analytics. Read the full release here. We believe that this new product is important. Why? Because it begins to deliver transparency to an opaque and confusing market. Information is power. Transparency is inevitable in an online world where there is lots and lots of data. What Lead Market Analytics does is simple. It provides lead buyers with the tools and data to benchmark their performance vs. an aggregated industry data set. This is important because it helps buyers figure out what they are good at — where their competitive advantage lies.

A couple of key points to make:

1. To get access to the data, you have to contribute data. We call this community. You have to participate to gain the benefits.
2. Your data will always be anonymous. Competitors will not be able to identify any individual lender. This is the power of having data aggregated across an entire market. Very powerful.

Lead Critic covers it here.

Let us know what you think. We are at the LendingTree Summit in Charlotte this week and the Targus Online Lead Quality Summit in Vegas next week.

Some Insider posted the last entry in his opus on the “ever-elusive ROI” on LeadCritic last night. Read the full post here. He has this to say about Sparkroom:

“If you are not good with data, or don’t have the time to do the mining yourself, LeadCritic did a write-up on new company, Sparkroom, that can actually do this for you (this is an unsolicited endorsement, for the record. I have clients that are currently using the product and so far I have liked what I have seen). Not only can their product mine the lead data and bridge the gap between costs and income, but they make that data actionable and tell you what to do with it via a consultative approach. Now, it still remains to be seen if their advice will be good, but I certainly am in favor of the concept.”

First of all, thanks to Some Insider for the unsolicited endorsement. Our only bone of contention with the endorsement is the qualification that “if you are not good with data”, use Sparkroom. While we do have clients who ask us to do everything for them, we also work with highly quantitative customers who really get data and the power of quantitative decision making. Those customers understand the power of having end-to-end reporting on the entire lead lifecycle and optimizing against the metric that matters. These customers also have amazing feedback on how to make Sparkroom Lead IQ better as well as the account management service that supports it.

One of the key themes for us coming out of LeadsCon is that what we do is hard. Doing hard things is a good thing — in business and in life. Some Insider talks about the difficulty that the Lead Management Systems have in delivering income data back to their customers, but it is also hard to accurately track cost data and to assign it to the right lead and the right filter. Add in the challenges around LendingTree CLO fees and it is no wonder that lenders don’t do a great job of accurately tracking cost or income.

The final problem is that once you have an accurate end-to-end view on cost and income of your lead buying program, you have to figure out what to do. This is hard too. More good news.

I read a couple of blog posts from the guys at Leads360 (Noel Collins at LeadCritic and Jeff Solomon) this morning. The premise of Noel’s post was that looking at the right data matters — Jeff’s takes it farther by noting that customers want, and I paraphrase, “answers – not reports or data.” This is insightful – business people don’t want software or reports. They want easy solutions that make their business better, make their lives better, etc. Riffing on this theme, I think the magic formula for managing any business is simplicity + good data + consistency.

Simplicity – pick the metrics that matter to your business and pay attention, very close attention to those metrics. Never pick more than five key metrics.

Good data – understand completely how you are capturing and measuring data.

Consistency – look at the data each day when you get to the office. Look at the data each week at your staff meeting. Look at the data each month as you review performance. Good habits are hard to break.

All that leads to the title of the post, run your business with a one-pager. The best general managers that I have worked with have a one page dashboard that they use to run their business on a daily basis. This works for small businesses and for large ones. I used to work closely with the team of people who ran the Disney theme parks. At lunch one day with the CEO of the business, I saw him pull a piece of paper out of his breast pocket. It was his one page dashboard. His four key metrics:

- number of visits to the park in the previous day (volume measure for his business)

- avg. wait time at the rides

- avg. spend per park visitor

- hotel occupancy rate and average daily rate

Our advice – pick your metrics, make sure you can gather the data accurately, and pay attention! Your business will be better for it.

Cost per lead? Cost per action? Lead volume? What metrics should lenders, online ed folks, car dealers optimize against? At Sparkroom, we are quantitative performance marketers. The space we know best is online. But we are also business people. So the simple answer is that smart marketers (and CEOs) must optimize against profitability.

What does that mean in the lending world?

Optimize unit economics and then find volume. I spoke to Sean Fenlon at DoublePositive today and he reminded me that lead performance optimization is about more than cost per action (cost per closed loan in the mortgage biz). Why? Because you have to consider the operational cost of having your call center burn through a huge number of low converting leads. High wage employees spending their day dialing phone numbers is not a good use of resources; further, it drives turnover which is the enemy of every call center and every mortgage company. All that makes a pretty compelling argument for using lower wage folks to do the dialing! Enter hot call transfer — but that is for another post. The point of referencing this story is that you need to consider the long-term viability of the unit economics in addition to the volume.

What is the definition of unit economics in the mortgage industry? It is a pretty simple calculation of “revenue” – “marketing cost” per closed loan. Revenue is defined as how much cash a lender earns per closed loan on a given lead provider, filter, state, credit band, etc. Marketing cost is defined as the total costs associated with buying leads from a given lead provider, filter, state, credit band, etc. Our job at Sparkroom is to find the best performing lead providers, filters, states, credit bands, etc. — on a unit basis — and to then be able to deliver them in volume to our customers.

Volume is pretty easy to understand. Generating loans in Wyoming might be exceptionally profitable on a per unit basis but because it is the least populated state in the United States, it is likely there is not enough volume in that geography to move the needle. So you not only need to find great per unit economics but you have to find them where there is enough volume to matter.

As a bright customer of ours says, “the numbers don’t lie.” But make sure that you are looking at the right metrics. Marketing efficiency is about way more than cost per lead or cost per action.