Pardon the rant, but I need to get this off my chest.
Earlier this year I wrote an article on my previous blog, which was called Morinsight about the riduculous pricing that LowerMyBills was giving out to specific clients. After posting the article Mr. Coffin called my company and insisted that the article be taken down. My boss at the time did not have the guts to tell him to F-off so the article was taken down and of course I didn’t have the guts to tell my boss to F-off either. Funny thing was the information was so well known that I had known it about it months before we negotiated our own pricing. Really it was just silly that a CEO and founder would implement a pricing strategy and not be confident enough in the strategy or feel right about it to allow an opinion based blog give its two cents about it. I know some of you may not have read the article and unfortunately it is on my PC that recently took a “break” on me. I should be able to post the article again once the computer is back up and running. The closest thing I have is this post that includes a couple of paragraphs from the original article. The article was actually very tame.

In the second quoted paragraph when I mention smaller quality shops I am referencing smaller Lead Providers, not mortgage brokers. It is not a secret that LMB has struggled all year like many others, but their losses began Q4 of 2006, prior to the sub prime debacle. The significant price reductions also began prior to the sub prime debacle. The point is that they in my opinion looked to be hurting before much the storm hit. In the article I wrote earlier in the year I speculated that LMB was trying to hold onto their network of buyers in the mist of providing poor quality leads. I have a feeling that Experian had set specific lead sold expectations for LMB and not revenue or price expectations and Coffin and team were simply trying to hit them. This purely speculation and I am only guessing.

Either way what they did to the whole market and what they are continuing to do is ridiculous and shameful. Sucking in buyers with really low prices that they know they will lose money on simply to keep them on their network is bad strategy for the LMB and the buyer. Not only does it hurt the buyer but it hurts quality lead providers that care about making a profit. Buyers have a ridiculous expectation of lead cost. Don’t forget I wrote the original article when I was a lead buyer and I have not started at my new place of work as an Internet Marketer yet, not a sales guy. At the time of writing the article I knew that their leads were horrible and I was concerned that price was nice and attractive but were not going to help our ROI enough to make since and it didn’t. The leads were still sold 5 times, were still attracted by eye catching animations and hard to qualify for rates. These types of leads are only good for LMB. They are sold 5 times = $$ for LMB and the ads created a high click through rate = $$$ for LMB. Neither of these attributes create a good lead.

Now we have a company that has not posted a profit in a year (please correct me if I am wrong and I am not talking about Experian as a whole) that is in a hole that they created for themselves and has taken the industry down with it. What is the best thing a lead buyer can do? Until a good friend, John Challis reinforced the importance of ROI to me some time ago I would not have had an answer. I think know that many buyers base their decisions on price alone and that is ok, to a point. A low lead cost is an enticing attribute of a lead, but it does not produce a return, ROI. It only produces a low lead cost. Quality leads range in price, but they do not range in ROI. The ROI is always high!

I do want to mention though, I would be crazy to say that people cannot gain a healthy ROI from LMB leads. Shoot, I know a group of guys that have a great ROI from the evil $.25 trigger leads and the phone book. My point is you have to consider each provider differently and judge them on ROI. If you don’t you will shoot yourself in the foot. In the marketing world product pricing is can be fun to tool around with. Consumers often think that higher priced items are better and lower priced items are worse and other times it is completely the opposite. At the end of the day the consumers satisfaction on the price of the item is determined by the item and its quality. Are you buying quality items?? Look forward to a future post on what I think a quality item is and how to find them.

So this is my question to you. When do you think, if ever LMB will begin to raise their prices? They will have to do this if they want to show a profit or do they? They recently combined a number of different Experian website under one umbrella. Did they do this to give a better overall picture and health of Experian Interactive?

Any predictions for LMB in 2008, hell the whole lead industry for matter?? Lets hear it.

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