I have spoken to advisers that swear by it and spend every spare penny they have on buying new leads, but at the same time I have heard advisers describe lead generation as a “cancer”.
The strange thing is that many of these advisers will have bought exactly the same lead types, generated in exactly the same way, for exactly the same price. So how can these extremes both exist?
Just like anything in life people will have different experiences and different opinions but when it comes to lead generation it seems that the thousands of buyers that do very well from lead generation tend to keep quiet and those that have had bad experiences tend to be very vocal.
For the successful lead buyers, there seems to be a misconception that they should be secretive about their success or they will suffer.
I have often spoken to advisers that claim that, if they tell anyone how well they are doing, somehow everybody will start buying leads, lead prices will go up and lead quality will go down.
The truth is that this is nothing more than a conspiracy theory.
In fact, for most lead generation companies, the more demand they have the better, as a stable buyer base will allow lead suppliers to buy media on more premium websites, generating a larger volume of higher quality leads.
Any buyer that has had a bad experience should remember that a lead provider will not be commercially viable unless their customers are successful (i.e. leads have to work).
Lead generation companies only make money when their lead buyers make money, so the success of the lead provider is a good indication of whether the leads are any good.
There is no hiding when it comes to leads. If you buy 20 mortgage leads and none convert, then you aren’t going to come back and spend more money and, eventually, the lead provider will run out of new advisers to sell leads to. Lead providers only make money from repeat business and buyers only come back for more if the leads work.
At the same time, it is important to remember that lead generation is a marketing exercise and ultimately success is to be judged on Return on Investment (ROI) and not the number of conversations or even conversion percentages.
So, if you take that same 20 mortgage leads and only speak to one consumer that turns into a piece of business worth a few thousand pounds and you have only spent a few hundred, then this should be considered a successful campaign.
I think in 2011 advisers need to stop questioning whether lead generation as a method of sourcing new business works and start thinking about how they can make lead generation work for their business.
This shift in mindset will help a lot of brokers increase their flow of new business and hopefully help the lead generation industry to shed its unofficial tag as the Marmite of marketing.
Justin Rees is director of marketing and partnerships at LeadPoint