The art of converting marketing traffic into actual sales, what we call in the lead generation space as lead management, as finally started to hit main stream conversations. Customer Relationship Management platforms have been fooling performance marketers for years now claiming they are the best way to convert sales, when in fact they fall way short. In the true lead generation and performance marketing era, lead management companies have started where CRM’s have left off and have provided huge benefits to companies that made the smart choice of focusing on the intricacies of converting leads into sales.

Today, the Wall Street Journal Online released a nice article highlighting 3 ways to convert online leads into sales. What was nice about this article is that it took a deeper look at lead management without the fluff of customer relationship management speak. The article has a few very nice tidbits of information in the article that makes it worth the short read. Additionally, two companies that have been highlighted here on this blog, were also highlighted in the WSJ article – Leads360 and LeadQual. These two companies have released a number of white papers that have detailed statistics resulting from their own internal studies. The collection of papers have helped create lead management standards and have helped remove much of the guess work that is usually involved with building out the proper lead management process. For that I give kudos to both companies and congratulate them on the WSJ mention.

Wall Street Journal Article:  Three Best Ways to Convert Online Prospects into Clients

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We talk about EDU being a counter cyclical vertical whereby when the economy is down and jobs are scarce people look at furthering their education in hopes of a better future. And subsequently lead generation companies follow and capitalizes on peaking vertical.

Another vertical, one that I have less experience in, that looks to be counter cyclical to the health of the economy is the Payday loan vertical. Not only is it a growing vertical and demand for these leads have increased, the actual demand for payday loans increase based on seasonality trends.

According to Google the trends relating to the search phrase “payday loans” clearly has grown year over year. Additionally, the summer months and of course right before the Holiday season tend to see great search volumes. The payday vertical seems to be a fairly easy to predict when it comes to season trends. I am not sure how that translates into the supply and demand trends for the vertical, but is interesting nonetheless.

I will be keeping a closer eye on the vertical. If anyone has an opinion they would like to share I would love to hear it.

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Lead Generation is a big business. Unfortunately, however, the lead generation industry has very low barriers of entry. And with the further development of technologies like ClickPoint ( LeadCritic advertiser) and other companies it has become even easier. A person could begin generating, brokering, or selling leads as quickly as they can find someone to buy them.

Where lead generation becomes difficult and barriers begin to expose themselves is when you insert the word “quality” into the equation. Quality lead generation can be challenging, especially in fully saturated verticals. As demand begins to reach the limits of supply the ability for new companies to enter the market and generate quality leads becomes difficult. These new companies have to be exceedingly more competent at how they generate leads. Simply entering into a new vertical and performing the same marketing strategies that companies more mature in the industry are performing will simply not be sufficient, unless you can do it significantly better. The other alternative for new companies is to change the process in which the leads are generated.

This shift from the norm can be manifested in multiple ways, however the laws of a mature lead generation vertical will still provide steep barriers of entry regardless of any innovation in the marketing. The silver bullet, if there is one at all, in my opinion is not found specifically in the marketing of the web destination, but rather in the technology provided by the user at the destination. Money better spent in a team that provides a unique service offering and that fills the need of the consumer will be better served then money spent on a team from MIT that builds out a new PPC bidding algorithm. Clearly the investment in such an algorithms would not go unserved, but it in my opinion the investment in on-page-technology will not only fulfill the need of the consumer but also the needs for traffic. The problem with this theory is that in many cases it requires a substantial initial investment prior to seeing a return.

The benefit, however, is the ability to remove a certain level of competition by differentiating yourself from the crowd. In a saturated market this will give you access to users that have a high level of intent and subsequently a level of quality that only market leaders typically have access too. I suspect we will continue to see companies insert themselves into very competitive markets and deliver low quality leads, all the while communicating that they have a special tool for driving leads. I also think we will continue to see companies invest in on-page-technologies that will revolutionize the lead generation process and therefore create a new way to generate quality leads in a saturated market. Unfortunately for those companies utilizing the same tactics they will be left with a smaller pool of quality leads to pull from.

