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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There are have been a number of announcements over the last two days by companies like Mortech, Leads360 and Kaleidico regarding their “partnership” with Google, more specifically Google’s Comparison Ads.  These companies are now “certified applications” for Comparison Ads and can provide some level of service for the lenders active on the comparison site.

So, coming across these announcements peaked my curiosity about what companies made the list of certified partners. Initially it was pretty tough finding this list, but I did come across a cached page that listed specific partners. I am not sure if this is a complete list, but it seemed like a recent list that now is no longer available.

I was forced to shrink the page to be able fit all the companies into a screen shot. You can either save the image and zoom in or simply take a look at the complete list below the image.

The companies included in the list are:

• Mortech
• OpenClose
• OptimalBlue
• PriceMyLoan
• Kaleidico
• LeadMailbox
• Leads360

Are there other companies?

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Google’s Comparison Ads has been live in the U.S. for about a month and a half and many are curious to know how well it is working for the lenders involved. Well, for starters everyone should understand that all the lenders are currently bound by an NDA and all public comments by the lenders go through Google for approval. Lucky for us our friend and mortgage refinance was able to get his opinions approved by Google and subsequently we are able to publish them here. specialist  at RMC Vanguard Mortgage Corporation, Owen Raun.

So with out further ado An Insiders View of Google’s Comparison Ads:

By Owen Raun with RMC Vanguard Mortgage Corporation

RMC Vanguard has been a lender involved in the initial stages of Google’s venture into mortgage lead generation.  Google makes this on line shopping option available to a limited number of consumers in 15 states who are searching for mortgage.  We are only active in 5 of those states and focus only a smaller range of consumer profiles than most so I imagine we are in the bottom quarter of total leads received to date.  Assuming this blog will be read by lenders I have the following comments.

1 – Lead quality.  The best news for lenders is the lead quality.  Consumers have already viewed pricing and costs from several lenders in a very easy to understand interface.  So once a lead calls us or requests a call back from us we have already passed whatever pricing threshold the consumer has in their mind and have made the consumers “short list”. The leads we have received are more engaged and less “evasive” than leads from other lead generators.  Other factors that speak to lead quality is the Google name which lends a level of trust, a consumer masking system that allows the consumer to initially communicate with lenders without sharing their phone or email addresses and the fact that the consumer is making a choice to speak with us, rather visa versa.

2 – Accuracy of quotes.  Lenders are not uniform on what costs we include in our quotes.  This is a bigger issue with Google than other auto price quoting lead generation systems since lenders are initially ranked by APR.  If 2 lenders have the same rate/point and costs but one leaves out a 3^rd party appraisal then that lender would be displayed higher than the one with the appraisal cost.  Something I think Google will need to monitor or perhaps the new GFE format will be something we can all adhere to. However, it will probably take some time to adopt as we are all used to the old way of quoting costs and Google built its interface on the old set of costs.

There are also some bugs in the system that allow for slightly misleading quotes.  The main example I have is that FHA quotes look better than conventional at LTV’s below 80%.  The system drops the required MI from the calculation.  This and other bugs are being worked out by Google and its lenders.

3 –Lender Competition.  I am not familiar with all lenders on the initial stages but it seems that a couple have yet to work out their pricing.  Being able to have your pricing display accurately takes some work.  The lenders I know that are using Mortech all seem to be within a normal tolerance.  There are a few others that seem to need some work (not sure if they are using Mortech or not).  I doubt any would knowingly quote rates that would lose money   I also don’t think anyone would willingly bait and switch consumers.  Google is going to work in some type of consumer experience factor so lenders that do bait and switch will eventually be called out.  A standard set of best practices and some basic on-line police work will clear this up.

