Is the added social security number on a lead worth the extra $10 to $15?
I don’t think so.
I guess to really to answer this question we would need to ask a few questions. What type of person would put their SS# online? Is it someone highly educated in the loan process? Is it someone who knows nothing about the loan process? Is it someone who thinks that if they put their SS# on the form they will receive better service? Is it someone complete oblivious to security issues and have no idea what they are doing? Finally, is it someone more interested in a loan than someone that doesn’t put their SS # on the form?
I would have to argue that the premium or premier lead, that includes a SS #, are no better than the lead without the SS#. We tried this type of leads out and found that they did not convert better than the typical lead. In fact, most of the LO’s that received them found that the borrowers were less savvy and weren’t really aware that we were going to pull their credit. Of course you can argue that a less savvy person is an easier convertible lead, but like I said we did not see a difference in conversions. I also find it interesting that the lead provider will tell you to give these good leads to your top performers. Why would a top performer need a better lead? Our top performers can call out of a phone book and maintain a 3-5% conversion. Well, in our case we followed the advice of the provider and still did not see a difference.
Now some companies are coming out with a Credit Band lead. This is a lead where the credit grade of the lead is verified with Experian or Equifax. The providers will verify that yes this person has a credit score between 680 and 720, and yes this person has Good Credit and then sell you a good credit lead. I like these types of leads because if you are paying a premium for specific credit grade and don’t receive it or the borrower thought it had a 720 but really has a 620, your going to be upset. These Credit Band leads will alleviate these issues. I believe these leads can be sold at a $2 to $3 premium and still have value. However, it really all depends on the mortgage shop of course. You may feel that this is worth nothing because you take all credit types, but for those only buying Good or Excellent credit types this may be the lead for you.
Now back to the Premier leads or SS# leads. Have any of you had more success with these types of leads over the classic leads? If you have had success with the premier leads, was the ROI higher than the classics or lower?
I think you asked the right question, Morinsight, “What type of person would put their SS# online?” It has been my experience that it is typically the consumer that is a little more on the “desperate,” side of the need for a loan. For example, the percentage of consumers on the sub-prime side far outpaces those on the prime side. So, if your bread and butter are the Fair and Poor consumers, this may be an effective way to gain marketing within your niche.
But my experience is that typically that the premium paid for the leads with Socials does not carry an ROI that justifies the price. A perfect demonstration of this would be in your previous entry entitled, “Conversions in the Mist.”
The sole, universal exception to this tends to be for the select few companies that can leverage ADE’s (automated decisioning engines) to automatically pre-qualify and render decisions in minutes on consumers with the SSN’s; typically in the home equity market. This way, the Loan Officers are calling to schedule a loan closing, not to try to convert a lead. But there are only a handful of companies out there that have this technology. It is not inexpensive.
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I have used both products and have recently decided to terminate a realtionship with the provider you are speaking of. A good sales team/sales management philosophy in place gets you the SSN# anyhow. Why pay premuium for it. I believe this is better suited to a LO originator style shop that doesn’t have a suitabel sales staff in place. Having the SSN# might give them the feel, that they are a player.
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