It seems a bit strange that this blog is ostensibly about leads and yet it has taken me until my third post to actually discuss lead generation. Obviously this topic is the focus of the entire blog so we will not go into a huge amount of depth in this post. However, there are several things that are worth understanding as part of a Leads101 course.
Lead capture methods
Internet leads almost always start out as a form on a website; however what really differentiates the lead is who put the form on the site in the first place. What I mean by this is that sometimes the advertiser will host their own form on their own domain, for example if I go to Honda’s website and request a quote then I’ll be presented with a 3 stage form that will give me a quote, take my information and then allow me to select from a handful of Honda dealers. Once I hit submit the lead is sent to the selected dealers as well as Honda corporate office. The lead generator in this case is Honda. On the other hand there are also plenty of companies that all they do is generate leads and sell them to others. A parallel example is autobytel.com who makes money primarily by selling Internet leads to car dealers. On their site it is also possible to request a free quote (I’m not sure why they qualify this offer as “free”) and go through a 4 step process that also ends in one’s data being shared with multiple car dealers.
Another category of lead that is worthy of discussion due to its increasing popularity is the “hot transfer”. This is a lead that is passed to a lead buyer as a phone call and normally involves the hot transfer company buying internet leads, calling the lead from a call center and then transferring customers if they turn out to be a qualified prospect.
You can buy an Internet lead for customers looking for a huge number of different products and services ranging from businesses looking to buy massive multi-million dollar software systems to individual consumers looking for moving companies. However, the sale of Internet leads is certainly more popular in some industries than others. In the business-to-consumer (B2C) sector the industries that generate and buy the most leads are (in descending order of volume); Insurance, Education, Mortgage, Automobile, Debt Solutions.
Lead providers (the companies that generate and sell leads) are usually differentiated only very slightly from one another in terms of what they offer. Some lead providers only service one vertical e.g. mortgage but normally larger lead providers serve multiple verticals. While most lead providers will tell you their leads are high quality, most lead providers use a similar assortment of methods to generate the leads. Ultimately lead providers who generate leads that convert well do one or more of the following:
1. Provide information that helps a consumer decide that they want to be put in touch with someone who can sell them a product or service provider. For example a mortgage lead generated by bankrate.com, where people are going to educate themselves about mortgages is likely to be better than a form on a website that has nothing else to offer other than the form and a marketing message.
2. Request a lot of information from the consumer. The reason being that the lead provider reduces the likelihood that the consumer will complete the form with every additional piece of information collected and thus only the folks that are really serious will fill out the whole thing. A great example of this type of lead provider is LendingTree who asks for 100s of pieces of information in order to match consumers with lenders.
3. Thoroughly analyze whether the leads that they generate convert into a sale or not. Many of the best lead providers will ask their buyers for lead closing data so that they can match closed deals with where and how that lead was generated.
Who are the best lead providers?
This is obviously a question that most lead buyers are desperate to know the answer to; however, in the absence of industry-wide statistics about which leads actually end up in sales, there is no really good way of determining this. Some companies do exceptionally well buying from very small lead providers who are only have a few buyers in their portfolio and are rigorous about only generating leads that suit those buyers. Others swear by the regularity in quality of the larger lead seller’s leads. In future posts I will attempt to answer this fundamental question with equal measures of solid data and complete conjecture.