LEADCRITICLowerMyBills Layoffs
Filed Under: featured, LowerMyBills
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Yesterday, it was posted on Rumory and then confirmed by a more reliable source here that LowerMyBillshas slashed their staff by 40 to 45 people. It is said that the layoffs occurred across the board and involved everyone from sales to middle management.
Is anyone really surprised by this? No.
Obviously the mortgage lead generation vertical has seen better times and many lead-gen companies are suffering for the same reasons lenders are suffering and of course it has to do with market conditions, but also poor management. It is always difficult to see hard time coming when things are going so well, but the best companies begin to diversify when things are good and do not wait until they hit bottom.
I personally think that the overall strategy for LMB, after the Experian acquisition, went to the toilet. Their initiatives to produce volume to meet Experian set goals and disregard the health of their clients and the quality of leads was the beginning of the end. Then being the first company to slash prices to levels that covered maybe an 1/8 of what the cost to generate the lead was only to sell the large amounts of volume took much of the industry down with it. Remember this happened prior to the subprime debacle. By no means am I saying that LowerMyBills is the reason for the declining market but they did accelerate a decline in price and quality in the industry.
This opinion of mine is nothing new and have been saying this since late 2006. I am sorry for the employees that are now forced to look for new jobs, but there is a part of me that hopes that some of the upper manage would be let go and replaced with management that has the client, consumer, industry and of course LowerMyBills in their best interest.
We will see…
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Noel Collins | Jul 23, 2008 | Reply
Experian should spin off the unit just like IAC spins off Lending Tree. Let the units stand and make decisions on their own.
father fran | Jul 23, 2008 | Reply
That rumory post says leadpoing also having layoffs. Any confirmation of size or scope over there
This is not surprising given lendingtree and others have had multiple rounds
Sucks but not surprising
exLMB employee | Jul 23, 2008 | Reply
Having worked at LMB for over 4 years and recently departed earlier this year I can uniequivocally agree with leadcritic’s assesment of the beginning of the downfall and the main reasons why the company went downhill. Morale amongst employees was spiriling down fast with all of the top talent either already gone or looking to leave. It was evident that certain senior management had a one track mind when it came to making decisions which always revolved around how fast they could stack their own wallet. Its a shame really because they had a golden opportunity to turn LowerMyBills into a real internet powerhouse portal with multiple service offerings benefitting the consumer. Their only hope now is if Experian can come in and clean house and make the best out of what is leftover.
Josh Stomel | Jul 23, 2008 | Reply
This is unfortunate for LMB, however they were acquired in 05.
Market is different now, there is room to put the dream team together and build the next LMB for Debt.
This will happen.
Josh Stomel
Josh@neohire.com
doug | Jul 23, 2008 | Reply
Then being the first company to slash prices to levels that covered maybe an 1/8 of what the cost to generate the lead was only to sell the large amounts of volume took much of the industry down with it.
That statement is an absolute falsehood. Proves this author takes different companies practices and combines them for a better story.
Lead Critic | Jul 23, 2008 | Reply
Sure Doug,
Since you have first hand experience and are currently with LMB and I don’t have that experience nor do I work for LMB, why don’t you explain the correct scenario for us.
Explain the decrease in prices in late 2006 and the major decrease in quality right about the time upper management was going to receive bonuses. Then a little less then a year later, much of the upper management and employees left.
I wasn’t there so I am sure I have the facts wrong and of course are only based on my opinion, as I stated. I only purchased leads and experienced the major price cuts from that end, not yours.
Please explain the situation and also which company I am confused with.
Thanks for the clarification and please dont mistake me for being sarcastic.
bridge over tumultous waters | Jul 23, 2008 | Reply
Nextag and LMB started selling high ltv, loan loan amount leads for a few bucks in 2006… but go to mortgageoutpost. People there complain about the high cost of LMB leads, even today. Not the low cost
Hell, call LMB today and ask for a price quote…
Quality I think has just fallen in general over the last few years, maybe more at LMB, maybe less. They were never lendingtree to begin with
Lead Critic | Jul 23, 2008 | Reply
Agreed Bridge,
Things may have changed or flattened. Buyers will always complain about prices.
