Nat Daniels is managing director of Mortgage Angels
Brokers must look at all possible methods of attracting new business if they are to retain and grow their margins. This goes for any business whatever its size. However, larger brokerages may take a different approach to growing their businesses than smaller operations. The big boys have the advantage of scale where the strength of their brand and the back up of a marketing department allows them to generate business from a variety of areas. This strength in depth, and pocket, is obviously out of reach for firms or brokers that only employ a couple of advisers and do not have access to limitless advertising budgets.
Proving its worth
For the smaller player, word of mouth referrals are important, but often this is not enough to sustain never mind grow a business and so they seek help elsewhere. This is when the lead generation sector proves its worth – especially now the change in the rules regarding cold-calling has cut off one potential avenue to new customers.
But where one door closes, another opens. With close to two-thirds of adults now having access to a computer at home, potential mortgage applicants are more likely to use the internet to research their options. Therefore purchasing online leads is an effective way of capitalising on the relatively new market created by an increasingly technology-savvy public. Essentially, internet leads create a conversation opportunity with a potential customer. Financial Services Authority (FSA) regulation permits an introduction to be made by an unauthorised company but full qualification of that lead is not permitted, as this would be a regulated activity and most of these firms act as introducers only. Many more mortgage intermediaries are now realising the power of a mortgage lead generator to boost their bottom line. This is all possible without rejection-filled cold-calling, or buying expensive advertisements, or thousands of pounds drilled into media advertising and no direct mail campaign costing you a fortune.
At the same time there has been a revolution in lead sales generation. This revolution has been driven by the web and means hot leads can now be delivered to intermediaries in real-time. It is vitally important for a lead generator to have a system in place that provides an immediate response, and the adviser receiving the lead must make contact as soon as possible to maximise conversion potential. A lead is just that – an introduction to an applicant who may want a mortgage or related product. Brokers still have a fair amount of work to do if they are to successfully convert the lead – the case is not handed to them on a plate.
It’s vital to contact the leads as soon as they are received to maximise the chances of conversion. Leave a lead for longer than a few hours and it goes cold and you risk losing the business. Even if you can’t get hold of the potential client at first, second or even third attempt, persevere. You are being presented with people that have already indicated that they want to be contacted and are receptive about the products you are attempting to sell them. They have specifically requested information on your range of products. Some brokers sit on leads until they have gone cold before making the initial follow-up call, vastly reducing the chances of closing down the lead and generating some cash for themselves.
Working smarter
The larger lead generation companies are becoming more sophisticated in their approach. By working smarter they are improving the overall quality of the leads they generate and the overall service they provide. It’s about continual improvement as in any other sector, and the fact that in business, if you stand still, you invariably find yourself going backwards.
However, brokers must judge lead generation firms realistically. For example, if a broker takes an advertisement on a consumer website they know that they are likely to get a mixed bag of leads – some very good ones, some average ones and, of course, some poor ones that never convert into profitable business. But as long as the broker gets a good overall return on investment he will be happy with the marketing exercise. Therefore, brokers that buy leads from professional lead generation firms shouldn’t expect every lead to be a winner but rather a reasonable percentage in order to make the initiative profitable.
It is therefore a challenge for the lead generation industry as a whole to manage perceptions in this respect so that we are all judged on a level playing field with regard to other new business channels. At the end of the day we are all willing to be accountable and welcome the opportunity to demonstrate the financial benefits of what we do. Many of the established lead generation experts are performing well, even though I do expect some sector consolidation.
Making thorough checks
Care should be taken when sourcing lead generators. For brokers to be confident about the lead generation companies they employ, they should check thoroughly every aspect of the arrangement including references, guarantees, penalties, break clauses, charges, payment terms and more. In particular, from the point of view of compliance with FSA rules, they must be aware of lead generation suppliers that are based offshore who might try to avoid the cold-calling ban. Mind you, it often seems like it is only the bad experiences that get reported. People don’t go running to the press with good news stories when a service works as it is supposed to.
There are, of course, alternatives to using a lead generator. Some brokers prefer to set up an in-house lead generation process through their own websites. Others are increasingly turning to public relations to raise their profile, enhance their reputation and ultimately to generate consumer leads. Strict FSA regulation of cold-calling and advertising has led to increased interest in and use of PR, which is not regulated in the same way and allows much more flexibility. If you decide to try and generate business through your own website, it is important to make sure it looks professional and is effective in its functionality. Ensure the designers of the website are experts in search engine optimisation, or you could end up with a great looking website but no leads. It stands to reason that if you want to attract new customers, you should have the best shop window in the virtual street. Your online presence says a lot about the way you do business. Having a shoddy web-presence reflects badly on the firm and will put potential customers off using your services. Having said that, simply having a website does not mean you will automatically generate traffic. Prospective customers have to see your website and with hundreds of thousands of websites out there all vying for attention this isn’t an easy thing to accomplish. With all websites, content is king.
Having a presence
Another popular way of finding information on the web is through the use of directories and it is important that intermediaries with a web presence are listed on such sites. Most lead generation firms have a directory of advisers. In short each adviser gets a page on the site – a directory listing. The more innovative and advanced firms are now looking at developing a blog capability that will compliment the adviser’s listing. But advisers still need to be on the phone following up on a lead the second they get it.
Lead generation firms are constantly looking at innovative ways to provide their services to brokers in a way that provides fresh, qualified leads. What is certain is that online lead generation firms seem set to play a bigger role within mortgage marketing process as competition for business increases between mortgage intermediaries.
The quality of leads supplied to the broker is also set to improve through a combination of new technology and fewer, but more effective and efficient lead generation firms. Tight margins will see the lead generation market contract, forcing out those firms that are not providing a good service to the broker. This will leave the innovative and customer-focused lead generation firms in pole position to serve the intermediary by delivering hot leads in real-time that will help sustain and grow their business.