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A few weeks ago I referenced an analysis put together by InterEd at the end of this post. The link to the presentation is at the end of the post and is worth a second look. It helps argue the fact that the for-profit education industry will play a significant role in educating millions, and at a significant discount when compared to state run schools.

Today, Apollo released a paper that takes a similar approach in defending the for-profit EDU space. The paper titled “Higher Education at a Crossroads” argues that the education goals set by the current Administration are unattainable without for-profit schools.

Here are the highlights from the businesswire:

• Education is critical for America to remain competitive in a global, knowledge-based economy. Since the 1950s, the percentage of jobs that require advanced skills or education has increased from 20 percent to 60 percent. Despite this fundamental change, today only 35 percent of the American workforce has attained a four-year degree.
• Increasing the number of college graduates, a central goal of the Obama administration, is a challenging and costly endeavor. Using the public higher education system alone to educate the tens of millions of students needed to meet the President’s goals would cost more than $800 billion over the next ten years. Well managed proprietary institutions can meet growing demand for expanded access to higher education at less than half this cost.
• Accredited, degree-granting proprietary schools like University of Phoenix play a critical role in educating “non-traditional” learners. Today, 73 percent of college students are classified as “non-traditional” by the Department of Education, meaning the traditional four-year residential college experience simply doesn’t work for them. Proprietary schools innovate and adapt to the needs of these students – who represent the majority of all college and university students in the U.S. – with flexible scheduling, small class size, and high levels of student support.
• Students at four-year proprietary institutions borrow less on average than those at traditional private institutions but more than students at four-year public schools. Non-traditional students have significant borrowing needs due, in part, to their financially independent status. Students at proprietary institutions tend to default at relatively higher rates; however, demographics have a more meaningful impact on default rates than institution type. At University of Phoenix, the 2008 two-year draft cohort default rate was 13.1 percent based on the incidence of default; however, the dollar-default rate (the true economic impact of defaults) for the same period is estimated to be just 6.7 percent. Furthermore, for students who have graduated with a University of Phoenix degree, the cumulative default rate is estimated to be less than 1 percent for the 2005, 2006 and 2007 cohorts.
• Apollo Group’s University of Phoenix delivers a quality education that employers value. University of Phoenix invests significantly in its students’ education and student services. Education and instructional spending is its highest category of expense. Learning outcomes, measured by third-party testing companies, demonstrate students’ accomplishments – University of Phoenix students typically enter with lower average assessment scores than the national average but substantially close that gap by their senior year. In the last year alone, University of Phoenix produced 90,000 graduates, and many of the University’s alumni are successfully employed in companies throughout the U.S. in senior level positions within prominent organizations.
• Apollo Group and University of Phoenix are taking a leadership role in promoting and preserving a culture of accountability, transparency, and compliance. University of Phoenix has committed to important new student protections, including a financial literacy program to promote responsible borrowing and a free orientation program for less-experienced students to help them experience the rigors of college-level work, before they enroll and take on the burden of student debt. The University is also eliminating enrollment factors as a component of its counselors’ evaluation and compensation.

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I think it is time to start recognizing lead generation companies, individuals, or groups that take initiative to make the industry a better place.

It is unfortunate, but the fact is there are companies in every vertical that use unethical tactics to make a quick buck. These companies typically go nameless, because frankly put, they know how to work the system so that they go unnoticed beyond simply having poor quality leads. If you are a lead buyer, you are probably working with one directly or indirectly. Most people do not have the way or means to out these companies publicly. Plus, unless you are an insider you have no real proof that they are intentionally trying to scam people, because it is so easy to chalk it up to a mistake. This means we are stuck leaving Karma to police our industry and trust me I believe in Karma, but in most cases Karma is not our most timely option. With that said,  what I think we can do is formulate a way to recognize people or companies that make an honest difference in our space. Companies/people that don’t simply drive quality leads or provide an excellent software, but they make strives to better our industry or better represent our industry to the public.

The TARGUSinfo Lead Quality Summit (now called the Interactive Insights Summit) used to, and maybe still does, recognize companies with the “Online Marketing Excellence Award”. It was never clear to me how these winning companies were determined, but nonetheless there was an award recognizing top lead gen companies. I think the time as come to create an award that takes it beyond “marketing excellence” and includes attributes like breakthrough research results, product development that makes an impact on the ethical standards for the industry, or publications that promote the greater good of the industry and high ethical standards.

