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I have seen it many times over the past few years. Brokers finally realizing that they need to focus on the Internet for their future business. Many of them assume Internet leads to be the best option to receive instant returns. With that in mind, these brokers end up buying leads from the next provider who calls. These actions ultimately lead to failure or a major loss in revenue for the company. With that in mind I wanted to pass along a few steps that you must complete if you want to decrease the risks of buying Internet leads.
- Do your homework!!- You must, I repeat you must do your homework. Jumping into buying mortgage leads without completing any research is extremely risky. The great benefit you have today is that there are some really great resources to get you started. I suggest checking out Better Closer, Bloodhound Realty, Gitomer, and Trusted Advisor. These sites will get you thinking about the sales processes that you need to have in place.
- Set realistic expectations for yourself and your business.- While doing your homework and research you will need to realize what realistic expectations are. Transitioning into buying leads is not easy and there is a good chance it is going to take a few months to see a real return from your investments. Be prepared to let some people go that do not produce and also know that people are going to quite because they can’t accept the change. Going from networking amongst friends and family to making 150+ dials a day is a transition only some can make. People quitting or not producing doesn’t mean you are making a bad decision. It means you need to hire the right people and train them correctly. Lastly, don’t expect to convert 10% of the leads into funded loans. Get real!! Of the leads purchased within the first month you may only convert 1% of them, especially if you don’t follow my tips.
- Put a Lead Management system in place before you begin purchasing leads- There are a number of excellent CRM’s in the industry. Here are a few you must check out: Leads360, Icosales, Lead Mailbox, and LeadROI. Test every one of them! It is possible that from your research you may have a better idea of what you want your best practices to be like. Try to evaluate which system will best suites that model. Each one of these CRM’s has excellent employees that can help you sharpen your model and set you in the right direction if needed.
A lead management system is not something you can skip out on. If you are going to buy leads you must be able to track the success of the leads and your employees. If you could only implement one of these tips, this would be the one I would recommend as the most important. Depending on the CRM, setup fees are usually around $500 and monthly user fees range between $40 and $60. The benefits far out way the costs. - Buy good leads- The problem here is that it is easier said then done. When buying leads you again will have to engage in some serious research and due diligence. Visit all the mortgage forums on the Internet and of course join the Lead Critic Forum. There are years of lead buying experience within the forum and you will be able to receive some solid advice.
Review what products you sell most and there guidelines. Make sure that the lead filters you apply to your leads fall inline the underwriting guidelines of your most popular loans. Examine the mortgage marketplace in the area where you plan to purchase leads. You may need to adjust LTV filters based on the market in that area or the states guidelines.
When choosing lead providers I recommend buying leads from providers that have full control of their marketing creative. To be clearer, make sure that the provider is not buying data from a third party source or buying from an affiliate. When lead companies buy from affiliates they increase the risk of duplicates, leads that come from false marketing or incentive based marketing. Initially you will want to eliminate as much risk a possible. Once you have become settled into the market you can reach out and test more riskier providers if you so choose.
In conclusion if you plan on buying leads, please realize that this is not a quick fix for a business in trouble. However with the proper planning and realistic expectations you too can succeed with a lead buying model. Good luck.
4 Comments
GREAT post. #2 is so key to this process. As an insider to this industry, it is all too often that I speak with someone that thinks they should be able to easily see 7%, 9%, 15%+ conversion ratios. This is an industry where 3% is a successful and profitable conversion ratio. This is fed, of course, by the unscrupulous lead companies that throw these rates around like shady brokers throw out teaser rates.
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Does anyone on here generate a significant number of their own leads on owned and operated web sites? What kind of difference do you see in conversion on these types of leads as opposed to those from “store bought” leads. I don’t mean a few people who seek out your corporate site. I am thinking more like sites where you do your own paid search marketing or something similar.
We experimented with that a couple years ago but at the time we were not in enough states to make it work well. We do have a couple of exclusive relationships with sites operated by professional groups and I know we are the only ones who get those leads (though the people can apply elsewhere of course). We probably close around 6 or 7% of these, however admittedly our lead management could be improved a bit. I suspect we could get very close to 10% on these.
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Ajiny,
The conversions on web generated leads via our sites and landing pages range the 10% to 20% . If you are looking for more specific tips check out the Morinsight post on creating a good CPC campaign and also join the forum and post a topic on the subject and I think you find some excellent feedback.
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Good post Lead Critic. I’m amazed after all these years some shops/brokers are not doing this already.
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