Make the most of your investment in mortgage leads

26 October 2009

Justin Rees
head of marketing leadpoint

 

According to the Internet Advertising Bureau’s recent white papers on online lead generation, lead quality is determined by expectations.

What this means is that every lead buyer will have a different interpretation of what constitutes a successful lead-buying campaign.

The key for prospective buyers is to make sure there is an agreed benchmark for success before leads are purchased and they should work closely with providers to determine what this should realistically be.

The most successful lead-buying companies have clearly defined objectives and realistic expectations of what lead generation can achieve.
To put this into context, a mortgage lead buyer who expects to convert 30% of the leads they buy and generate £20 for every £1 they spend from mortgage business alone will undoubtedly be disappointed with the process of lead generation. This will hold true whichever supplier is used.

The most sucessful lead-buying companies have clearly defined and realistic objectives

But an adviser buying exactly the same mortgage leads from the same supplier expecting a 10% conversion rate with a plan in place for cross-selling other products such as protection is destined to have more success.

It’s important to note here that leads which don’t convert are not necessarily of low quality. To understand this it is useful to look more deeply at the two elements of lead generation that are said to broadly determine the quality of leads.

The first is contactability - i.e. can you get hold of the consumer involved? Assuming a lead buyer takes account of best practice recommendations for following up leads much of this element can be controlled using phone number and postcode validation.

Of course, there will always be some invalid leads with wrong phone numbers that slip through but these should never add up to more than about 15% of the total.

But there’s no point in contacting leads if you can’t convert them into business, so convertibility is probably even more important than contactability.

Convertibility can be defined as the propensity for a lead to convert into a sale.

This will be determined by a number of factors such as how the consumer is initially marketed to and the language used on the page on which the consumer submits their information.

How a lead provider allows you to filter the leads you buy will also have an effect. For example, a life insurance lead may be 100% genuine and the consumer may be ready to sign on the dotted line but if they are 90 years old, is it a valid lead?

But ultimately both contactability and convertibility are to some extent irrelevant as, just like any other marketing spend, the true measure of success is return on investment.

If you buy 100 leads and only 50% are genuinely interested but you convert 10 of these into business generating a 300% return, this is a better outcome than a 90% interest level but only three conversions generating a 200% return.

It is important for buyers to understand the variables that affect the success of lead generation campaigns and how they can control these to achieve the best return on their investment.