Maybe this is a dumb question, but the results could make these easier on your life and at the same time possibly worse.
LowerMyBills some time ago decided to no longer except returns and instead began to bake in the return rate into their prices, supposedly. This is some thing I did frequently as a lead buyer because it made my life a whole lot easier, but was it the right decision? If you buy from multiple sources you know each provider expects you to return the leads differently and within different time frames. This can be very time consuming and even a little frustrating. Requesting a percentage of the price be reduced eliminates much of that pain, however it also reduce much of the feedback that the lead providers will ever receive.
In the case of LMB, I am assuming that with out the return data they are receiving little to no feedback. There are only a handful of companies that send any data back to their partners so in my experience it doesn’t seem that far off to make that assumptions. Without feedback lead providers are working in the dark. I call it using the “force”. They all know what typically performs well, but quality can very at times and totally drop off from campaigns that have typically performed well. Without the feedback, negative or positive, marketers are using the force until the results or feedback becomes overwhelming poor and it many times is too late.
I suggestion is that baking in return rates is a good idea, but should not replace sending back the data. It should only allow you to format the data in a way that makes it easy for you to aggregate and send to the providers. Now they have to deal with the format, so long as you are providing the correct data points.
Keep that in mind. Baking in the return rate does not let you off the hook for sending feedback.
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I’ve always been of the opinion that enabling real-time returns is a valuable exchange for both the lead buyer and the lead provider. Allowing lead buyers to return leads brings a level of transparency and legitimacy to the lead generation practices of lead providers. If leads can be returned in real-time, then the inefficiencies of the past, i.e. returning within 5 days on a pre-formated spreadsheet, ala LMB, become a moot point. The buyer benefits from getting consistent lead quality and the lead provider gets data back that tells them which campaigns are performing and which ones are not.
Lead providers can also mitigate the loss in revenue by remonetizing the returned data through other channels or validating relevant data points and reselling it for a lower cost with the appropriate caveats.
Theoretically, it all paints a beautiful picture. But can it be so?
There was a time that LMB allowed returns, as we mention above. Some would say those days were the renaissance of the mortgage lead business. Everyone was happy for a while. Leads were bought, they were returned and every one was minting money. Sure it was hard on guys like you Critic, but it was a small price to pay for insane revenues at your company, limos with stocked bars, and dinners at Morton’s.
It seems to be clear based on the recent news of the economic crisis that when people are making a lot of money, problems are overlooked, and inefficiencies are often tolerated. I think the Financial Services industry is the poster child of that notion. Of course we, and by we I mean the lead management solution providers have been working toward introducing new innovations that reduces the points of friction and inefficiencies in sales process and customer relationship management, but has it been enough?
Back in the golden years (2004-2007) we had plenty of discussions with lead providers about doing real-time returns, but there was resistance because there was an incremental revenue to be earned from the broker who forgot to return their leads and automated returns threatened that paradigm. There was also the belief that brokers/lenders would abuse the real-time returns and that would impact the lead provider’s bottom line. There was some emphasis on getting conversion data back, but no one really pushed for it, we all just did a lot of talking. I’ve always been of the belief that accepting real-time returns is the first step to working with the lead buyer to extract more data like conversion data. But, because there was no real way to validate a return, it would make it difficult to manage the potential for abuse by the lead buyer. Lead management was and is, to a large extent, still focused on the needs of the lead buyer.
As I see it, the role of the lead management solution is not just to protect the interest of the lead buyer, but also to ensure the lead provider that not only are their leads are being delivered to their clients, but return data is accurate and validated, return abuse is managed, and conversion data is accurate. Of course that goes with the understanding that this is only possible with the explicit approval of the lead buyer on a provider by provider basis.
We all agree that to a large extent, the protection of interest in lead management is heavily weighted in the lead buyer’s favor. That’s mainly due to LMS’ responsibility to house, protect, encrypt, back up and secure their data. We do that and will continue to do that. However, I think we should also consider how we can help lead providers feel more comfortable with real-time returns, manage and mitigate abuse by the lead buyer, and help them bring back the value in the Internet lead.
