Lead Buying Guide
When markets get tough sales people and teams go on the hunt for leads. And there are no shortages of lead providers that are willing to fill your orders for mortgage leads, insurance leads, debt leads, education leads or any other sort of leads. The trick is finding good lead providers to partner with your company to sell you good quality lead data.
Unfortunately, looking for good sales leads can be a more treacherous quest than it might seem.
It’s so much the unscrupulous lead providers in the market (not to discount that risk), but it is far more likely that you will simply pick the wrong lead provider or buy the wrong leads. You see, each business is different and often require unique consideration when choosing a source of leads.
At the highest level that choice can be between marketing methods (i.e., billboards, direct mail, TV, radio); however, to keep things simple let’s confine ourselves to Internet lead buying.
This Internet lead buying guide will give you the basics of how to find, qualify, and buy the right Internet leads from a good lead provider.
Sales Objectives
Most people start with lead price. That is a recipe for disaster–as they say, “you (often) get what you pay for.”
I prefer instead to start with you and your business. What are you trying to accomplish?
- Your sales team is having trouble generating leads and referrals
- You need to keep your call center or dialer stocked with fresh leads
- You want to get in front of the growing volume of Internet customers
- You need to find cheap leads to train new sales people
- You aren’t quite sure, but you need more sales!
Each of these scenarios are very different lead buying situations.
For example, if I have mortgage brokers that are good at closing deals, but my sales are down or they’re having trouble generating their own leads then I’m probably looking for high quality mortgage leads and should pay the premium. However, if I am just looking to stock the power dialer or train a new sales floor then cheap aged leads may be the solution.
Customer Profile
Now that I know what my sales team needs in a lead buy, it’s time to think about where my customers might be. Think closely about the types of customers you are good at closing.
- How do you generally meet them?
- What is it about your business that they generally like?
- What made them close a deal with you?
- Are you better at closing a certain type of loan or insurance policy?
- Do you prefer face-to-face or are you comfortable on the telephone?
Here are some guidelines in looking for a good lead provider as you consider your customer profiles:
If you enjoy personal, one-on-one, belly-to-belly selling then you might want to consider a lead provider that can sell you leads that are very well filtered and highly targeted. On the other hand if you like don’t mind casting a wide net and working the phones and email hard then you can find cheap, but less filtered leads.
Internet Lead Generation
One of the first questions on your list when you start talking to Internet lead companies should be:
“How do you generate your Internet leads?”
It’s a fair question and it can tell you a lot about what you can expect from any leads that you might buy from them. I won’t do a full discussion of each of these marketing methods, but I will give you a brief introduction so that you feel educated and comfortable in the conversation with prospective lead providers.
Pay-Per-Click (PPC) - This type of marketing is probably most familiar to you as Google AdWords. There are actually many different types of pay-per-click (PPC) networks, but Google’s is the most prevalent and possibly familiar to you. Most of the leads that result from this form of marketing are the result of consumers searching for products or services. Often, but not always, this may mean that the person has an intent to buy. However, they may simply be early in the researching portion of their decision. Therefore, you may not get the mythical one call close.
Search Engine Marketing (SEM/SEO) – Similar to PPC these leads are typically generated through consumers’ search. In some cases these may be better leads because they are “natural” occurrences in the search results and are not as obviously advertising to the consumer–lowering sales objectives. However, unlike PPC, which is very obviously advertising a search engine marketing (SEM) lead may be further from the intent to buy.
Affiliate Marketing - This marketing method can be a mixed bag. Affiliates are professional marketers that work on behalf of lead providers in promoting their marketing messages and content. Therefore, you can get very good leads if the affiliate has diligently built up a very responsive audience for their marketing or very bad leads if they resort to the quick buck spam approaches. If a lead provider uses affiliates you should ask very specific questions about how they quality control their affiliate network.
Display Networks - These are probably some of the most expensive advertising a lead provider can buy. These display ads (i.e., banners, widgets, and other ad types) are often seen on big publisher websites like NYTimes.com, Yahoo Home Page, or other high traffic Web property. These marketing campaigns can bring in a ton of traffic and well targeted demographics, but often need very sophisticated lead scrubbing to avoid high percentages of bogus leads.
Email Marketing - You don’t find too many reputable email marketers in the lead provider space. However, marketing studies show that email can be the highest performing marketing method. So, if you find a good provider and they handle their email list well then you could have a gem.
Lead Quality, Volume, and Price
The final major consideration of your lead buying decision is to determine if you and your marketing partner create a mutually beneficial relationship.
It’s critical that you and the lead provider work together to determine a good understanding of quality, volume, and price so that you can design a sustainable lead buying campaign. That simply means a partnership that gives you the leads you need at a price you can afford to buy over an extended period of time. Nothing is more frustrating to a sales team or a lead provider than starting and stopping leads sporadically because of budget.
Ultimately, this means that you will have to make trade-offs for quality and prices, and possibly for volume.
Lead Quality
There is no bigger complaint or missed customer expectation in the lead business than lead quality. To be completely honest lead quality if exceptionally difficult on the Web.
Lead providers battle spammers, pranksters, competitors, and even consumers that make mistakes and provide inaccurate information. However, most of the best in the business are constantly refining their defenses to these sources of poor lead quality. And these defenses, such as smart Web forms, inline data verification and validation, as well as a multitude of sophisticated data scrubbing technologies cost money and add to the price of the lead. Consequently, lead quality has a direct correlation to lead pricing.
This may be the first and most obvious trade-off you need to make to meet your lead budget. Your sales team may have to plow through a few bad leads to get to the gold, but if your lead provider has a good lead return ( for bogus or fake leads) policy this may not be a bad trade-off. Typically a good lead provider will liberally swap out leads with disconnected or unreachable contact information, up to about 10 percent of your order.
Lead Volume
Volume is typically not a problem. Most lead providers can more than satisfy the average lead buyer–a small 10-20 person insurance agency, mortgage broker shop, or debt company is rarely a problem. However, if you are very specific in your filtering by region or lead type you might run into difficulty consistently filling your order.
Larger organizations or even smaller regionally or license constrained sales organizations may have to seek multiple lead partners. This may lessen your buying power, but can give you a better survey of the lead market and who may be the best provider.
Lead Price
Often price is the major constraint in the lead buying decision, especially for a new lead buyer. You need to strike a balance between sufficient volume to sustain sales activity and ensure you make a quick return on the lead buy.
As you can imagine lead pricing will vary greatly from lead provider to lead provider. And more often than not the price is a reflection of all of the other factors we have previously discussed–business objective, marketing methods, quality, volume, and more. Therefore, make sure you evaluate all of those needs first. Make sure you have the right leads and lead providers to chose from first–then negotiate the right price.
Ironically, if you go through the process in the order I have outlined above you will actually have an upper-hand in price negotiation because you will probably know more about the lead provider’s leads and lead quality than the sales person–giving you the power in the pricing discussion.
The best way to guarantee you success in lead buying is to communicate openly and honestly with the lead providers you are considering. Let them know your objectives, explain your organization, and be honest about your experience. Work the leads your lead provider delivers as hard as possible and ask them for best practices. Continuing this open communication and collaboration is certain to bring you the best experience and return on your lead buying investment.
About Bill Rice