Today a new lead buyer and member of the LeadCritic Forum posted the few questions regarding buying leads and I thought it could benefit the gentleman who asked the questions and also help others who may have the same or similar questions by re-posting the them here and maybe some of you can give your two cents as well.
Here are the questions that he posted:
“I am a mortgage broker with no experience with Internet leads. Rather then distribute to my employees, I want to test to make sure these things really work. What is a good place to start with an investment of $5000? Here are my questions:
1. What should I expect from a ROI perspective?
2. Should I go to one lead source or multiple for my first investment?
3. What type of leads should I buy, live transfers, verified, double verified, triggers?
4. What kind of app rate or close rate should I expect?
5. I only deal in CA, what lead(s) provider(s) should I use?
6. What kind of introduction pitch do you use for Internet leads or live transfer leads?
7. Is anyone using Internet leads as their only source?”
Here is my response:
Excellent questions!
In my opinion you are already on the right track. The biggest mistake a broker can make is jumping into the lead buying game without building up their knowledge base and asking these types of questions.
Here are my opinions and I will try to make them fairly brief because this could turn into a thesis paper.
First, figure out what you do best. Example: You may be able to turn and burn conventional loans that are between 70%-80% LTV and have credit scores 680 and above. From there insist from the lead provider/s that your receive leads within those filters.
Drive a hard bargain with regards to pricing. I would shoot for a $30-$35 price point. They will be a little resistant depending on the filters you request and the fact that you will only be buying leads from CA, which is heavily saturated and has high demand for leads.
Being that the CA market is saturated and there are a ton of competitors, your realistic conversions will be fairly low to start. Possibly in the 1%-2% arena.
You will need to call these leads at least three times a day and also follow up with emails. Do not give up on your leads unless they tell you F*** off. I came across an email today that was sent by a lead provider that recommended calling a lead twice, however I recommend calling it morning, noon, and night until your find the best time to reach the consumer. Check out this serious of posts
Answers to your specific questions:
1. ROI goal should be at least 300%
2. This is an interesting question and could go either way. I hate putting all my eggs in one basket but lead providers tend to give priority to people who fall into a few different categories. 1. They are in multiple states 2. They receive good volume 3. They have high price point. Since you will be buying 3-5 leads a day, I think you may want try one lead provider. That’s a tough one though.
3.Don’t waste your time with the triggers. Live transfers are a decent option, however I would stick with the typical Internet leads.
4. You continue to ask what you should expect for certain ratios and it’s all specific to your sales process, determination, and drive. If you don’t currently have a set work schedule, make one. Tell your wife or girlfriend that you will be putting in more time at work for the next few months. If you want to succeed you are going to have to put the time in. Receiving the lead is only the beginning.
5. I have had good success with LowLender (Affiliate Media Network) and would recommend them to start. This is a unique company that aggregates leads from multiple source as well as generates their own. I normally never recommend buying leads from a company that use affiliates to generate leads, but they are different story.
5. Be natural and professional. Find out their needs and give them what they want.
6. I buy 85% Internet leads and 15% telemarketed leads.
Good luck. Don’t expect have instant success, but if you make the effort you will see a return. Put yourself in the shoes of a person that is going online for mortgage information. Call them morning, noon, and night until you find the best time to reach them.
Do some homework, check out www.bettercloser.com
If you are serious about this you must invest in a lead management system. Check Kaleidico, leads360, leadROI, and lead mailbox. If you plan on investing $5,000, I would highly recommend allocating a portion of that to a lead management software. You will increase your ROI and overall chances of success with an LMS.
Good luck.
Anybody have some insight for this gentleman? Also please correct me if expectations I stated are off base.
.
.
.
Subscribe to the blog and receive email notification when of new article is posted:
Lead Critic is right on and covers your questions well with a lot of resources that you will want to check out, but here are a couple of preparation steps you may not have thought about:
I talk to our clients about “Internet Lead Splash.” If you have ever been to a swimming pool with kids around you know that as much water ends up on the deck of the pool as inside the pool. Same with Internet leads. As you start splashing around in this market your name will go in front of more consumers faster than you have ever imagined. Lead providers will start telling customers you will be contacting them (e.g., lead providers like LendingTree and LowerMyBills that show your logo or name at the end of a Web submission) or you start hitting the telephones and calling hundreds of people and leaving your name.
This activity causes consumers to splash out of your primary real-time, direct from lead provider channel. Where do they go? They are savvy Internet users–they go back to the Internet–they splash out on the pool deck (the public Internet). Why? To find you because they lost your number, to check out your legitimacy, to research mortgages and prepare themselves before they answer the telephone with that scary, highly motivated loan officer that keeps calling.
So, what am I suggesting? Build some simple ways to catch this splash and build trust online. This WILL increase your conversion rate on the leads you buy!
Make sure your mortgage company and you personally can be found in a simple Google search of your name(s). Have a professional looking website (really this isn’t harder than a little elbow grease and MS Frontpage or one of the several providers that will build one cheap). That site should tell about you, provide detailed contact and location information (including physical address), and of course licensing.
Start a “value first” blog. This is the simplest and fastest way to create a valuable catch basin for Internet consumer splash–some great examples include: http://www.blownmortgage.com and http://www.themortgagereports.com. Tell them how to work with mortgage loan officers, what to expect, and tips on the market and products. Train them to be a better client.
Most important of all these steps: Whether you are a loan officer in a big mortgage company or an independent broker–build you own, personal brand on the Internet!
Good luck! This can be a very lucrative business model. Just lay a solid foundation–prepare to win–attitude, knowledge, and intensity of execution.
[Reply]
Regardless of the lead provider that you use, there are two key questions that you need to ask them. 1) Do they participate in Incentivized marketing? 2) Do they participate in Co-Registration marketing?
If the lead company says that they do allow that type of marketing, or if the sales rep does not know if they do, then turn and run. If you don’t know what these marketing strategies are, then that would be a great future and quick post for Lead Critic.
[Reply]
Wow — I am going to add this link to our sites so new clients understand what to expect and what it takes to get that type of return on leads.
Very well done.
Keep up the good work.
[Reply]
A quick question on ROI. Do you mean by at least a 300% ROI, that if someone spends $5000 on leads, they should NET $15000 or GROSS $15000 off of those leads?
[Reply]
At the least, gross. Net return of 300% would be good to shoot for though. I see that with many of my providers.
[Reply]
I have been in the mortgage business for 7 years and currently work for a large national broker that uses leads 360 and our lead sources are mostly LMB’s, triggers and live lead transfers with a few mailers.
My question is similar to the guy above. I plan on leaving the company I’m currently with and go back and work from home (which I did previously). I also plan on spending close to $5,000.00 to set up the leads.
Here are my questions-
1.How would you structure your lead buying for someone who plans on doing the work themselves and not with a team??
2.Does a lead management platform like Lead 360 or Kaleidico make sense for 1 person??
3. How would you structure your calling efforts since only 1 person would be calling as opposed to multiple people??
Thanks for your help-
[Reply]