If real-time lead returns are allowed by lead providers, I believe it will influence lead quality positively and that should influence the value and price of leads, right? There are still a lot of buyers that I come across who are willing to pay the price points of 2004-2006 for a lead, but only if that lead meets some very reasonable data integrity criteria.
Lead buyers don’t want to get screwed, and many of them think that lead providers / aggregators have screwed them over the past year or more. However, I have also come across many lead providers and aggregators who I believe have integrity and are focused on following sound lead generation practices. I try to point them out clients whenever I can.
The bottom line is that we need to work together to elevate the technology to minimize the risk to the buyer, restore faith in the Internet lead industry, and increase the value of the one product that fuels the entire chain ‘THE LEAD’. Maybe revisiting the idea lead returns is the first step toward achieving these goals.
I am comfortable with this method provided an assumed return percentage is used. When the assumed rate is exceeded regularly the price is revisited.
With the providers that we have this arrangement with we do provide data (when they ask for it) back to them on closed loans and also invalids. We always talk about feedback when it comes to returns but that’s only half the picture.
I didn’t read all of Raj’s novel but from what I did gather I agree that a tech solution for returns might make me lean back towards wanting to return leads…right now with as many partners as we have it is not easy…
Print out my novel, make some hot cocoa, start the fireplace and curl up next to it for a good long read.
will do.
The broader topic here is about providing milestone data (contact, application and conversion information) as well as return information to lead providers.
Leads360 has the ability to do this in real-time via a web service. We do so for our preferred partners providing that they get explicit permission from our mutual clients.
Although we have this in place and despite the vociferous rhetoric from lead providers that they want this information, we are only doing it for a handful of clients and a few innovative lead providers.
Why is this?
My belief is that many lead providers have little ability to use real-time data. I also know that the majority of lead providers still need to do a better job of convincing buyers that their intentions with regards to using this data is honorable.
Agreed Nick.
LeadROI also the ability to post back key metric data and to send back real-time returns. Hence my post. We built this feature almost a year ago when we were working with the now defunct Root Markets. I agree with you that there are limitations that lead providers have to utilize and manage data from the LMS’. There needs to be an intermediary that can manage this information for them. I think an Exchange or similar concept is a great platform to provide these intermediary services to the lead provider. Now we just need to fix the business model of the Exchanges.
Ah the golden years. Where the hell is my limo driver ? Next time we get back to the compound I’m removing ALL vodka from the limo bar. Scoundrels !
I don’t agree.
It is not about handling real time data. That is simple in many cases, but it does take integration time and that if any is the only thing that may be slowing the process. 360 and ROI only just opened this feedback a month or two ago. It will naturally take time for providers to integrate, none the less it should be a top priority.
There does not need to be an intermediary for this process. That seems pointless. Simply adding a step to ad a step is not necessary.
Lead buying best practice dictates a flat rate returns policy for many reasons.
Step 1: Buy leads for 30 days and review the returns with your lead provider.
Step 2: Agree on a flat rate returns policy and time frame for when to return bad lead files/analytics.
Step 3: Review the returns monthly and negotiate pricing with your lead providers quarterly.
This policy negates the need for constant returns, real time returns and some of the problems associated with managing multiple lead provider accounts.
ANALYTICS: Any LMS system allows you to export leads, so lead providers can get batch files only when they need them. (Most providers during 04’-07’asked for the quarterly or monthly data depending on projects they were working on).
REAL TIME OR NOT: Real time returns have a flaw. Unless you spend time properly setting up your LMS for real time returns (IF it allows you to) you will have problems.
Real time returns puts the individual who is unfamiliar with each lead providers return policy in charge of returns and takes away from what should be the marketing team or managers job.
Returns should be determined by a person familiar with each lead provider and their respective returns policies otherwise you run the risk of being flagged and known as the account that returns everything.
Returning more than what should be places a large burden on your account exec and makes you look bad.
The intermediary brings technology infrastructure to those lead providers that do not have sophisticated systems to manage that level of chatter between buyer and seller. Believe me, there are plenty providers who know how to generate leads, but their distribution systems are not up to par with the bigger shops. The LMBs and LendingTree’s of the world are not the issue. It’s the other players and the newbies that come into the space that need the intermediary.
