Reaction
Joined: 30 May 2006
Posts: 2
Location: So Cal
|
| Posted: Tue May 30, 2006 11:37 pm Post subject: Truth about Internet Generated leads |
|
|
Hello all,
First day, first post... Was looking through a lot of the posts and came through a lot of information, but also found some that was a bit skewed (primarily from people promoting there services) so I was hoping to give some helpful information.
To give you a bit of a background information, I owned (and still own) one of the largest lead companies online. This is not an ad, because I no longer sell leads, and just want to give some background information. As well, I own a network of highly ranked sites that produce leads on a daily basis so I can tell you the differences of leads and what does and does not work.
The different kinds of "Internet" leads
There are three basic kinds of internet leads, while all three can share attributes, they are uniquely different. They are email (spam, double optin, etc...), Enticement/PPC, and traffic/request leads.
Email – Spam, Double optin, etc…
Everyone here seems like they have had a great deal of experience with email leads . They are typically sold 20-40 times, resold after two weeks, respammed 6 months later, etc... Typical closure rates are 0-3%. These are the leads where you ordered 50 of them and 30 wouldnt answer their phone, 15 say they never "filled out the form" AND "Your like the tenth guy to call us this week", and those last five you got ahold of that are truly interested? (and thats being generous) they all own single wides and want to pull cash out and have 458 FICO scores... While this may be a bit exaggerated, its pretty close to spot on from my long experiences in the lead industry.
Enticement/PPC
I noticed someone promoting this as a way to "avoid" paying for $50 internet leads. Honestly that is the worst advice I have ever heard. They pointed out they could pay $11.00 a click for "refinance" and that for the same money you were paying per day you could get 18 clicks to your site and said something about "imagine if 1-2 filled out your form!" that would be great and all, accept I have run EXTENSIVE tests especially on “broad range” keywords like “refinance” and have found a typical 50:1 ratio is average. The better the design and the more branded you are (people know you before they click) the better the conversion. However, fraudulent clicks run rampant, you constantly have to adjust the amount higher, spammers use PPC to find you, if your luck youll get a 24:1 ratio. At $4.71 per click (the current overture bid for “Refinance”) your looking at $113.04 per lead, and that’s a good conversion, at $11 a click multiply that by what 2.8? That is for producing your own leads. Now the companies that go this route use niche keywords, BUT they use the same text they would in a spam like “1% financing for ANYONE! For 30 years!” etc… They have to “entice” the borrower and once you do that for your own site or they do it to drive the lead that borrower is now expecting something. When you pull their credit, find out they want 125% financing, or that there DTI is currently over 50% and you cant deliver what they feel they were “promised” how are you going to close that deal? Typically your not. Spam and enticement go hand in hand, but PPC is a bit different. Also youll find a lot of mortgage leads are created by offering a free magazine subscription OR people will click “mortgages” as one of their “likes” and you will receive that as a “lead”. It’s amazing what gets passed off out there. That’s why now you have so many mortgage lead companies, everyone trying to sell. Typically higher closure ratios on the high end, low end still 0-10% or so…
When I started there were a few other mortgage lead companies online, primarily everyone was selling mortgage date for telemarketing. The “industry” has a VERY big black eye and is the “predatory lender” of the B2B world.
Traffic/Request leads
This is how I have always produced leads and when I say 30% closure ratios are not only possible, but average believe it. I have seen that number passed around here, but there is a BIG difference here. These are leads produced by having a very high ranking website, not promising anything, offering information and having people come to you to apply. When they search you out it is a BIG plus and really makes the difference in leads. You produce a LOT less leads that way, especially now when you are competing with all of the PPC, especially on Yahoo, but the conversion ratio is so much more dramatic that it really makes up for it. Not too many lead companies (if any retail) sell leads this way anymore. You have to have in house SEO, the network, and the knowledge to get it done. As well, its more cost effective to spam a million email address get a couple hundred leads that you can turn $500 each on than to provide a strong product that doesn’t deliver consistently. Also this way you do not have to deal with the DNC because they are requesting information, you did not market to them. They searched you out, filled out your form, etc…
As far as telemarketing leads, live transfer, etc… I don’t delve too much into those realms. I know websites, ranking, etc… So I can only give information on the internet leads. If you go out to buy leads ask the company the following questions:
How do you produce your leads?
If buying exclusive ask them “how long are they exclusive” see a lot of companies consider them no longer “exclusive” after 6 months (some after a few weeks) and they become “aged leads”. Millions of “aged leads” are sold every day.
I just wanted to put that out there to give a bit more information about the differences and how they are produced. There are also hundreds of other ways, and some would scare you if I told you about the future of lead generation. I would always say use purchased leads to supplement or to start, but do not rely on them full time unless you are self producing. Just my two cents… |
|
