A few weeks ago we discussed what I believed to be a valid lead. Take a reread of the rant at the link you just passed by to catch yourself up on the topic.

I want to revisit this topic because some lead sellers are taking advantage of very small loophole, the email address. Lets get something clear. Lead Buyers expect a valid lead to be one that can be contacted by phone. In most cases they expect a person to actually pick up the phone and not simply ring and ring and ring and ring, leading to no answer and no voicemail. I have been involved with working leads for about 6 years now and never once would expect to only rely on the email address to contact a prospect. Aside from how important email is to nurturing and following up with a lead it is hardly a sufficient means for an initial contact and in many cases a follow up. In fact, I would put money down that if a lead has an invalid phone number it has almost has no chance of being contacted, much less converted, through email.

So why is that some lead sellers think they can charge for leads with an invalid phone number but a “valid email”?

Yes, I believe a valid email is someone that filled out the form and was able to be spoken too, but no I don’t believe a valid lead is one the only includes a valid email address. Simply typing in a random email or making up an email like “john@hotmail.com” will result in a positive email address. Does this mean it is a valid lead? Hardly.

So to those vendors out their trying to force buyers to pay for leads that have a “valid” emails, your simply ripping off your buyers, plain and simple.

Please correct me if you are having success with leads that have an invalid phone number and a valid email address. Maybe my experience is only relegated to only me.

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In general, the ability to return leads is a safe guard put in place by lead sellers, or demanded by lead buyers, that allows for a certain level of leeway when paying for “leads”.

The acceptable reasons for a lead to be returned are fairly specific and generally boils down to the definition of a “lead”. Quickly, what is a lead? For some reason this definition is not completely clear to most. While it would seem a very simple question. When you throw in the topic of returns or the payment for qualified leads, it gets a little blurred. A lead is a person that has indicated interest in a product or service by requesting to be contacted through a inquiry form online or via a number of other sources.

We then layer on the confirmation of valid contact information.  The information needs to be accurate and correct so that the business receiving the lead can actually contact the prospect. Without over defining the completely obvious, many buyers and sellers have agreed that the prospect not only needs to have accurate contact information, but they also need to confirm being interested in the service or product and having filled out the form when the seller claims they filled out the form.

More recently, many buyers have implemented lead scoring methods that have increased the number of rejects and returns of leads. I guess before I go any further we also have to take note of the difference between rejects and returns. Again, without mulling over the obvious, rejects are typically leads that are rejected at the server level, before a lead ever reaches a CSR, for validation reasons. A return is when the lead actually goes to the CSR and is then returned. Okay, the obvious is clearly stated now. Lets get to the point.

Recently some buyers have taken the stand that leads will not be paid for reasons that have nothing to do with what in the past has been defined as valid. Claiming a lead does not meet a “score” or is no longer interested for a host of reasons, in my opinion, does not constitute a credit. What it does constitute is a calculated lead management process. Creating this lead management process is a obviously a lot more risky to a buyer then simply using their buying power to force lead sellers to accept the returns. Heck, what is scary is that these “returned” leads may still continue through a lead nurturing process regardless of any credit. We would like to hope that is not the case, but it is definitely questionable.

The problem here is not a high return rate, per se, but rather the lack of properly working the leads. The easiest way to improve conversion numbers is to return leads. It is that simple. Just return the questionable leads. If a person says they are Not Interested, for whatever reason, just return the lead. Instead of working the lead, redistributing it to an email campaign or even a different CSR, or one last contact attempt, just return the lead and only pay for leads that are more likely to close.

We already know the appropriate process in this situation is to correctly work the leads. Another option is to lower your CPL and pay the right price for the leads. A price change gives the sellers the foresight and the ability to adjust marketing budgets so that it will be inline with revenue. The approach is more proactive and manageable. Simply returning leads 30 days after marketing dollars have been spent, is an action furthest away from partnering with a lead generator.

If you are returning more then 20% of your leads, there is a problem either with the quality of the source or your returning leads for extraneous reasons. An average return rate for most verticals is 10%. If it is lower or higher across different verticals, I wouldn’t be surprised, but like I said anything above 20% is a problem.

