Thousands of advisers around the UK will have either bought leads before or at least considered it. By purchasing leads you are effectively buying the enquiries of consumers that want to speak to you right now.
It’s simple. You buy twenty remortgage leads, choose exactly the type of consumer that you want in your chosen location and then wait for the leads to come in. Then all you have to do is pick up the phone and start making appointments and closing deals.
Lead generation has been proven to work. There are companies that spend hundreds of thousands of pounds each year buying leads and fuel their entire business through lead purchasing. There are also small adviser firms that spend just a few hundred pounds per month and generate a healthy return on investment. Yet at the same time, you don’t have to look very hard to find discussion forums and websites where advisers only have bad things to say about lead generation and lead generation companies. So the question is – how can these totally different experiences both be true?
Look in more detail at what constitutes success and failure for a lead generation campaign. While Return On Investment (ROI) is the ultimate metric of any marketing spend, advisers tend to focus on conversion rates. After all, to generate a decent ROI you need to convert some leads into business. So we can assume that for those companies that keep spending thousands on lead generation their conversion rates are high enough to justify the continued outlay and for those that have a bad experience the conversion rates don’t stack up.
The question is then, what are the successful lead buyers doing that the others aren’t? The answer to this question is two-fold – expectations and processes.
In terms of expectations, it’s pretty simple. If you convert 10% of your leads but expected to convert 20% then you will be disappointed. If you expected to convert only 5% of your leads but actually convert 10% then you will be pleased. Any prospective lead buyer should do some calculations before spending any money at all to work out whether they can potentially make a decent ROI from lead purchasing. Buyers should create a spreadsheet with different scenarios – i.e. different lead prices, revenue estimates and so on. The crucial figure for success is that all important conversion rate. So if you base your entire rationale for lead purchasing on this conversion rate then you are bound to be disappointed if the expectation is not met.
The key for lead buyers is to be extremely conservative when planning a campaign. Assuming that a lead provider is telling the truth when they say “the average conversion rate for these leads is xx%” then the next challenge is how do you ensure you are at least as good as the market average?
It is vital to have the correct processes in place to maximise your chances of converting those leads into business. Even though a conversion rate of say 10% seems very achievable (after all that’s only 10 leads out of 100) it is useful to think of why those other 90 leads don’t convert to understand why the margin for error is so small.
The truth is that leads don’t convert for hundreds of different reasons.
One of the biggest factors prospective lead buyers never expect is the number of consumers who are not ready to make a purchasing decision. The consumer may have just filled out thirty fields online looking for mortgage advice but consumers often start searching online at a very early stage in the sales cycle. We have become a nation of online form-fillers and trying to save money by searching online has become a national obsession. So, the result is that you have to speak to a lot of consumers to find the ones that are ready to do business with you right now. All the other consumers should be put into your database to be re-contacted when they are ready to purchase.
The other thing buyers aren’t prepared for is the number of consumers that don’t answer their phone. If they filled in a form just a few seconds before, then why aren’t they answering their phone when you call them?
Again this is just the nature of lead generation. Often consumers fill in forms online in their lunch break at work. They leave their mobile phone number to call them back but they can’t answer their phone at work so when you call you just get their voicemail. Now that is not to say you can never contact them but it takes a proper process to do so. Many lead buyers contact more than 85% of their leads but this requires a structured calling plan to achieve these figures.
In the end, lead generation is still one of the most effective ways to source new business and reach an Internet savvy audience looking for financial services advice. But lead buyers need to be prepared to put in the disciplined work behind the scenes, manage their own expectations and never depend on unrealistically high conversion rates, especially if it’s their first time buying leads.