4 – Tracking.  Leads that request that we contact them come with a name, Google phone # and ID #.  We can track these and build assignment rules around them. The lead also shows what quote and scenario the consumer viewed prior to selecting us.  However, a consumer also has the option of picking up their phone and calling us.  So the initial contact with a consumer is an inbound call.  Lenders like us that are setup to get the lead then make the call have some adjusting to do.  I think that a consumer that has viewed our pricing, viewed our costs and has picked up the phone to call us to call is a pretty good lead.  I am not wanting to throw out the baby with the bathwater but it would be nice to know a bit about that consumer prior to the call in, plus be able to rout that call to one of our LO’s who is licensed in the consumer’s state.   Google does follow up with a notice that a call was made but these notices do not fire out immediately after the call and I as a manager do not have a way to track who took the call other than to ask the LO’s “who took a Google call?”.  Not really good lead management on our part at the moment.

5 – Pricing.  To date the leads have been free!   Google will soon start a bid system where lenders can bid by filter or profile what we would want to pay for a refi or purchase lead and what we would want to bid for a phone or web contact.  Sine this hasn’t started I have no idea how the bid system will effect which lenders are displayed and what a lender that bid X would pay for a lead when all other lenders bid above or below X.  Google has discussed this with its lenders and assures us they have designed the logic of the bid system so that our best option is to bid a fair price for what we want, no more, no less.  Also, I am assured that a lender that has bad service and high rates cannot outbid other lenders for “position” on the display.  More to come here.

6 – Volume.  Due to our limitations we have only been getting 1-2 leads per day.  Others have told me they are in the 20 per day range.  Google has said there is a very large amount of mortgage related searches each day and that they think they are confident they will be able to produce a large amount of leads.  Volume seems to be the least of their issues.

In fitting with Google’s way of things they have released the system with known bugs.   They are aware of my issues and probably have a stack of issues from other lenders or lead management/pricing systems.   And there are more pieces to the system that are being developed, such as  allowing consumers to review and rate their lenders, additional filtering abilities for lenders and some way of allowing consumers to learn a little more about the lenders they are seeing on their screen.  Assuming all bugs can be fixed and lenders play fair with their quotes I see no reason why Google play a prominent role in the current mix of mortgage lead generation options that are available today.

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Over a year ago Google began testing a mortgage rate search within their Merchant Search platform in the UK. Not much more then a few blog post here and there discussed the new search tool. Most couldn’t imagine it going much further then just a simple test and the fact that it was circled around generating calls, not specifically data leads, added to the passive concern of so many.

With the new LendingTree suit against Mortech and the revelation of Google’s continued interest in breaking into the mortgage lead generation industry it has proven that the UK test was not performed on a whim and they did have long term intentions. What can be debated is what those intentions truly are. I think to do this we have take a look at more then simply the disheveled mortgage lead generation industry, but the online marketing industry as a whole.

Over the last 5-6 years the online advertising space has been shifting from the typical impression based pricing to click based pricing and more recently to the action based pricing model. In fact, in 2006 Google released the option within Adwords to work within the CPA pricing model, however I frankly don’t know what ever came of it. For that reason I don’t think much of anything ever did, but that may not be the case. Correct me if I a wrong. Regardless, Google noticed the shift and acted. Now, I speculate that they are continuing to act with the UK experiment and the current development of building out a mortgage loan pricing engine of sorts.

How are they going to use the Mortech technology, if LendingTree isn’t able to put a stop to it? Its my guess that they are going to allow people to price out their own loans, possibly allow the consumer to own their loan information or simply sell those inquiries on a per lead price. If this is their intent, my immediate question is where will it end? What will stop Google from running their own lead generation strategies in any other vertical?

I don’t think it is out of the question that Google would continue its push to a CPA based network and continuing to add more control over different verticals at the same time. There are verticals, like mortgage, where Google could easily bring clarity to the consumer as well as consolidate the wide range of quality and transparency issues. A platform similar to the UK merchant search, if positioned highly in the SERPs could easily affect a number of companies generating leads in the mortgage space. My guess, however is that it wouldn’t eliminate the competition completely, but it would make it much smaller. The shift to all encompassing portals with detailed content and information will have to be the norm. Simple arbitrage and landing page type marketing will not be able to compete.

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A study conducted by GlobalSpec that surveyed 555 Marketing and Executive level managers found that while they were focused heavily on lead generation and customer acquisitions they had a very difficult time actually finding enough leads.

