New lead sources, where coming from and how converted?
It is rare to open up a trade magazine these days without being confronted by a plethora of lead providers purporting to have the ultimate solution to a brokers needs. With each one of these new business sources promising an unbeatable service that provides unrivalled access to targeted leads, where should you go and who should you trust? It may seem obvious to say that you should stick with a long-established, reliable lead generation firm, but let’s take a close look at how the new sources appearing can either enhance or impede your business acquisition plans.
Hanging on the telephone
Firstly let’s look at the UK telephony system. While this has been a source of new business since time immemorial, innovative use of its power by lead generation firms and telemarketers has seen two new strains of lead emerge: telephone qualified and appointment leads. Each of these lead types are generated in the same way, with the exception that appointed leads are taken one step further to produce an ‘in front of the client’ opportunity. But where do these leads actually come from?
There are niche lead providers out there who utilise the power of the telephone by conducting survey based telemarketing campaigns, producing leads based on the responses provided by the canvassed party. It has to be asked of firms sourcing leads in this manner; where do the client details come from? Have they been cold-called to conduct such a survey, or has the ‘lead’ previously completed a lifestyle questionnaire at the airport, or while strolling through town on Saturday afternoon? If the latter is the case, then take note that being a ‘re-warmed’ lead is a vastly different proposition to a ‘hot’ one. For this reason, it is vital you check the small-print before you commit.
So what can you expect to pay for telephone-generated leads, and what sort of return can you get on your investment? Unfortunately, I could not find any data relating to conversion rates but can tell you that each lead will retail at around £95 (usually based on a minimum order); a price that is clearly affected by the high staffing costs of the companies producing such leads.
An alternative way of generating telephone leads is based on the fact that clients will, and indeed do, take steps to orchestrate the help that they need. Largely, this means that the enquirer calls a telephone number advertised either in the national press or on comparison websites, which are then routed directly through to the lead supplier where they are then qualified for sale. Clearly this is a much more streamlined process which is reflected in the price of the leads themselves. A massive benefit of using a generator like this for these leads is that each lead is ‘live’ and transferred to the purchasing intermediary by telephone immediately following qualification. Each lead retails from £65, and with our independent research showing that around 50 per cent of all transferred clients writing business are producing profits of around 200 per cent of the original cost, it is an extremely profitable way of marketing.
Looking online
So what of the internet? There are a multitude of lead providers that have harnessed the ability of the World Wide Web to capture data, matching the needs of each applicant that requests advice to any one of their member intermediaries. The majority of players in this relatively young industry (the first internet leads suppliers appeared in the early ‘noughties’) have latched onto mortgage leads as the key product to offer – but what if you don’t deal in mortgages?
The good news is that there are companies that have consistently looked for ways to develop their propositions to benefit intermediaries, dealing in all markets across the country. The most recent innovation has opened up the door for a vast array of lead types to be targeted (for example pensions or PMI), thus ensuring there is now no need for anyone to purchase leads that do not meet the requirements or market specialisation of their business, something we have consistently campaigned against.
With lead prices at the hands of the intermediary themselves and with access to a much higher volume of leads from alternative sources, there are benefits to intermediaries in using ‘multi-lead’ distribution systems. But are there risks? It seems no lead provider operates a transparent system, despite many lead providers suggesting they do, so what level of transparency should you be looking for?
The first area that you should query is with regards to the lead source. Is this displayed and how? Could there be any confusion over where leads will come from? To avoid getting stung, stick with a lead supplier that clearly labels where leads come from and provides as much information about the lead source as possible. Alternatively, to be absolutely certain that you will be dealing with a reputable lead source, take a direct look at the website producing your leads. Doing so will ensure that you are not putting yourself, your firm, or your marketing budget at risk.
The next element that you should look at is the lead price. Regardless of whether your lead provider operates a ‘fixed’ price or ‘bidding’ set-up, you should check if the leads provided are actually worth the money that you will be paying. Where your chosen lead provider allows you to set your own lead prices you should also confirm that you will be paying enough to secure the volume of leads that you want – it is not always necessary to be the highest bidder. Speak to someone already taking the leads and assess both the lead provider and the reference given.
Further areas that you should take a closer look at when seeking out new lead sources are the policies and procedures operated by the company. With an ever-increasing volume of newcomers to the lead provision industry, it is perhaps more important now than it ever has been. An essential area that you should query is the payment schedule operated by the lead provider – do they require you to pay upfront or in arrears? There are very few lead suppliers who now require advance payment, as this is the one area where the lead industry has, quite rightly, been publicly criticised. I would urge anyone to avoid those that operate upfront payment. However, if you are considering a company that works on this basis then please do confirm what guarantees they have in place to minimise the risk to your investment.
Stick to what you know
Of course, the best way for any mortgage intermediary to totally streamline their marketing strategy and simultaneously stick to what they know, is to maximise the potential of their existing client base.
The good news is that there is a variety of client management systems now available either from the shelves of your local PC World or on a bespoke basis from software houses. For example CasePro, which means you no longer have to rely on your Rolodex, your diary or any information from a client’s paper file to be able to initiate repeat contact with them. Instead, you can set reminders to contact clients about their needs at a strategic time likely to give you the best opportunity of receiving additional business and in a way that meets clients’ individual needs. This not only makes the planning and implementing of such activity much more manageable, but conducting business in a client-specific way like this will encourage them to return to you for both new and additional products that may be required. Ultimately this form of marketing can be extremely profitable and also the most cost-effective way of maximising business levels.
To conclude on this subject, there are a whole host of lead generation sources out there for mortgage intermediaries to exploit, but not all are necessarily going to be good for your business. I urge every mortgage intermediary and adviser reading this article (and indeed those that are not) to pursue their areas of expertise, and to seek out new sources of business that will allow this to be a reality.