SomeInsider | Jul 24, 2008 | Reply
Here is a quick look back at pricing from an insider.
When the subprime market imploded we saw the likes of Ameriquest, New Century, and companies of that ilk disappear. We are talking about aggregate lead budgets in excess of $30 million dollars per month gone virtually overnight. Meanwhile, lead providers buy advertising upwards of 30-90 and more in advance. So what we saw happen was, many large media buyers like the company being discussed here had media commitments based on buys by these lead buying giants. So when they caved, the media buyers tried to get out of as many buys as they could, but they certainly could not get out of all. So they were left with a flood of leads – inventory – with a marketplace – demand — now a fraction of the size of what it used to be. As we all know, when supply exceeds demand, prices fall. These lead companies had to execute a fire sale in order to off-load inventory and I think that is what LC is referring to in driving down prices. Although he says it happened, “before the subprime debacle,” I think it happened at the very beginning, but there is no arguing the phenomenon. It happened.
As for pricing now? The market has corrected and I am sure that their media buys now more closely reflect the demand for their product and that is why pricing has “normalized.” But again, there is no disputing what happened, and that is what LC is referring too.
Noel Collins | Jul 24, 2008 | Reply
Wow Insider used the word “Ilk”.
Before the collapse New Century bought $250,000 of leads each month from a single provider I know, imagine how much they bought combined. I do not remember the lead providers calling them “Ilk” at that time, LOL.
Back to the point, how many of you out there are or were long time buyers? If you are a long time buyer of NexTag, Adteractive, and LMB leads you will remember the price increases of 04’ and 05′. I remember 3 price point increases between 8/04 and 07/05 alone.
LMB lead the way in price point increases. We were told it was for the good of the industry, that LMB had the best data out there. Think social security numbers, data scrubbing and selling the lead 5 ways. My rep was so in love with the LMB story line he told us selling the lead five ways improved conversion. How does selling the lead to one additional competitor improve conversion ratios? And what about the no returns policy post Experian acquisition they enacted in 2005’. Doesn’t that constitute another price point increase?
Lead providers held the high ground and constantly used the story line that “We cannot deliver leads at that price point”. Raise your prices or buy weekend leads or open up your filter set was the common response when you called asking where your supply of leads were.
This supplier holds all the cards mentality created an atmosphere of disdain for the average lead provider. So when the collapse began there was a sense within the industry of “Let’s get them back”. A vicious cycle of buyers seeking the lowest price points and providers having an overabundance of leads occurred and I surely took full advantage.
By March 15th 2006, our organization reduced average price per lead by 50-60%. The price point reduction held in part due to the collapsed market, lack of product and liquidity and demand. But you can bet your milk money the cost will soar as soon as the market rebounds and lead buyers need volume in all filters. Which provider (assuming they are still around) do you think will raise the prices first?
SomeInsider | Jul 24, 2008 | Reply
ilk
–noun 1. family, class, or kind: he and all his ilk.
–adjective 2. same.
—Idiom3. of that ilk, a. (in Scotland) of the same family name or place: Ross of that ilk, i.e., Ross of Ross.
b. of the same class or kind.
Noel Collins | Jul 24, 2008 | Reply
Sounds like a negative euphemism to me Insider ala Slender - Thin - Skinny.
Bootyjuice | Jul 24, 2008 | Reply
Was WaMu with their “crazy” HELOCs part of that ilk ?
Just Another Lead Generator | Jul 28, 2008 | Reply
Leadpoint’s business development unit recently lost a significant talent. Although that individual’s departure alone doesn’t portend trouble for Leadpoint, I’m getting some other signals from within their organization that aren’t good.