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  • 14 AUG 2007

    Blogging Leads2007: How to Make Money / Lead Buying 101

    A post by Chris Beauchamp as Leads2007

    A DoublePositive client and friend, Noel Collins of Equity Direct Mortgage, is leading this session which is focused on best practices in lead buying. This session is the best one yet — lots of really good discussion between lenders, lead generators/providers, and lead management system companies.

    So for lenders, what are the questions to ask of a lead provider? There are so many factors to consider for lead buyers when choosing a vendor.

    • What methods do you use to generate your leads?
    • Do you use affiliate advertising or co-registration?
    • Do you have references from companies of a similar size?
    • What do you generate yourself vs. what you purchase?
    • Are you licensed?
    • Do you have any data you can provide from your clients’ lead management systems?
    • What metrics can you provide me? Contact ratios, app ratios, cost per funded loan, cost per $1000, total ROI?
    • What is innovative about your company? What strategic partnerships do you have that will benefit your lead buyers (affiliates, data verification, credit bureaus)?
    • What education or advice can you give a lead buyer as to how we should best work your leads?

    There was some serious debate about whether these questions actually do any good For example, a lead provider is only going to give you a reference of a “raving fan,” so doesn’t that need to be taken with a grain of salt. For the lead generators (LMB, QuinnStreet, etc…), it’s important to know how the leads are generated, but that question is entirely different when answered by a lead provider or exchange.

    Maybe lead buyers shouldn’t be so concerned with the absolute numbers and metrics of the lead providers and instead concentrate on improving their numbers. In other words, if a lender’s CPFL is $1800, they shouldn’t be looking for the lead provider whose CPFL is $900 — they should be looking for a lead provider whose CPFL is simply less than $1800.

    There is a lot of disagreement as to what is success. What is an acceptable contact ratio? Time to contact?

    There are a couple of industry groups (Online Lead Generation Association, Internet Advertising Bureau) that just don’t have wide acceptance or recognition.. But should there be? How effective would it be? Should the companies in the room today be driving something like this?

    The lead generators need to be concerned with how the lender’s operation is setup to handle the leads. Do the leads go right to LO’s? Is there a pre-sales contact team that is working the leads? What are the followup methods that the lead buyer has in place to really work the leads hard?

    Expectations. The lead buying process all starts with how expectations are set with lead buyers. Many lenders have unrealistic expectations, or perhaps their expectations are wrong because they are trying to compare apples to oranges. Contact rates on leads generated from affiliates, organic search, paid search are all wildly different.

    The major lead buyers in the room (Equity Direct Mortgage, LEI Financial) seem more than willing to be transparent in letting the rest of the industry benefit from their knowledge on lead buying. Still, one major lead provider in the room shared a story about very large lead buyer who is having great success with their leads, but is less than willing to share their “special sauce.” Yet, so many lenders won’t share their best practices with anyone — lead providers or other lenders. Won’t more transparency in the industry help everyone be more successful?

    Our friend Tom from Low.com is more than willing to have his sales team not only promote and sell Low.com leads, but they will tell a lead buyer of what other lead generators they should try. After all, that helps us grow the lead generation industry AND make our clients more successful. We do the same at DoublePositive. Like investing in the stock market, buyers need a well balanced portfolio.

    WOW. This was a great session… Noel Collins was fantastic (the first one to get a round of applause). The “threesome” that can really benefit from cooperation and best practices — lead management systems, lead providers, and lenders.

    You just read:

    Blogging Leads2007: How to Make Money / Lead Buying 101 by Chris Beauchamp

1

    Noel Collins 1638 days ago

    I thank you for the kind words but truly believe it was the atmosphere and receptiveness of our industry leaders that allowed such great conversations.

    Thanks for the props guys, glad to have spent the time we did together. Mons, WOW!

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