Justin Rees, Head of Marketing, explains how lead generation can help you source new business whatever the economic climate
Mortgage Solutions15-09-2008
New business can be hard to come by, especially for smaller firms with a limited marketing budget. This is where lead generation comes into its own, writes Justin Rees
Where will your next piece of business come from? When I first joined the world of lead generation, I remember people talking about lead generation as a form of marketing. This did not make any sense to me. How does buying leads have anything to do with marketing?
If you think about what marketing is, things begin to slot into place. Marketing is simply the process by which you promote a product or service.
As an intermediary, by undertaking any form of marketing activity, you are promoting your ability to provide a service to consumers looking for financial advice.
When you undertake any marketing activity such as paying for an advert in a newspaper, you are spending a certain amount of money in order to generate a response. If you spend a few hundred pounds on an advert in a local newspaper then you are hoping the revenue you generate from the consumers that respond to your advert will be at least greater than this initial spend.
Investment
With a marketing activity, you take a risk. You pay the publisher money to appear in its publication, because it has a certain number of readers who will see your advert.
You take a gamble that people will see your advert and respond to it by calling you to find out more about what you have to offer. But remember, you are not paying money for the satisfaction of seeing your company name in print – you want responses – and furthermore you want responses that convert into business.
Consumers enquiring about your service do not justify the marketing investment you have made. If none of those consumers can be helped as they are not looking for exactly what your company has to offer, then you will not generate any revenue and you will have wasted your marketing budget.
Newspaper advertising does have a place, but when deciding where to spend your marketing budget, it is important to weigh up the pros and cons of this medium. With print advertising, as well as paying for your allotted space, you will need to employ a designer to create something for you to use as an advert. This can often cost more than the advertising space itself.
Also, the more advertising space you want, the more you have to pay, and saving on advertising space is a false economy, as the less information you provide, the less qualified your consumer responses will be.
All these disadvantages of print adverting are well known, but despite the large degree of risk associated with this form of marketing, intermediaries across the country are prepared to spend hundreds of pounds taking out adverts in newspapers.
So what does this have to do with lead generation?
For all those intermediaries who spend their money on newspaper advertising, would it not make sense to spend the same amount of money without any of the risks? That is what lead generation has to offer.
Lead generation is a form of marketing, because like print advertising, you spend money in order to generate new business. It is one step further along the marketing chain. Instead of speculating large sums on trying to generate a response, lead generation enables you to effectively buy the responses of somebody else’s marketing spend. In the context of print advertising, it would be like the newspaper charging you only for those responses to your advert that were relevant to your company.
This is only one of the advantages of lead generation. When you allocate some budget for a lead generation campaign, you do not just get responses, you get qualified responses. You can filter exactly the type of consumer that is right for your business. If you specialise in remortgages in the North East with certain loan amounts, credit grades and maximum loan-to-values, then lead generation enables you to source these consumers. In addition, you can get a refund for any consumers that do not meet these predefined criteria.
Another important point is the consumer journey. To become a lead, the consumer will have had to fill in a form with as many as 20 fields. For traditional forms of marketing, the consumer might just have to pick up the phone to respond. With lead generation, the consumer intent must be a lot greater, as they have to spend time filling in forms and submitting their details.
Rapid response
The other key advantage of lead generation is that the leads are delivered in real-time.
This means you will receive the consumer’s information within seconds of them submitting their details online. There is no other form of marketing that can guarantee such immediate results.
Where lead buyers really see the value of lead generation is the ease with which you can see the results of your marketing spend, which is measured in terms of return on investment. As a lead buyer, the process is simple: allocate a budget; receive a specified volume of pre-defined lead types; work the leads; convert a percentage into business; and calculate the revenue generated.
Depending on your business model, looking at the difference between the revenue generated and budget spent will determine how successful a lead generation campaign has been.
There is a valuable place for traditional marketing activities, whether brand or response-orientated. But whether you are a small, medium or large business, lead generation is the ultimate in direct response marketing and will play a vital role in generating money for intermediaries in the future.
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