Let anyone submit entries for the award, but then narrow them down for votes by a committee.

By recognizing the truly ethical companies or people I think it helps raise the standards of the entire industry. Regarding the industries scam artists, I would love to relaunch my old forum and let people out who every they wish, but I first need to speak to an attorney to insure I am not liable for the claims of others. (If anyone attorneys want to offer up their time or consultations for free, let me know via the contact form).

I would love to see the LeadsCouncil take lead on this initiative, however maybe I will take a stab at getting the ball rolling.

What do you think? Good idea? Bad Idea? Who cares?

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Released today was another report revolving around the EDU lead generation space. This report, fortunately, will not send stocks plummeting or law firms scrambling like the GAO report, but instead gives a little insight into the demographics of people filling out lead gen forms.

The study, which was released today, was undertaken by EduDirectReponse and took a closer look into 1000 random generated edu leads. The study took general advertising campaigns (none degree specific messaging) and syndicated the campaigns across multiple channels including SEM, Email, and Display. The campaigns covered the entire United States and produced at least one lead in every State.

Here are some of the take-aways from the study:

1. More females than males are interested in online classes.
2. Over 60% of prospective online college students have a High School degree or have at one
time in the past attended college.
3. Business and Health Care are the two most popular majors for prospective online college
students.
4. 90% of prospective students want additional financial aid information.
5. Over 80% of prospective students want to receive a college related newsletter.
6. Prospective students do not mind entering their email address and other personal
information but feel that their phone number is the most intrusive piece of data they give.

Take a closer look at all the results of the report by downloading the PDF here.

I want to take notice of all the reports and data that has been released over the last year. Granted, this last GAO report was not all that great for a number of reasons, most importantly it was statistically irrelevant, but reports from Leads360, LeadQual and now EduDirectResponse have been shedding light on areas that have never before been made public. The more reports like these are made available the more insight will be available to our industry and subsequently erase the unknowns of the industry, which will make our industry more legitimate and less like some kind of voodoo. With that said, I encourage organizations like the LeadCouncil, CCA and companies like the ones I previously mentioned to continue to release these types of reports. It is good for the industry.

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There are only a few lead generation conferences, let alone ones that are worth attending. Sure there are a number of conferences that overlap into the lead gen space by focusing on certain eliminates of lead generation, but in reality there are only two specific lead generation conferences: LeadsCon and TARGUSinfo’s Interactive Insights Summit (formally the Lead Quality Summit).

The first lead generation conference was originated by TARGUSinfo and continues to be a great event for both lead buyers and lead sellers to attend. The conference started out as a smaller more intimate meeting of industry professionals and continues to be a focused on quality conversations and networking. While most conferences grow to a size where their value begins to diminish (i.e. AdTech, Affiliate Summit, etc) the TARGUSinfo event has been able to continue to provide quality content to all types of lead buyers by remaining very intimate.

Last week TARGUSinfo released the agenda for this years event and as usual the content looks excellent. I guess I may be a little biased because they have asked me to moderate a the first session in the EDU track titled “Hard and Soft Costs of Lead Management”. Take a look at the rest of the agenda here at the TARGUSinfo site.

The show is October 13th & 14th, but it doesn’t hurt to sign up now and receive the early bird special of $400.

Hope to see you there.

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Today, QuinStreet announced their fiscal 4th quarter earnings as well as their fiscal year end earnings. The lead generation leader reported a 31% YOY growth in total revenue and a 76% YOY revenue growth in the financial services vertical.

QuinStreet CEO attributed much of the growth to the “flight to quality” in the EDU vertical due to all the regulatory crack down on the vertical.

“Financial Services continues to grow rapidly and is now our largest vertical. Education client demand is at record levels as we are benefiting from a ‘flight to quality’ driven by regulatory scrutiny and change, and as clients anticipate and adapt to new higher standards”

Even more interesting it was acquisition price of insurance.com that was mentioned on the conference call. QuinStreet announced that they purchased the domain, remember they let go every employee immediately after the purchase, so this purchase price was only for the domain, for $36.5 million.

insurance.com = $36.5 Million

I believe this goes down as the most expensive domain purchase in history.

