Brokers still wary of using lead generation companies

The Association of Mortgage Intermediaries\' November census has revealed that only 36% of intermediaries who responded have used lead generation firms within the last 12 months.

And 77% of those that have say they received only a minimal conversion rate of less than a quarter.

Chris Cummings, director- general of AMI, says: “The results show mortgage intermediaries place high value on existing clients and are committed to building and maintaining long-term relationships with customers.

“The benefit of this to customers is clear – they will continue to receive ongoing professional advice that meets their needs and circumstances.”

Intermediaries are choosing to maintain their relationships with existing customers. 79% of respondents confirmed they have made arrangements to allow ongoing contact with their customers. And 39% of respondents maintain regular contact with their existing client bank via alternative means such as newsletters and brochures.

However, Vanessa Blount, head of paaleads.com, counters that lead generation firms were never introduced as a replacement for existing client relationships.

She says: “They were introduced as an extension of the current format to broaden their client base.”

The results also show that the majority of firms are not convinced by lead generation firms. 69% said they do not see purchased leads as important to their business.

AMI’s census is backed up by research from Alliance & Leicester, which found similar concerns about lead generation firms. The research shows 70% of brokers do not feel lead generation websites add value to their business, 18% feel they do and 12% remain undecided.

Mehrdad Yousefi, head of intermediary mortgages at A&L, says: “Our view is that the majority of lead generation websites probably don’t add value to a broker’s business. But there is a small minority that generate sufficient traffic for brokers that turns into business.

“I would have thought the figure would be lower, more like 55%.”

But Blount adds: “A&L research states 70% of brokers found that lead generation sites do not provide value, but this statement cannot be quantified when it is not known how many of these intermediaries have used this method of generating leads.

“Online lead generation is still a relatively new phenomenon. Some brokers adapt immediately to it and others tread with caution.”