Just For Fun:

Not sure if you have seen any of Kevin Nalts videos, but you should check them out. Here is a more recent video about the “Enlightened Stupid Marketer”

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I just feel like going off the topic of leads for a post and just give my two cents and appreciation for companies that understand the importance of their corporate culture. And I guess you can easily tie together your culture to the success of your sales team and company overall. We all know the story about Southwest and culture they breed, but an excellent article on corporate culture on the Harvard Business Review website/blog – which Jeff Solomon of Leads360 tipped me off too  through his blog about a year ago and has become my favorite blog to read – covers the affects of a great corporate culture.

The problem is that a culture that invests energy into the employees happiness, health and personal growth does not usually happen on its own, but rather it takes dedication, time and sometimes money to create. That investment, however, returns a huge ROI! Yes, increased sales!

So, in the mix all that is “important” don’t forget to foster an amazing corporate culture. This means possibly asking for help too.

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A company that does not get mentioned here as frequently as they probably should, for what ever reason, released their bi-annual benchmark study last week. I was going to cover it as soon as it came out, but I was actually going to make an effort to try and acquire the study, but did not have any luck, so this post isn’t as timely as I would have liked, but better late then never.

That said, many of you have probably already seen the press release, if not you can download it here, MortgageBot Benchmark Study. First, I love the fact that MortgageBot puts the time and effort into putting a report like this together for their clients. They have the data, so why not share it?

The report takes a look at a number of key statistics like demographic profiles, average approval rates and loan abandonment rates. Here is some of their public findings:

--  The online channel continues to generate more loans. Approximately 40
    percent of lenders take more than 25 percent of their applications via the
    online channel -- up from only one percent at the start of the decade.

--  More and more borrowers prefer the online channel. During 2008, the
    number of people completing online mortgage applications increased in every
    demographic category from 30 to 69 years of age. The "Gen X" demographic
    continued to outperform other groups, with nearly one in three of all
    online mortgage applications coming from adults in the 30 to 39-year-old
    bracket.

--  Online borrowers' household income is increasing. Despite a
    challenging economy in 2008, the household income of online borrowers rose
    to $93,717 -- an increase of 10 percent compared to 2006.

--  Today's online borrowers have increasingly solid credit ratings. The
    average credit score of online borrowers continues to climb -- rising from
    an average of 709 in 2006 to 732 in 2008.

I highlighted some very interesting points. Let me get off track just a bit. Over the last month I had a number of conversations regarding the mortgage industry and the statement that was being repeated by the different industry players was that mortgage seemed to be making a little come back. What does that mean? It meant that mortgage lead sales seem to rebounding. And these numbers support those comments, to an extent. It also backs up the fact that no matter how leads are going to be generated online in the future they are going to be generated online. Additionally you are going to have to figure the model out and learn how to work leads properly.

As much as we like to discuss the fact that the consumer is sick of the current process of and receiving 100′s of calls from pushy loan officers the facts remain that more and more people are going online for their mortgage assistance. Sure, the look and process of collecting and distributing mortgage leads may change, but again people will still revert to the Internet for information. Are you ready? Can you efficiently work internet inquiries? If not, you might want to look into it.

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Guest Post By Adrian Huth, friend and “good guy” in the industry.

Allow me to introduce myself…. I am an individual who has been in the lead generation industry going on 10 years.  I have seen the industry involve from the early days of the mortgage boom to the now recent collapse and repositioning to new verticals gaining increasing value such as loan modification and debt consolidation leads. I have seen the evolution of the search engines and SEO marketing and was there in the beginning of cost per click marketing.  I have witnessed how lead generation and lead quality was affected by the rise of the affiliate networks, display advertising, email marketing and incentivized leads.  I saw first hand how all these different types of marketing caused lead buyers to cancel and how some increased closing ratios.  Even back 4 years ago with all these types of lead generation I began to suspect that people are playing a game of buying and selling leads to each other and that everyone is becoming the enemy of the other.  Lead generation has now evolved into screwing people over and this has now become the de facto business model and state of the industry.

Price is Everything, Right?

Now lets say I’m a new lead gen company and I need to get lead buyers on board in order to get my company going.  The problem is I don’t have any trust or unique value propositions of the leads I will sell to the lead buyer.  Well what if I sell my leads less than the competition?  For a lead buyer getting leads for less than the competition must be attractive and a company just called me saying they can get “high quality” “exclusive” leads for less than what I am paying now.  Great so now I have the lead buyers on board and I need to generate leads fo them because they will want a considerable volume.  How can such company generate these leads for less than the competition and keep a profit margin of 80%?

