Finding the right lead source has always been a problem. It often entails receiving a multitude of calls from sales people pitching the best quality for the cheapest price. You then are forced to use your gut on whether or not to make a purchase. This isn’t much different then any other purchase. For example your customers, in most cases, do not have the ability to test your product out prior to refinancing, receiving a loan modification or settling their debt. All they have to go off of is the rapport you have built and their belief in your claims.
The good news is that there are some companies that will give you a few free leads to call, but what is this really going to prove? That they can cherry pick their leads really well? Or that out of the 3 or 4 leads you didn’t close any? Frankly, I question this vetting process altogether, but at the same time I understand where taken advantage of buyers are coming from. I was once one of them. I guess if you are simply going to determine whether or not a person filled out a form then maybe this is a good idea. If it goes beyond that, you may be seriously misleading yourself. Maybe you contact all 3 or 4 leads and even close one of the leads. Does the mean the leads are good? Maybe or maybe not.
Here is what I would look into when buying leads from an unknown company.
How old is the company?
How long have they been generating leads?
How long have they been generating leads within our vertical?
Who are the key members of the company and what are the backgrounds? Check Linkedin and pipl.com. Not everything on pipl.com are tied to the person you are searching, however you may find something interesting things.
Lastly, follow your gut.
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I disagree that free leads will give you any indication of the overall quality of a purchase. Your point about the lead company picking the leads carefully is part of the issue, but you need to address both the intentions / practices of the lead buyer, as well as the actual quality of the data presented.
I would argue that at the end of the day a quality lead is one that is both likely (i.e. interested) as well as able to close. So, if I give you a few free leads that I have pre-screened to ensure that they are interested in talking to a LO, but I do not stick around (or have the ability to check to ensure that they will actually be able to consummate a transaction); where are you?
We’ve always given our clients the ability to validate the current property value, LTV, liens (dates and lenders), household income, lead score (propensity to close), tax and foreclosure status, area comps, and much more. Our leads include this information automatically, and we have a new tool (available at http://www.RealTAG.com) that allows any lender to automatically validate their leads in 5 seconds from any source.
The bottom line is in this market (and going forward), free or not, you have to be able to close the deal to make it worth even your time.
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Drew,
Maybe I wasn’t being clear.
I think the idea of requesting free leads is NOT a good idea. It is an obviously irrelevant sample size no matter what the results are.
But I see where buyers are coming from when requesting them.
Nonetheless, free leads are pointless.
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Interesting point Drew. I am not familiar with your company RealTag, but it sounds like an interesting concept. You provide your clients with the ability to validate the ltv, tax lien status, etc… Do you allow them to reject the lead if the validation is not up to their spec? For example, if I am only interested in 80-85% LTV and the validation comes back at 86%, am I free to reject your lead? Interesting concept, but does your company actually make money in such an instance?
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Leadtwit,
My company is iLeads.com, (our newest product is RealTAG). To answer your question directly, absolutely we would allow the lead to be rejected.
Since we base our filters on real data (vs. consumer input guesses), we think that we are actually in a better position in terms of rejects. For example if a lead comes back to us as out of spec from a lender, we have the ability to instantly audit the lead to ensure that they are correct. Take that same scenario and add the ability to audit whether the lead has closed prior to being generated (old lead return), or being able to prove your worth to the lender via telling them how many of your leads that month closed.
The bottom line is that while we do add some cost, (sometimes recoverable) to the lead gen process by way of lead rejections, we in turn can make it up by virtually eliminating mistakes or fraud by lenders looking for a free ride.
The good news for lenders is that even if you do not use our leads, our service (www.RealTAG.com) allows you to get the same information in real time for any provider. At that point, you can ask them directly why they would not accept a rejection on a lead that is out of spec.
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