Dispelling the myths of lead generation

Mortgage Introducer

Brokers have found great success with word of mouth referrals and the use of the internet to gain new mortgage business however what about those potential borrowers who are interested in gaining a mortgage but have too many degrees of separation to a broker?

These consumers appear to be stuck on an island when it comes to seeking independent mortgage advice however lead generation companies are now positioning themselves so they can catapult these wanderers right onto a mortgage broker’s desk.

To find out how they are doing this and more importantly, how brokers can make the most out of lead generation, I sat down with Justin Rees, director of marketing at LeadPoint.

What is lead generation to a mortgage broker?

A lead is defined by the Internet Advertising Bureau as a piece of data about a consumer that has given their express consent to be contacted about a particular product or service.

In the mortgage industry that means consumers that have gone online searching for mortgage advice, seen a relevant advert about getting mortgage advice, clicked through onto a website where they have submitted up to 20 fields of information about their circumstances and requirements and given their consent to be contacted. What this means is that you get an engaged, highly targeted consumer with a strong intent to purchase.

What are the common misconceptions of lead generation?

The biggest misconception about lead generation in the adviser community is that leads convert themselves. While there are many brokers that make significant returns from buying leads, the thing that more often than not sets them apart from those that don’t make it work is the processes they have in place to take the leads from initial delivery to sale. This includes everything from having a process in place to follow up every lead immediately and to keep trying for a number of days to having some prepared objection handling techniques when speaking with consumers.

The other misconception is that when assessing the success of lead generation that individual leads matter. Just like any form of marketing return on investment is the fundamental measure of success. Even if you only contact 10 leads and convert three into business these figures are irrelevant to some extent. A campaign with a higher ROI is always better than one with a higher conversion rate (for the same number of leads).

Is it not cold-calling? How does lead generation work?

The crucial thing about lead generation compared to other forms of marketing is the real-time nature of the enquiries. Consumer leads are delivered to the lead buyer within seconds of the consumer submitting their information online. This makes it much easier to make contact with the consumer.

Studies from the US have shown that contact and conversion rates drop off dramatically after every minute of non-contact and if you attempt contact within 60 seconds you are four times more likely to convert the lead into business.

The other important aspect of lead generation, especially in financial services, is that consumers have given their express consent to be contacted. As well as this being a regulatory requirement it also means that the consumers should be expecting your call which improves the performance of the leads.

In the mortgage market, the ability for lead buyers to target the right customers is absolutely crucial and there are not many other forms of marketing that allow you to be so specific. Most mortgage lead providers allow lead buyers to filter by postal areas, loan values, credit grade and maximum loan to values and while lending criteria remains so strict these are invaluable tools for mortgage brokers.

What type of mortgage broker is lead generation suitable for?

All types of mortgage brokers. The key is for lead buyers to work out how lead generation can fit into their business. Large brokerages with telephone based operations typically buy less filtered leads but they need consistency of volume. Smaller brokerages tend to pay a bit more for more highly filtered leads as they will take smaller volumes so need higher quality leads. That means taking leads in local areas which gives them the option to go to see consumers face-to-face if necessary but also buying leads with lower LTVs which allows for a greater margin for error.

What tips do you have for a mortgage brokers interested in using lead generation?

There are a few tips that I would give to any would-be lead buyer. One would be to work out what you need to achieve from buying leads to make it a profitable activity and work backwards to see if it is viable. For example, if your calculations show you need to convert 50% of leads at a quoted lead price then lead generation might not work.

Probably the most important tip is to make sure you have a cast-iron process in place for handling the leads before you spend any money. That means having the resources in place to be able to follow up each lead within minutes and then potentially follow up each lead up to four times per day for four days.

How have mortgage brokers responded to lead generation?

The mortgage industry as a whole has had a mixed reaction to lead generation over the last five years. There are many firms that spend thousands of pounds each month on buying leads and for some of these firms lead generation is their sole source of new business.

There are also hundreds of brokers that use lead generation successfully but on a much smaller scale. Some brokers dip in and out when business is slow, others just buy leads in certain products and some just use lead generation sporadically or when they have spare bandwidth.

There is also a very vocal minority that has not had a great experience with lead generation. Usually they have either purchased leads from an unscrupulous provider or they have been given the wrong expectations of what they can achieve from buying leads. At the same time there are some that have just had bad luck but it has been enough to put them off buying leads.

The key thing to remember is that lead generation works. This is an undisputable fact. The tricky thing is to find the right company to work with and the right methodology for processing leads. And even if you do find both it can take some time before you can get the ROI you need. Practice makes perfect – even in lead generation.

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