Leads: for and against

Best Advice

Is lead generation for you?

While it might sound strange coming from a lead provider, buying leads is not for everyone and there are lots of advisers that should probably steer clear of lead generation altogether. Unlike many forms of marketing and even many business expenses there is a very clear correlation between what you spend on leads and what revenues you make and therefore whether that spend has been worthwhile.

In fact part of the reason that lead generation still has a patchy reputation in the adviser community is that in the past, many lead providers have been too quick to take adviser’s money knowing full well that they are unlikely to make lead generation work. The result has been that there have been lots of lead buyers that have lost money buying leads and have shared their experiences with others. So does this mean that lead generation doesn’t work? The answer is a definite “no” and there hundreds if not thousands of companies using leads as a significant part of their new business strategy from small firms spending a few hundred pounds a month to those spending tens of thousands of pounds each week.

If you are one of those adviser firms that have only just dabbled in lead generation or have never bought leads before but are thinking about taking the plunge over the next few months, how can you know if lead generation is for you? The good news is that you don’t need to spend thousands of pounds to find out as there are a few basic questions to ask yourself which can give you a good indication of whether lead generation might help your business.

Are you generating enough of your own leads already?

After many years of attending mortgage and finance shows, the most common question that I get asked by advisers is a plain and simple “Why should I buy leads?” To which I usually reply, “If you generate enough business already and it doesn’t cost you anything then you shouldn’t!”

There are plenty of very successful lead buying advisers but any lead provider worth their salt shouldn’t feel the need to make advisers feel that they are going wrong if they don’t buy leads. Very simply, for any adviser that wants to generate more business or look at alternative sources of business then they should at leads consider lead generation.

For the adviser who already has enough business then buying in leads is probably a waste of time and money. Lead generation can be expensive and remember that apart from the cost of the leads themselves, the biggest cost is really your time. Even if you find a provider who can generate leads for cheap if you have to make hundreds of phone calls to get through to each consumer then the real cost of buying leads compared to existing sources of new business can be substantial.

However, the flip side of this is that advisers don’t often factor in the real cost of other forms of marketing either. For example, if you use local newspaper advertising to generate leads, as well as the cost of placing the advert itself, you also need to pay to have the advert created. In addition, you have no way to determine who is going to respond to your advert or whether anybody will respond at all. One thing that lead generation does give you is a far more sophisticated way to target your customers as well as control the flow of enquiries.

Lead generation works best for those adviser firms looking to grow or test additional sources of new business. Many firms looking to increase their adviser numbers turn to lead generation to give their new recruits a ready-made pool of potential customers

Do you have the time and resources for processing leads?

The most successful lead buyers are those that have implemented rigorous processes for managing leads from initial receipt to conversion. The most important part of this process is the contact management piece which is a combination of being able to respond to incoming leads in minutes but also being able to make regular attempts at contact for all those leads that can’t be reached immediately.

While there are plenty of inexpensive software tools available that can help with all these things, ultimately they still require a human to do the dialling and be available to speak to each customer. For small adviser firms it can be tricky to integrate the requirements of managing a successful lead generation programme into the day-to-day running of the business.

However, before you buy leads you need to work out whether you can do both. For example, if you buy life insurance leads that can cost up to £40 per lead and you are on the phone to another client or out of the office when a lead arrives do you have any other means to follow up this lead within minutes? If not, then buying leads could turn out to be incredibly expensive. Small adviser firms that do very well from lead generation often utilise resources within their organisation to help out with the contact of the leads. There is no reason why somebody more junior within the firm could be tasked to make the dialling attempts and transfer the customers over to the adviser when contact is made.

Ultimately, the decision of whether to buy leads should be treated just like any other business decision. There will be advantages and disadvantages but the only way to determine what the right course of action is must be to have all the facts at hand to make an informed decision. Too many lead buyers jump in blind without considering all the requirements first and then are surprised why they can’t make it work. For any adviser considering lead generation, make sure you quiz each lead provider about the things you need to do to maximise the chance of success and often the one that gives you the most help is the one you should start off working with.

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