Lets start with affiliate networks.  Hey popular network how bout you run my offer for $20 dollars a payout for a debt consolidation conversion.  Network agrees because most debt offers are at 15 or less and this sounds like a good offer.  But wait the company is selling the leads for $20 exclusive to the lead buyer so how is the company going to make any money.  Simple.  Only fire the pixel on the 4th or 5th time the lead capture form is filled out.  Also, lets double or triple sell the lead at the same time to maximize profit margins.  Then we will scrub 10 to 20% of the leads as well in order to squeeze a little more revenue out in the end.  Brilliant!

Conversion rates unfortunately probably won’t be really good though for the publishers because the same form will convert at only 5% compared to 20% of the offer paying out a $15.  To offset this lets create incentivized offers using ebooks and endorsed downloads by celebrities.  We can pull the offer once a cease and desist letter is given to the lawyers.  Problem solved and our mailers will love it as well because of the higher conversion rates.

Looks like a Debt Lead But Sure Doesn’t Smell Like One!

So I just bought 4000 debt leads and closed only 3 deals can I have my money back?  “Hi, I just received your inquiry that you are interested in consolidating your debt…  What!?  You aren’t interested and only wanted to talk with Oprah!?” I thought the lead company said these leads were generated organically? Unfortunately you paid by wire transfer so the best you can do is cancel and give to your legal department.  How do companies like this stay in business when they know you are going to cancel?  Because they know you are going to cancel and will slash and burn the next client the same way.  As long as new lead buyers fall for the cheaper leads they can count on new clients signing up for a month or two.

How To Protect Yourself

The real victim here is actually the lead aggregator.  These are the lead companies that have signed up lead buyers and instead of generating leads in house they buy posted leads from companies described above.  As most of the clients will cancel because of the quality of the leads the company is left with nothing or at best signing up new lead buyers and canceling the lead contract with said company.  At the end of the day though the damage has been done and for companies in the business for the long haul reputation of the quality of your leads can reverberate shock waves that can be hard to recover.  As for the company selling leads that will never close they don’t care because they will just change the name of the company once no one will buy leads from them anymore.  The following are steps to take to help protect yourself as a lead buyer.

1.  Ask to see landing pages.

This won’t always work as companies will frequently have multiple landing pages and domains in which they are generating leads.

2.  Show me the marketing.

If they say they generate leads from organic search ask to see what keywords the company ranks for in the search engines.  If they claim they generate leads by PPC ask to see some ads that show when certain keywords are typed.

3.  Start small.

Buy a small amount of leads at first and be responsible for checking on the quality from your sales team and if these leads are closing or simply hanging up when you call.

4.  Pay by credit card.

Though there are lead buyers out there that scam the system as well by chargeback every lead order they buy this can give you some reassurance that if a company sells you 100% bogus leads you can take immediate recourse.

5.  Ask for references.

Surely a company can give you the name and phone number of a company which has success in buying leads from them.

6.  Research the ceo and company name in Google. 

Does the company frequently come up in Google on the ripoff report or as a general quality lead business.  How many years has the company been doing business?

7.  Use a lead management system with reporting.

The more accurate the data you have on the source of what deals are closing and what ones do not only helps figure out the best place to spend your money OR more importantly where not to spend your money.

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Carpool Confessions are conversations that take place with Lead Generation professionals on the way to and from work.

I don’t know how many times lead buyers need to see this information, frankly not enough and why I say that because it finally clicked for me too. Maybe it clicks every time I see these types of studies. In fact, I recommend that every Lead Buyer or manager print this white paper up and pin it to your office wall. You should base your companies mantra or mission of this report. Speed is key!

LeadQual put together an excellent white paper that reiterates an older MIT study. It again proves how important it is to call leads within 5 minutes. Stop for a moment, open the white paper here and look at the chart. Notice how your chances of success decrease DRAMATICALLY after the first 5 minutes. People, 5 minutes goes by very fast! Calling leads within 10 minutes will not cut it! Do you even know the average speed to contact is at your company? If not, it should be priority number one to figure out how you are going to find this data and then benchmark it and improve it. I am certain that it is not as fast as you think.

I really liked the chart that showed the success rates by day! It backs up all the times have I had told people to buy leads on the weekend. Weekend leads perform better, period, enough said.

I had the pleasure of speaking with Glenn Houck, Co-Founder of LeadQual on the way to work yesterday and we discussed the white paper and more. If you have buyers struggling with leads, that you don’t think are getting the point, as much as you have told them, have them listen to this call.

Take a listen

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I will be head to Costa Rica for a little R&R for 10 days, so there will obviously be a lack of post over the next week.

In the meantime, feel free to check out my blogroll and the websites of my sponsors.

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Pink Floyd, The Wall Album, “Is there anybody out there?”