Noel,
All good points. Your plan basically calls for “Return Policy Standardization”. Keep in mind, I just talked about the benefits and issues of returns in my novella. I didn’t talk about how it would be technically implemented. That’s the secret sauce I can’t share.
Raj, I’m not sure it’s standardization I’m speaking of, I understand you are selling a technology that you’ve not let out of the bag yet, but I really don’t believe that any lead provider or buyer out there needs some other fee/service to figure out how to send leads/negiotiate price points with lead providers… Next thing you know, we’ll hear that Sparkoom is the savior of analytics when anyone can print out a credit pull report or closed loan/opened loan/contact rate report from any number of sources. The real question is when did everyone become lazy or refuse to use the tools at hand.
If you think about it everyone from providers to LMS’s companies to buyers complain that “No one does what they’re supposed to”. Yet everybody complaines about a bad economy and poor client base reception. Would you pay more for services in a economic depresssion for “Best Practices” that occur every day in well run organizations regardless of LMS/Provider/Buyer.? THOUGHTS????
Okay so let it be known that i don’t have the experience that some of the commentators do in lead management and lead distribution, but i do have the experience in taking leads. I started taking leads with get smart in 99/00 and continued taking leads with company’s like LMB, LT, Adchemy ext for the next 8 years. Everyone of them had a different return policy and all of them moved in to the reduced pricing to offset the returns. I can see why they did this regardless of the profits its a big undertaking to deal with lead return. Most of the company’s mentioned had a call staff that would actually call the returned leads to verify if they were good or not which is expensive not to mention time consuming. Now that being said here is my observation of lead returns, i hated having to return leads it was a pain to put them in a spreadsheet send them over, wait for two weeks till you received your next bill and cross check what were credited or not. My time is money so the less time i had to deal with credits allowed me more time to manage staff and oversee production which was my strong suit and allowed profits to increase. Now that im out of the loan biz and onto the lead biz i see the need for some form of communication on leads with the individuals who are working them. Im all about creating a good product that works, allows for a high contact ratio and high closing as well. There is no way to achieve high ratios without working with your customers and understanding how your leads are performing, bad info, didn’t apply, great lead ext. There is no perfect world in leads and never can be but i think there is a way to find a balance between return and reduction in price. We haven’t decided on the returns yet at my company as we are torn on the best method get feed back on our product Either way i know communication is the key to success of any product.
This industry knows how to talk but not do. With all these strong — and long — opinions, why isn’t there more change in this space?
Horses die in the desert, it’s that simple.
No,
Sometimes action requires research, conversation, trial and error, discussions with partners, financial modeling, and ultimately a commitment to allocate resources, both financial and human to these types of projects. I believe all the LMS providers are committed to bringing relevanct to the process of improving the entire lead life-cycle and their constant involvement and attempt to be part of the discourse should evidence that. I think to say that we’re not or to imply that we’re not with clever analogies is simply off base. I think these conversations are healthy and I know that there is work being done by all the players to improve the process. Doing as Anony-mouse points out, requires more than just words, that I agree with. But this dialogue, the conferences we are meeting at and sharing ideas and listening to each other’s visions is just part of it. It has always been a part of it and it has in many cases been the catalyst for innovation. So, yes Mouse there is a lot of talk, and there’s a lot of and lab testing that’s going on. But in my opinion, the only thing you should be concerned about is whether our lab tests are being conducted on mice. I would seriously watch my back if I were you.
I like this discussion (and, the novella!) at least as much as the article that preceded it. The discounted price approach of LMB makes things so much simpler at the price of removing ALL feedback from the loop.
However, I have found that in most instances our customer base is not interested in spending time reviewing the other points that we’d be looking for in lead returns. The focus is on closing rate, and little else. In fact, I have even found that many of the customers using CRM’s are not pulling enough or the kind of reports that would aid both themselves in determining where to focus their efforts and us in driving up lead quality. Unfortunately, it really does leave us spending too much time divining what is working, best.