So, are buyers properly working leads, returning leads that simply are not valid or using it as a scapegoat and simple solution to increase revenues?

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There is a lot of talk about educating the consumer and providing the proper content so that they can make informed decisions. In the finance space this content is completely missing from the lead generation process. In the EDU space there is content overload.

The finance space provides very little information about the companies the consumer is being matched with until after the consumer has committed to receiving phone calls from unknown companies. There are a few companies that are changing that process as we speak, but I can continue to make that general statement until it becomes the norm. What the finance space does do well is cap the amount of companies that will contact the consumer. While we all know there are companies that sell their leads more then they claim, we can assume that most legitimate companies are being ethical and responsible with their distribution model.

On the other hand you have the EDU space that provides a ton of content and allows the consumer to choose what schools they would like to receive information from. This is a nice idea and I think is the right thing to do. I believe the problem is when companies allow consumers to choose as many schools as they want. I have talked about this in a past article called the “The Branded Lie” , but what is possibly allowed to happen will tarnish even the best traffic.

For the long time LeadCritic readers you may remember me talking about selling leads multiple times and when the degradation of quality comes into play. I have always said that exclusive leads are never worth the additional cost. And long time lead buyers will be the first to tell you that NO lead is exclusive. It is simply not in our nature to make one choice when shopping for a product service. We always compare at least 2 options before we make a decision. Consumers looking for a mortgage quote or a University to continue their education at are going to do the same. The question is whether or not you can control the shopping process and do it properly and therefore providing the consumer with the right amount of choices that will satisfy their search, but not reduce the quality of the lead being sold. I believe that there is a specific number.

What do you think?

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I would like to think that our industry is not the only one that has such a wide array companies from the completely unethical to the highly ethical and honest, but because of its fairly low barriers of entry I think the lead generation industry might be the only one.

I started writing on this blog 3 years ago with the goal to out companies that took advantage of lead buyers. Unfortunately some the same companies that have been written about on this blog a number of times are still in business, but the good news is that many have fallen to the wayside. It is also important to note the companies that follow high ethical standards, or more frankly show any level of ethics. When I used to buy leads I would share which companies were performing the best and who in my opinion held themselves to higher standards then the others.

Unfortunately, I am not buying leads directly anymore so while I can pass along information that other lead buyers have told me, I can no longer directly speak to these topics anymore. For example, in the mortgage space I surveyed 4 significant lead buyers which constantly mentioned receiving excellent quality leads from LeadPoint, QuinStreet, MortgageLoan.com  and Adchemy. I know first hand that these companies employ leaders in the space that care about the consumers experience, lead quality and the lead buyer. If you are in the mortgage space you should take a look at these companies for leads.

Even though my lead buying responsibilities have been relegated to almost nothing I obviously continue to receive results and feedback from many sources. Additionally, I continue to work with a number of companies in the industry. One such company is TARGUSinfo, and while there are a number of verification and lead scoring companies in the market, such as eBureau and others, TARGUSinfo seem to stand out of the pack. Last week I had the pleasure of meeting a few members of the TARGUSinfo team at an office grand opening networking event in San Fransisco. At the event they obviously discussed their expansion into the West Coast with the new SF office, their expanded verification database, and the Lead Scoring Summit.

I had the chance to voice a few concerns about the issues many generators are facing with lead scoring. Currently buyers are implementing scoring methods and in all cases none are alike and very few share the methodologies with the sellers. Here inserts the big problem. I am not going to get into detailing out the problem in this post and let you figure it out on your own, but there is a clear problem when advertisers have no clue what leads are being rejected for minimum score caps or for what ever the reason may be. I brought this growing problem up with of the leaders and they listened, which is what you would expect, but why I think TARGUSinfo stands out from the gray murky crowd is because I know they understand the importance of transparency and will preach it to their current clients. This shows in a number of their conference sessions at the Lead Quality Summit. Now, of course the premise of the summits put on by TARGUSinfo are self serving marketing events, but that goes without saying that they benefit the whole industry too. Educating buyers and sellers on the proper lead scoring tactics and preaching transparency is worth every client they get from putting on these shows.