More then half surveyed said “there are too few marketing resources”, however they also said that buying quality leads was far more important then receiving quantity. There simply are not enough quality sources according the findings. The study claimed that majority of the responders said, “generating enough high quality leads for sales” was a major issue as well.

Other top findings from the 2009 GlobalSpec Industrial Marketing Trends Survey include:

• 63 percent of respondents will closely evaluate the performance of marketing programs and reduce or eliminate those that don’t perform well
• 43 percent will expand marketing efforts to reach new industries
• 88 percent of respondents will spend the same or more on online marketing in 2009, as compared to 2008

The survey also found that 30% of respondents are reducing tradeshow attendance and 28% are reducing print ads. Lastley, more then one third of the responders stated they would spending more then 50% of their marketing budget online. These numbers continue to confirm the obvious growth and shift of marketing spend online and the substantial growth in the lead generation industry. The obvious key, as it always has been for the lead generation companies, is to generate quality leads, not specifically quanity.

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I am not sure if you have noticed the trend of TV commercials that supposedly trick the consumers into believing they are eating food from a fine dinning restaurant, but are in fact eating fast food. These commercials have been driving me nuts. Let me tell you why.

First, if you haven’t seen the commercials here is a good example:

The consumers are lead to believe they are dinning in a very nice Italian restaurant and are served, in this commercial, a plate of pasta. There was a Carl’s Jr. commercial that served a hamburger to unsuspecting guests and another Pizza hut commercial that served pizza. In all the commercials the guests claim that the food is phenomenal and absolutely delicious. At the end of the commercial the guests are surprised to hear that the food has come from a fast food restaurant.

Why is this so surprising? The secret to these commercials is not the phenomenal food. It is, however, the perception and expectations created by the restaurant alone. There is a good reason why almost half the time spent at culinary schools revolve around presentation of the food. This happens with movies quite often too. Your friends tell you how funny a movie is. They have given reviews in the past that were accurate so therefore you put value in the review of this latest movie. Prior to seeing the movie you already believe you are about to see the funniest movie you have ever seen and you do. You end up loving the movie, however in the back of your head you know it was not the funniest movie you have ever seen. Maybe you just didn’t get it and you doubt yourself. People do this everyday. “The food must be good”, they say to themselves. “I am sitting in a 5 star restaurant”. “The entree cost $56.00, it must be good”.

The very first interaction you have with a prospect will set their perception bar for the remainder of the relationship. These commercials are perfect examples of how it may not even matter how great your product or service is. The commercials drive me crazy because they are exploiting a human behavior that is very predictable and then attributing the results to the quality of the food. I call BS, but I also admit they are giving us all a great lesson in human behavior and branding.

You must take this into consideration with your brand and also the people who are calling your leads. What perception are you setting?

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According to MarketingSherpa’s Business Marketing Survey, lead nurturing is an area that is a point of pain for many businesses. They asked 980 marketers in a variety of industries if they have a process for lead nurturing. Surprisingly, only 56% have a solid plan in place.

56% have some defined lead nurturing process in place, but only 36% of them are satisfied with that process. I believe that most lead nurturing programs out there are not really as successful as they could be in optimizing communications during the sales cycle.

What to do? Many companies are turning to marketing automation. But, whether you’re using a marketing automation solution, whether you’re just working internally, one thing that makes a big difference is segmenting prospects early in the process.

If they came in via a specific lead aggregator, that information should tell us something about who they are and what they want to know. What is their loan request, credit score, geographic location? If they came in via a white paper or a webinar, the topic of those things should tell us a great deal. This valuable information can be added to throughout the communication process to make a more relevant message.

Look at lead nurturing as truly nurturing a relationship that gets deeper and will expand over time. It’s not easy and is a sore spot for many businesses because there’s a tremendous amount of complexity, a lot of moving parts. Most lenders understand their sales cycle, and they understand what people want at different times, but they have a very hard time tying that content and information back into meaningful consumer communications.

