lead tracking and conversion - todd katler

Present Day Realities of Lead

Tracking and Conversion

Topics:

• Lead Accuracy in Property Management Software

•Lead:Lease Conversion Metrics

Lead Accuracy inManagement Software

Questions:

• How accurate is the lead source data contained in my property

management software?

• If the data is not truly accurate, where are my leases coming from?

• Since 1 out of every 3 times people visit the property they get lost trying

to find it, how can ‘Drive By’ be responsible for 30% of my leases?


Solving The Equation:

• Call centers and other software packages digitally record the originating ad

source for each rental inquiry (no human bias/error).

• We conducted a study where the leases transacted were compared with the

original guest cards using a 3rd party software application to determine matches.

• The results show if the ad source data in the property management software

matches the original records as well as other interesting discussion points.


The Results:

For the population of leases where a match with a Level One guest cards exists:

32.6% of all leases were

sourced correctly(67.4% had a source other than what was recorded at lead origination)


Other Interesting Observations:

• Of the 13 paid ad sources included in the analysis, 11 created more leases

than they were credited.

• One of the sources was only given credit for 26.3% of the leases it

generated.

• Craig’s List was the most over-reported source – it received credit for 40.6%

more leases than it generated.


Other Interesting Observations, part 2:

On April 6th, 2008, www.pizza.com sold for $2.6M.

Internet-Other received credit for 13 times 13 times more leases than it generated!

As the most successful ad source in the industry, www.internet-other.com is now

owned by Todd Katler. The eBay auction will start next week with a $1M reserve…

http://www.pizza.com/

http://www.internet-other.com/



• 22.3% of leases were incorrectly attributed to ‘Drive By’ or ‘None’.

• Of the renters that set an appointment to tour and subsequently leased,

64.5% were recorded incorrectly despite the source being transmitted with the

visit notification.

• Of renters that applied sight-unseen, 60% were incorrectly recorded

despite the source being transmitted with the rental application.



• 18.2% of all leases came from leads that originated when the property was

closed.

And since you are all going to ask anyway….

• Both pay-for-performance ILS’s created more leases than they were given

credit for in the management software.

Lead:LeaseConversion Metrics

Questions:

• How can I rank my ad source effectiveness using Lead:Lease ratio?

• What are the limitations of using this metric?

• Everybody talks about Cost-Per-Lease, but how can I really track that

accurately?

• How do I manage the trade-off between ad source effectiveness, lease volume and cost per lease?

Visit Set Ratio (VSR) Demonstrates That Not All Leads Are Created Equal

This graph shows variance from the median VSR across

four companies.

Be mindful that you will have wildly different experiences with each ad source that will often differ by property or sub-market.


Solving The Equation:• Isolate the “real leads” from the “fake leads” (family, friends and vendors).

• You can also assume “fake leads” are a constant.

• The data must allow at least 3 months for the leads to convert into leases.

• It will take 5 months to achieve 80% accuracy and 8 months to achieve 90%+

accuracy.

• To establish conversion, you have to compare the renter names from the leads to

lease names in your management software.

• Do not use the source tracking in your software and simply divide those leases into

the total leads- this will produce a highly inaccurate ratio.


Solving The Equation, part 2:

• Use matching software to determine which of your leads became leases.

Computer algorithms are far more consistent and are not prone to fatigue.

• Use a significant sample over several months (if not longer).

• Do a smell test! Across you portfolio, lead:lease conversion should be between

3% - 7%. If it is not in that range, there may be an issue with the data.

• Depending on the accuracy of your data, Cost-Per-Lease becomes a trivial

calculation at this point.


Lead:Lease Conversion Limitations:• Not all leases from an ad source start as phone calls or emails. 20% - 50% of the leases

generated by your ad sources will not be considered in this exercise (even higher for sources

like Craig’s List).

• As the old saying goes:

#@!* in, #@!* out

• Accurate data will be the single most limiting factor and often prevent meaningful

analysis

• Your use and management of your ad source (as well as overall content management) may

vary greatly and will to some extent dictate your results.


What if this source is a high cost per lease?

Ad spend optimization tends to be possible at lower converting,

lower volume sources.

Remember that some of this

traffic originates at the other ILS’s.

lead tracking and conversion - todd katler

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