Great companies just don’t end with TARGUSinfo, instead they continue with companies like DoublePositive, Bills.com, GearyPMG.com (ok, a little bias there), Adchemy and many others. For every asshole slime ball you may run into that sells exclusive leads multiple times, prepops form fields with aged data and simply lies to about how their leads are generated, there are 10 other companies that are are honest hard working professionals that not only care about their own companies success, but also understand that becoming successful means their clients need to be too.

So, in light of all the BS in our industry, a quick kudos needs to be sent out to all the companies named here and that also went unnamed here that put their clients success first and hold high ethical standards.

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To really do well with Internet leads you have to do a number of things right. You need to have the right personal, the right lead management process, the right leads, proper tracking and analytics, the right re-marketing campaigns, and slew of other things. With this is mind do you really need to know exactly where the leads are coming from?

As a lead buyer I wanted to know how the leads were being generated, where they were being generated and how many times they were being sold. Today, lead buyers are expressing the same concerns within their conversations about transparency. This is the same discussion that I mentioned last week and it has been going on for years and years. After I wrote last weeks post I sent a quick note to friend Bill Rice:

Before I show you what Bill’s response was let me share a little history with you. I started this blog a little over 3 years ago and the first person who noticed and acknowledged the blog was Bill Rice. He was one of the first lead gen bloggers and CEO’s to really understand the power of social media. He still remains on the leading edge of lead generation, lead management and social media. Lets put it this way, he has been around the block a few times when it comes to lead management.

With that said, here was his response to my post last week.

lol, and I still get a chuckle when I read this tweet, but isn’t he right? When it comes down to it, isn’t it all about lead management and ROI? Is the transparency discussion just a red herring to poor lead management? Aside from knowing how your brand is being represented, does it really matter how your leads are being generated?

I don’t want to sit here and ask a ton of rhetorical questions, but really. When it comes down to being profitable with online leads and all the things that need to be done right to show just the smallest profits margins, shouldn’t we being having more passionate discussions about lead scoring, pricing, and analytics rather then transparency?

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There is a strange similarity between transparency and love.

I find it a little humorous quite frankly, but let me try and explain. I don’t claim be a industry veteran by any means, but for the last 6 years or so I have continued to hear the topic of transparency. Everyone has a different definition of what transparency is, though. I have heard people claim it is only a scapegoat for lack of quality. I have heard buyers claim they don’t get enough of it from their lead sources and vice-versa. In all reality a certain level of transparency is needed for a successful partnership (Partnership = High Quality Leads = Positive Results) to be created.

What is transparency and does it mean different things to different people? Here is what I think buyers and sellers thing transparency means?

Buyers definition of transparency: Knowing exactly what each lead source is doing to generate leads. Knowing what the creative says and looks like, knowing where the ads are being placed, knowing the exact source of every lead (did they come from the another company or were they organically generated), what keywords are being bid on, etc

Sellers definition of transparency: Conversion data (contact rates, app rates, conversion rates, etc) knowing what the Lead management process is.

Let me know if you think something needs to be added to either of these definitions.

So, how does love compare to transparency, you ask. We like to call the relationship between buyers and sellers “partnerships”. These partnerships are similar to interpersonal relationships in that, in the early stages of the relationship, there is a lack of trust. The trust needs to be earned, and it can difficult to earn if one of the parties had been burned in the past. Whats funny is when the relationship gets to a point where both parties clearly care about each other, but both are afraid to be the first to say “I love you”. Neither really wants to stick there neck out there for fear they will get hurt. lol I can’t help but to laugh, because its a silly analogy, but I feel like its exactly what is going on in the lead gen space.

We have been talking about transparency for YEARS! We both want the same thing. Seriously, exactly the same thing! Lets just do it already. Should we plan a day where we say it at the same time, “I love you!”  Why are companies simply not willing to share their data? Obviously there is an insecurity about sharing the data.

Do sellers really need all the information they want or are the just “nice to have”? Frankly, I think there are some cases where the requests are just nice to have and others are a necessity, for legal reason. Lets define what is actually needed. Thoughts?

