Follow the leader
Mortgage Solutions25-03-2008
Q. Do you have plans to expand your offering to include other areas of financial advice, such as pensions and investments?
We currently trade mortgage leads, loan leads, private medical insurance leads and debt management and individual voluntary agreement leads. We are launching a protection product in March.
Our flexible technology platform allows us to launch products quickly – if we have enough demand for a particular type of lead and it can be sourced through the internet, then we will definitely consider it. Pensions and investment leads are something we will look into later in the year.
Q. Many leads from lead generation firms go nowhere. What do you do to ensure the quality of your leads? And what is your refund policy?
We have a sophisticated technological validation process that screens every lead coming into our system before it is sold to a broker. It checks the name detail of the lead against a database of false names. There is validation on phone numbers and email addresses, so everything is in place to ensure the majority of poor-quality leads are filtered out of the system.
However, some bad leads do get through, which is why we have a returns policy that enable brokers to be refunded for invalid leads.
The returns process is automated in the Leadpoint system, so a broker chooses a reason from a drop-down list in their account. Return reasons include things such as if the person said they never applied or if the name does not match the contact number.
Once the broker has submitted the return, our quality verification team checks the feedback, and if it turns out to be correct, the broker is automatically refunded for the lead.
Lead generation is a marketing activity and should be assessed in terms of return on investment. Sometimes brokers get too hung up on individual leads when what they should be looking at is their overall return on investment.
Q. I often get leads from sub-prime clients who want 100% loan-to-value (LTV), which is unrealistic in the current market. Is there any way of moving the LTVs requested by sub-prime customers down by default?
The Leadpoint system provides a number of filters that enable brokers to reach their desired customers. For mortgage leads, advisers can filter by 124 postal areas, loan amounts, credit grade and LTV, so if you want to buy sub-prime leads you can choose the maximum LTV you want.
Q. How do you see the lead generation market developing in 2008, given the current conditions?
These conditions are actually a good thing for the lead generation industry. When times are harder and marketing budgets are falling, lead generation comes into its own.
Brokers need to squeeze every last penny out of their marketing budgets, and lead generation offers the most efficient and risk-free method of sourcing new business. When you buy leads you are effectively outsourcing your marketing and somebody else is using their expertise to do the hard work to find clients for you.
It is also a natural way of cleansing the market. There have been recent calls for regulation in the industry due to a number of cowboys who promised the world and did not deliver.
When times are tough, only the leanest, best-performing companies will be able to compete. The companies whose leads do not perform will go out of business. By the time the market picks up, only the most reputable firms will be left.
Q. How many leads do you generate a month? Do you feel you have sufficiently penetrated the intermediary community?
We currently trade about 30,000 to 40,000 leads a month across our product range. We are signing up new brokers all the time and lead volumes are rising accordingly to meet the extra demand.
We have only scratched the surface of the intermediary community. We want to become the number one lead generator in the UK and to achieve this we need to continue to put our proposition in front of as many intermediaries as possible.
We exhibited at the Mortgage Expo last November and are embarking on a series of forums with the Mortgage Times and Vision Network to help educate brokers about lead generation.
Q. There have been calls for lead generation firms to be subject to FSA regulation. What is Leadpoint’s view? Do you plan to apply for FSA authorisation?
I think there needs to be a balance between regulation and education. Too much regulation will stifle the companies doing a good job and raise lead prices for the brokers. Regulation only applies to those working within it – the cowboys operate outside the rules so it will not deter them and brokers will be caught out.
Education and information is far more powerful as it enables brokers to make informed choices when selecting a lead provider. It is the responsibility of Leadpoint and other lead providers to be open, transparent and help improve standards of the industry as a whole. In January, we launched a blog to act as the most comprehensive information resource on lead generation in the UK.
While there is no requirement for lead generation companies to be regulated by the FSA, Leadpoint is actually in the process of getting full FSA authorisation.
We already hold a consumer credit license, and use a solicitor and a compliance firm to make sure everything we do conforms to FSA guidelines, but full authorisation will give brokers that extra bit of reassurance when they choose a lead provider.
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