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It seems that things like to come around in full circle. Maybe we don’t actually come full circle. Maybe we simply get to a point where objectives become clear again and the things that where cluttering our vision and making our judgments questionable got so fuzzy that we were forced to get back to the basics.

This happened 4 or 5 years ago in the SEO industry. The games of optimizing pages by simply editing keyword meta tags and stuffing the right amount of targeted keywords into the content of your homepage and then seeing results overnight are long gone and have reverted back to marketing basics. Now the focus on relevant content is become the sole focus. Go figure, you now need to create a site that people will actually enjoy using and one that the user will tell their friends about to be successful and acquire high search engine placement. Basic marketing of creating a product that the user wants and needs is now a necessity.

My baseball coach would always preach fundamentals. “Mike, keep your head down, watch the ball into the glove, use two hands, point and through”. I think we often forget the fundamentals of marketing and this years marketing sherpa shows signs and evidence that marketers are getting back to the basics.

According to the Sherpa agencies that own and run the marketing campaigns of many of the top companies in the world have finally realized that they are not putting enough effort and money into landing page creation and optimization and site analytics. Along with landing page optimization and analytics, SEO was at the top of the list for things that are not getting enough effort.

It really doesn’t matter what cool ad network you are running your campaigns on, it comes down to tracking and testing. It also doesn’t matter if it marketing, baseball or selling, you have to remember and practice the fundamentals to be successful.

What fundamental actions do you need to practice?

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Another company that was covered here and interviewed here few months ago, SmartHippo made an announcement today. The community based mortgage shopping network announced that it has created an advisory board that included a number of industry experts.

Founding advisory board members include Lori Collins, former Senior Vice President and General Manager for LendingTree Exchange; Bill Rice, CEO of Kaleidico; and John Philip Green, Founder and CTO at LearnHub.

George Favvas, CEO of SmartHippo.com, said: “We’re excited to have some of the smartest and most accomplished business and technology leaders join our advisory board. Their expertise in lending, customer acquisition, social media, and consumer Internet will be invaluable assets as we grow our business.”

I personally like the SmartHippo model for a number of reasons. First, consumers are given control to compare quotes without having to commit to and waste the time of the lenders like the new Zillow Mortgage Marketplace does. Consumers can shop rates and then read reviews from consumers in the same financial position. They can also base who they submit their private information to on not only mortgage rates, but also the amount positive ratings a lender has.

SmartHippo, in my opinion, has a better chance of fulfilling the needs of the consumer and lenders across the country. Lenders can submit rates through an API or manually. This means you simply have to place a few different rates once per day and not 100′s throughout the day to receive a response. The one big downfall for SmartHippo is their exposure to the consumer market. Zillow has created so much buzz with a lesser product because of the size of their already established view base.

With the creation of their new advisory board and the increased level of press they are getting I don’t see why they will not begin to gain market share.

They recently redesigned their website and added a few very cool additions to the rate search feature. A sliding bar allows user to narrow their search by loan terms or monthly payments. Check it out here.  Keep an eye out for these guys, they are definitely on th move.

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So, who has the most loyal customers in financial services? Here they are according to the Brand Keys 2007 Customer Loyalty Engagement Index.

Bank

1 Wachovia/
Washington Mutual (tie)
2 Bank of
America
3 JP Morgan Chase
4 PNC/Bank of NY (tie)
5 Wells
Fargo
6 CitiCar Insurance1 Geico
2 State Farm
3 Allstate
4 Nationwide
5 ProgressiveCredit Card1 Discover
2 Capital One
3 Visa
4 American Express
5 First
USA/MasterCard (tie) Insurance1 NY Life
2 ING/The
Hartford (tie)
3 MetLife
4 Prudential/Travelers (tie)
5 AXA
6
AetnaMutual Fund1 T. Rowe Price
2 Fidelity
3 American Funds/Janus (tie)
4 Putnam/Vanguard (tie) On-Line Brokerage1 Scottrade
2 Schwab.com
3 Fidelity.com
4 TDAmeritrade.com
5 ETrade.com
6 MerrillLynch.comSource: Brand Keys 2007 Customer Loyalty Engagement Index

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