The cost of leads is beyond our control
Mortgage Strategy03-08-2010
Advisers often wonder why they are paying what they are for mortgage leads.
While they should consider factors such as conversion rates and cost per acquisition, it’s useful to understand the reasons why leads cost what they do.
Providers work in different ways but the factors that determine lead prices are often beyond their control.
Take mortgage leads generated via Google. If a consumer types in something like ’mortgage advice’ they will see a series of advertisements asking them to fill in their details to be contacted.
Lead providers have to pay every time a consumer clicks on the advert and each click can cost as much as £10.
There is a cost associated with generating such leads that goes beyond the cost of the click. If only one in two consumers fill in the form after clicking on the advert the generation cost is £20 per lead.
Leads also have to pass through technology to invalidate those with expletives or incorrect details. Some will end up being returned by buyers. For example, it could be that the person contacted is not the name on the lead.
Although conversion rates for leads have fallen in recent years the cost of generating them via Google, considered best in terms of contact and conversion rates, hasn’t changed by the same proportion.
Lead generation offers advisers the chance to harness the power of online marketing without the need for online expertise. But those who understand the process often get the best from leads.
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