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I received a nice little email today reminding me that the LG Technologies VS. Shin, Smith, Diana, LeadPoint and others has not been completely settled. The last update was that Shin switched his plea to guilty and has been ordered to pay back any monies due to LG Technologies.  This left the other defendants still in question.

As of the 5th of August 2010 and according to the Riverside County Court House the charges against Edward Shin, Karen Shin, LP Services, LLC, Chris Smith and Iris Sunwoo have been dismissed. According to the emailer LG Technologies and the defendants came to a settlement agreement. The details are unknown.

Left out from the dismissals, however, were LeadPoint, Marc Diana, Breakwater Ventures and Breakwater Ventures II. It is unknown whether or not these parties will come to terms with a settlement agreement as well or continue to be prosecuted by LG Technologies.

Additionally I am not sure if this settlement with Shin has anything to do with the courts order to repay LG Technologies. I will leave the speculations up to you. Regardless, it seems as though one of the largest lead generation scandals is coming to an end. We will have to wait and see what the outcome is for the remaining parties in the case.

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The United States Government Accountability Office (GAO) sent out undercover applicants to 15 different schools across the country. These applicants uncovered numerous deceptive and fraudulent tactics used by the schools they applied with. The statistically irrelevant information sent stocks declining and lawyers spinning. No longer then two days after the document was leaked two separate Law Offices sent out press releases (here and here) stating that they will begin an Investigation on behalf of EDMC shareholders to find out if there were any possible breaches of fiduciary duty or other violations of the law.

EDMC stock took a dive to a new 5 year low of $14.92 while others also took large dips. What exactly did the report say?  Let take a closer look:

Here are four specific issues that the GAO report listed:

Fraudulent, Deceptive, and Otherwise Questionable Practices
Certificate Program – California  Undercover applicant was encouraged by a college representative to
change federal aid forms to falsely increase the number of dependents in the household in order to qualify for grants.

Associate’s Degree – Florida Undercover applicant was falsely told that the college was accredited by the same organization that accredits Harvard and the University of Florida.

Certificate Program – Washington, D.C. Admissions representative said that barbers can earn up to $150,000 to $250,000 a year, an exceptional figure for the industry. The Bureau of Labor Statistics reports that 90 percent of barbers make less than $43,000 a year.

Certificate Program – Florida  Admission representative told an undercover applicant that student loans were not like a car payment and that no one would “come after” the applicant if she did not pay back her loans.

The report also goes into the call practices of the schools they inquired with. I find this portion of the report interesting, because of what other studies have shown about the amount of call attempts schools typically make on a lead.

According to the GAO report:

I find these numbers questionable. They simply don’t seem to add up to what normally happens. Yes, schools call the leads within 5 minutes. Yes, they call leads multiple times a day if they can’t get a hold of them. Looking at these numbers leads me to suggest that the applicants filled out as many forms as possible. The report clearly states that at least one applicant filled out forms on two different portal sites.

“Two fictitious prospective students expressed interest
in a culinary arts certificate, one on Web site A and one on Web site B.
Two other prospective students expressed interest in a bachelor’s in
business administration degree, one on each Web site.”

Additionally, these numbers included counts whereby the GAO researched the sources of calls that did not leave messages. To me this sounds like they were simply fishing for as many calls as possible and frankly a typical applicants simply do not do this. Not only did they sit around counting calls, but as the above statement claims, they filled out forms on multiple websites.

Clearly this report is not statistically relevant, however still uncovered a number of questionable activities that need to be addressed. If you have not had a chance read the GAO report here it is for your review. Download Report

To get a really interesting point of view, one the supports the for-profit industry and articulates the view far better then I ever would, take a look at the InterEd briefings. I also recommend taking a look at the comparison analysis that InterEd completed which shows how significantly higher the tax burden is from traditional University versus for-profit schools.

What are your thoughts about the report? Does the GAO need to perform a complete and detailed analysis on the industry, rather then half complete report?

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