The cost of leads is beyond our control
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JUSTIN REES: HEAD OF MARKETING LEADPOINT UK
Advisers often wonder why they are paying what they are for mortgage leads.
While they should consider factors such as conversion rates and cost per acquisition, it’s useful to understand the reasons why leads cost what they do.
Providers work in different ways but the factors that determine lead prices are often beyond their control.
Take mortgage leads generated via Google. If a consumer types in something like ’mortgage advice’ they will see a series of advertisements asking them to fill in their details to be contacted.
Lead providers have to pay every time a consumer clicks on the advert and each click can cost as much as £10.
There is a cost associated with generating such leads that goes beyond the cost of the click. If only one in two consumers fill in the form after clicking on the advert the generation cost is £20 per lead.
Leads also have to pass through technology to invalidate those with expletives or incorrect details. Some will end up being returned by buyers. For example, it could be that the person contacted is not the name on the lead.
Although conversion rates for leads have fallen in recent years the cost of generating them via Google, considered best in terms of contact and conversion rates, hasn’t changed by the same proportion.
Lead generation offers advisers the chance to harness the power of online marketing without the need for online expertise. But those who understand the process often get the best from leads.
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Readers' comments (1)
Anonymous | 8 Mar 2010 8:26 pm
Do lead providers thing that brokers - who are the CUSTOMER of the lead provider - are stupid ?
Brokers who use Lead generation companies fully understand how it works - its hardly rocket science.
What constantly amazes me is that Lead providers just can't seem to grasp what it is that Brokers want from Lead generation.
All we want is when we receive the lead to speak to the person who submitted it, and to find that the info they submitted is the truth ( Deposit/Income etc ), that the case is placeable, and that they are seeking advice - thats it.
What we don't want ( but 9 out of 10 times what we get ) is "leads" that are uncontactable, or "leads" where the person who submitted the info didn't want to be contacted, or where the person who submitted the info just made up the enquiry. This isn't a myth made up by brokers - this is the reality of online lead generation.
Lead Generators seem intent on getting brokers to part with vast sums of cash in order to bulk purchase volume leads - in the Lead Generators full knowledge that a high proportion of these "leads" will be poor quality/timewasters/unplaceable dreamers - with maybe the odd genuine enquiry thrown in.
What Lead generators either know and are in denial of, or simply refuse to admit is that in the main the "Product" they are selling to their "customer" is largely of such a poor quality that it is unfit for purpose - yet the vast majority of the time we as the customer cannot get our money back because the "refund policy" is largely nonexistent.
Maybe Lead Generators should try filtering out some of the junk in order to find the quality enquiries and then sell these for a higher price. Brokers will pay far more for a genuinely placeable lead who is looking to do the business quickly.
There are already companies out there doing this - some are very good - some are poor ( supposedly "qualified" leads turning out to be not as described once the broker calls them and does a little more digging )
A plea to all lead generators - Listen to broker feedback, understand why brokers are fed up with poor quality so-called "leads" - and work with us to improve your systems and do something to improve the quality of what you're selling - the end result will be that we'll all make more money.
That is unless you're happy to keep bulk-selling crap and having an unhappy customer base......
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