I like to often admit that I live in my own little bubble, however is it just me or has the mortgage industry gone quiet. We all know companies have disapeared, gone out of business or changed verticals, but it seems as though there are less conversations happening.

Maybe the conversations have simply changed. Maybe companies are focused on saving their ass they have left no time for further dialog or education. This, to me, would seem to be the most appropriate time to continue and further the conversations.

So is it just me?

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Boy, I can’t believe the year is almost over!

What a year 2008 it was. The mortgage and real estate industry continued to tank. Many of you changed your business model, entered new verticals and switched companies altogether. More companies went out of business and other opened for business for the first time. Mortgage guidelines tightened, banks stopped lending to each other and more recently rates dropped to all time lows, even just for a second.

The first African American was elected President, many are finding new life in new verticals and many were forced to optimze their businesses that were long over due.

It has been an amazing year no matter how you look at it and 2009 will be equally as amazing.

I want to wish you all a happy Holidays and thank you for being a loyal reader despite our possibly differences in opinion and having to put up with my horrible writing skills. Your participation and opinions have added more to this blog then any one post. So, thank you!

Happy Holidays!!

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Wow…back from a long 8 days.

What is labeled a vacation in my household unfortunately does not involve places like the Bahamas, Disneyland or a far away wonderland, but rather involves Banton Rouge Louisiana and the inlaws. Enough said really.

I must premise this by saying that a vacation anywhere is a vacation taken. I know very philosophical, but aside from staying at the inlaws for 8 days, in Baton Rouge, where there is little to do was actually fairly refreshing. Of course the shrimp poboy sandwiches and visits to Tony’s Seafood  didn’t hurt either. Which if you are ever have an urge for cajun food they also make some excellent products that can be purchased here or at your local store. (Sorry for the plug, but it is worth it). It is always nice simply to get away somewhere, although I am hoping next time will be the Bahamas, Disneyland or I would even settle for Sea World down the street.

Nonetheless, I am back from a long week and am looking forward to getting back in to the mix. I hope you all had a great Thanksgiving and you can look forward to more posts in the coming days.

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I know I wrote a piece not too long ago about how we needed the bail-out plan and that the government was being reckless by not approving it.  I have to admit, I am having second thoughts.

I recently had an interesting YouTube video sent my way.  If you haven’t seen it already, check it out here.  This video features Peter Schiff, who according to Wikipedia is the president of Euro Pacific Capital, Inc. a brokerage firm.  I know over the years, the CNBC’s, MSNBC’s and the like have always had him on their shows to represent the “Bear,” point of view; to the point where he earned the nickname, “Dr. Doom.”  Well, it turns out that in 2006 he called the financial mess that we are in now as if he was Nostradamus incarnate.

He spoke in an interview on CNBC in August 2006 (!) about an impending recession in 2007 or 2008 and that it will not last for quarters, but for years.  “The problem,” he said of the US economy is that, “there is too much consumption and borrowing and not enough production and savings.”  So, the American consumer will eventually stop borrowing and consuming and start rebuilding savings, especially when home equity values — which in 2006 he was already calling as artificially inflated — “evaporated.”  He continued to say that you can’t have an economy based on consumption correct the imbalance without a recession.  The recession should not be resisted, it should be embraced because the disease is the debt/finance consumption and the cure is to return to saving and producing, which in his opinion is essentially a recession.

So, are we perpetuating the problem with all of the economic bail out and stimulus bills?  I know I was absolutely for the stimulus plan for the financial sector.  But do we need to continue bailing out companies or will the system right itself when the economy, as Schiff intimates, corrects itself by consumers saving and producing once again?  As he says, “Medicine tastes bad, but you gotta swallow it.”If you have the time, watch the video in its entirety (it is almost 10 minutes long).  It is incredibly interesting to see Dr. Doom be constantly painted as the Chicken Little, (my favorite being by Ben Stein from Ferris Bueller fame saying the financial stocks are the great value and Merril Lynch is a steal at $66.  I hope he didn’t have too much of that stock). Point being, I now think I may have been wrong about the stimulus.  Its interesting considering the market is now rebounding after the bail out of Citi. Rates finally took a nice dip today.  I don’t claim to know why, could be a combination of easing tensions as a result of the Citi bailout as well as news that the government will be buying troubled loans from Fanny/Freddie.  But I think Schiff’s point is extremely powerful.

It is like the fable of the man building the house on sand rather than rock.  If we are not allowing our economy to re-build off of a solid foundation of production and savings – the two most basic concepts of fiscal solvency – then ultimately that foundation will be whisked away when the next wave hits the economy.  What is more, because home values will still not be based on anything real, only fictitious value driven by increased borrowing thereby driving home values back up, I think we may just be setting ourselves up for more and bigger falls.

What are your thoughts?

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