Do sellers really need all the information they are requesting? I think they do. The real question is do they actually do anything with the data. All the data requested by sellers, if applied, can extremely help the performance of a campaign.

Last thought: I think we are making a ton of progress and we are close to standardizing the expectations of transparency. Both parties simply need to take a risk, stick their neck out there and be more transparent. Who knows, maybe you will find that it will strengthen the partnership.

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In this industry, specifically the lead generation industry, you don’t have to be around very long as a lead buyer to be able to start sniffing out the questionable lead sources. They claim to generate thousands of leads through SEO and Paid Search, but a quick glance at their websites stats tells a vastly different story. How do they get all those thousands of leads? It gets fairly easy and over time you learn to trust your instincts.

The problem arises when the companies are a little more difficult to spot. They are top tier lead companies and in many cases they don’t play games with their buyers, but what they do do is play games with their affiliates or lead partners. If you are in the EDU space it is possible that these companies are directly representing you and your company. They buy leads on your behalf, as an Agency of Record, and skim numbers, don’t fire pixels, return more leads then allowed. They get away with this because they have the buying power to bully partners around. Are they representing your company they you would like them too? What happened to ethics in business? I don’t know.

In the next few months there will be new developments in our industry that I hope will bring ethics, honesty and higher business standards. Keep an eye out.

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Are they really “branded leads”? Better yet; Are “branded leads” really exclusive?

The EDU space is different then any other vertical slightly different then other verticals in how leads are captured. I am tempted to cross out the whole sentence and say that it is no different then any other vertical, but I will give the vertical a little credit and say it has a few differences. The key difference is the attention that lead buyers give to “branded leads”. Even though directories have been around in other verticals of ages, like the mortgage vertical, the attention to buying branded leads has never been so strong.

For those of you in other verticals not familiar with this terminology I will confirm your assumptions by telling you what a branded lead is. A branded lead is where the consumer chooses to receive more information from a specific company, rather then being matched with a company not of their own choosing. Take a look at this page on CollegeBound to get an idea of a process in which a branded lead could possibly be originated from. A consumer would search through these listings and choose the specific school they wanted information from. The underlying thought is that these leads have a certain level of exclusivity to them and therefor convert at a higher rate.

It makes sense to assume that a higher conversion would come from a process where, after some level of education, the consumer manually chose the company they wanted information from. However,  I don’t think that is the sole reason for a higher conversion and I think there are a number of buyers that buy into the hype that a “branded lead” is the sole reason for a the higher conversions.

Lets compare a “branded lead” process to non-branded lead process, which many people call a “Daisy Chain”. IN many cases the difference between these to process is difficult to determine. Both allow the consumer to choose teh brand in which they want to receive additional information and there rests the real problem for lead buyers. There is too much gray area between these processes.  Lead sellers know that buyers are looking for “branded leads” so they build out a process that show school specific content and logos and therefor call it a branded lead. The source of the lower conversions come from a process that encourages the consumer to choose as many schools as they would like, regardless of if the forms are “branded” or not.

There is a certain level of competition that the consumers needs to make an educated decision and it is in line with how many times a lead can be sold without affecting the conversion rate of the buyer. What first needs to be realized is that NO lead is ever exclusive. A consumer will continue to search and fill out forms throughout their shopping process, if given the chance.  Additionally, based on my own experience, which could be different from others, an exclusive lead rarely converts at a rate high enough to justify its additional cost. Without question I think there is an optimal amount of times a lead can be sold and it is not just once. That number is not the point of this post, though. The point of this post is that buyers should not be fooled by companies claiming to sell “branded leads”. As a buyer you need to test your partners forms to see what really is happening through the lead generation process. By doing so you will find that in most cases companies create processes that encourage consumers to fill out up to 7 “branded” forms, if not more. This process completely negates the quality of a “branded” lead. A good example of this happening would be CourseAdvisor or even the collegebound example I referenced above. After filling out a form the consumer is redirected right back to the same list of schools or in the case of CourseAdvisor shown another school until there are no more options to choose from. I came across a form by Education Dynamics that allowed me to initially pick 3 schools, which in my opinion is completely acceptable, however on the Thank You page they encouraged me to continue my search by choosing more schools, which is where I think the process begins to cross the line. I choose 7 schools until I just got tired of filling out the different forms. The good news for buyers is in the fact that Education Dynamics does not auto populate fields that have already been collected on previous forms and subsequently makes it fairly annoying for the consumer to continually fill in the same info over and over. It is my guess that consumers bail out of the form after 4 or 5 choices just because of the sheer inconvenience of the process. Yes, they give the consumer the option to say “No Thanks” to more options, but what is the point of allowing the consumer to make so many choices if it is not in the benefit of either the consumer or the buyer?

