At a recent roadshow an adviser sidled up to the Leadbay stand. After checking that nobody was looking he whispered “Give me your business card and I’ll phone you later”, and hurried off.
This got me thinking – for many companies, buying leads is tantamount to a guilty secret.
It seems to be something they would rather hide from other companies even when it is their primary source of acquiring new business.
The adviser in question spends more than £900 a month on leads but is adamant that nobody should knew he buys them.
This attitude is widespread and there are two key reasons for it.
The first is that there is a finite number of leads and advisers are competitive by nature, and the second is the way leads are purchased.
Advisers do not want their competitors to know they are buying leads in case they bid against them and thus push up the price of the leads.
As most lead generators operate a bidding model whereby brokers set their own prices for the leads they require in the areas they want, if someone else is competing for the same ones it pushes prices up.
By hiding the fact that they buy leads – or talking down the concept of lead generation – many advisers manage to keep their competitors out of the picture and buy leads at lower prices.
The companies that buy the most leads often talk down the idea of lead generation most strongly
Another reason for advisers pretending not to buy leads is that they can choose precise categories of leads.
For example, they might be looking for remortgage leads between £100,000 and £300,000 in the TS postcode. Advisers buying specific leads such as this might want to keep the supply of new clients to themselves as many feel that a competitor buying in the same area could take away their business.
Ironically, because of this it is often the companies that buy the most leads that talk down the idea of lead generation most vehemently.
One adviser told me recently that they regard buying leads as similar to going to an auction and shouting about the gem you’ve spotted in the corner – you just don’t do it.
But there is a good reason why this is a counterproductive attitude – the greater the number of advisers who buy leads in a certain area, the more the supply of leads of this type is guaranteed.
It’s obvious that affiliates – the companies that supply leads to lead generators – will supply the business they earn most from.
So more demand and a higher price in a certain area for a certain type of lead means the affiliate concerned has an interest in supplying more leads of that kind.
And the quality of leads will also improve as the affiliate has a vested interest in supplying the highest quality leads they can muster to ensure all their leads are purchased.
This is especially true with a business model whereby advisers are refunded for invalid leads, which means affiliates don’t get paid for leads that do not present worthwhile business opportunities for advisers.
So when you buy leads and it works for you don’t be afraid to admit it – it could bring you better results than those you are already getting.