It is my opinion that companies don’t need to give consumers the ability to choose more schools. Simply educating the consumer on what is going to happen next, that schools will soon be calling them and that their immediate search should be halted until they decide that their initial choices were unsatisfactory. Additionally,  giving consumers too many choices usually results in no action at all. The likelihood of the consumer choosing any one of the schools decreases with the increased amount of selections made. This fact has been proven by a number of consumer behavior studies made available in books like Predictably Irrational.

Is there anything wrong with buying “shared leads” or leads that have been sold to more then one school? Absolutely not! Just don’t be fooled by the hype that a branded lead converts at a higher rate alone. A branded lead can be extremely over sold if the process allows it be. The best advice I can give buyers is to base your continued purchases on statistics, not whether a lead is exclusively branded or not. Completely vet your sources by filling out their forms. Score your leads and lead sources and determine the right filters, sources to continue to buy from and the prices you should be paying. Don’t simply buy leads based on whether or not the sales associate used an industry buzz word.

A quality lead comes from an educated consumer (branded content) and a controlled matching process… and a whole bunch of other things!

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Their are so many factors that affect lead quality. The list is long, so you are not going to find it included in this post, but there is one specific item that is on that list that I do want to discuss. Ask anyone that has been involved in the lead generation industry for longer the 5 years and they will tell you that the space has been growing at an amazing pace. Right or wrong I think I have seen articles stating that the industry produces tens of billions of dollars every year and is growing at a rate of 20%+ per year. The bottom line, the industry is growing at a healthy pace.

This growth rate has opened up the doors for few problems though. Similar growth, times 10, was experienced with the mortgage bubble and what resulted was an increase in the amount of fraudulent companies that popped up to scam lead buyers. What I am seeing now, and that is much different then what occurred in the mortgage heyday, but that still stems from a healthy growth rate, is that there is a ton of demand and a little supply of quality companies. These companies have a number of different titles: Media Companies, Affiliate Networks, Lead Generation Companies, etc.

Where the problem lies, (Just to be clear the resulting “problem” that I am speaking of is a lack of Lead Quality) is that many if not most of the companies you will speak with, don’t generate their own leads. Meaning the leads they are going to send you were not generated on their forms or sites. Now the problem is deeper then simply working with a company that does not generate leads on their own forms, because there a number of companies that offer transparent services and situations that don’t generate leads on their own form and those companies are ethical and hold a high standard of quality.

Many companies will reach out to other companies for traffic/leads and then those companies will go to other companies for traffic/leads, then those companies go to other companies for traffic/leads, until the oversight on the tactics being used to generate that traffic/leads has been reduced to nothing and subsequently the lead/traffic quality erodes completely away. Don’t get me wrong, there are companies that generate their own leads, run offers to their own lists and manage their own search campaigns. In fact, it is my opinion that in most cases you should only work with those companies. I think doing otherwise you run a significant risk on buying low quality leads/traffic.

Buyers beware, because it can be hard to spot these companies and companies that may not specifically “drive traffic” may have top quality leads. My suggestion is that their are different stages in your lead/traffic buying that can accommodate different levels of risks. It is up to you to know when the stages occur and what level of risk you can take when testing a new company.

Seems obvious, but with the growth trends that our industry is experience opens up opportunities  for companies to grab demand, regardless of it they are simply brokering a service. It is up to you to continually monitor quality regardless of if a company is broker a service or not. Hopefully, knowing what was is going will help you do that.

Anybody disagree or agree?

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