double POSITIVE Marketing Group, Inc.

Post By
Sean Fenlon

Wow.

Jodi’s post is a tough act to follow, but I did promise her that would provide a recap of the marquee LeadsCon panel of LeadsCon Las Vegas 2012.  The panel was presented by Doug Valenti, CEO of QuinStreet, and Tom Evans, CEO of Bankrate – the top two publicly-traded companies in the LeadsCon ecosystem.  The panel discussion was moderated by Stewart Barry, a partner with Investment Banking firm Union Square Advisors.  Stewart has represented several buy-side and sell-side clients in the LeadsCon ecosystem, and was a natural fit for the role of moderator between these two high-octane CEOs. 

In the spirit of full-disclosure, I have met Doug Valenti several times and consider him a friend.  I met Stewart Barry after the panel and found him to be incredibly knowledgeable of the LeadsCon ecosystem and also a wonderful person.  However, I have not yet had the opportunity to meet Tom Evans.

Arguably, the premier session of LeadsCon LV 2012, I characterized this as a “must see” to DoublePositive folks and it did not disappoint.  The discussion almost immediately gravitated to the role of mobile in Lead Gen.  Several oft-cited statistics were presented about the rising tidal wave of mobile usage.  Both CEOs acknowledged that they have observed a recent surge in visits to their owned and operated sites via mobile devices.

As a quick sidebar note on the role of mobile, the only other session I was able to attend was presented by Jeff Lawson, CEO of Twilio.  Jeff is an excellent and engaging presenter and really provided a wakeup call particularly to the mobile marketers and media buyers regarding how to adapt and evolve their call-to-actions to better fit the many different mobile environments.  One screen shot was particularly compelling – a screenshot of how most iPad users are typically leaning back or lying down while using their devices, then followed by a screenshot of a typical web-based long-form with several page-steps and dozens of fields right above an iPad touchscreen keyboard (which doesn’t even include a tab key for the user to move between capture fields).  Good luck getting those forms to convert with iPad users. :-S

Tom Evans segued out of the mobile discussion by making the point that it’s just another way to deliver media.  Tom surprised many in the audience by reminding them that Bankrate is a 28-year-old media company and that he joined the company in 2004 with a strong media background.  Bankrate has been positioned and perceived as a media company more so than a media buyer.  Much of Bankrate’s traffic through the years has been organic search traffic to their owned and operated properties including www.bankrate.com proper.  Organic search traffic tends to leave some in the industry unsettled because of the dominant influence that Google plays with its ranking algorithms for valuable search queries.  However, Tom pointed out that the recent Google updates (aka “Panda 1” and “Panda 2”) were ultimately net traffic gains to Bankrate’s sites.

The conversation naturally flowed to online consumer privacy issues after the mention of Google (given the recent uproar regarding Google tracking online consumers across all of their properties).  I believe Doug Valenti echoed the sentiments of all the white hat players in the audience that greater scrutiny and a better developed policy is needed around this topic of privacy.  The challenge here will be educating the policy-makers around how consumer privacy/tracking works in general and then to translate that into what is good and what is bad for consumers.  Most online marketers fear a brute-force Patriot-Act-style legislation that could severely impact many online marketing business models while providing very little additional privacy or control for consumers.  My personal philosophy is that the key is consumer freedom and consumer transparency.  Make what is being tracked very transparent to consumers while describing the benefits, while also providing the freedom to opt-out and otherwise control their own personal tracking settings.

The conversation then led to a conversation regarding online media in general.  Both Doug and Tom consider their respective businesses to be media companies (i.e. sellers of media, albeit most of it on a performance-basis), even though both businesses are also very active media buyers as well.  In that regard, it was refreshing to hear them speak of the consumers that visit their owned and operated sites as their “customers” and they both care deeply about the engagement and experience of those users.  Too often in the world of online performance-based marketing, the consumers are viewed by marketers as clicks and zeroes/ones on a traffic log rather than humans. 

Tom Evans described an interesting challenge for the whole online media ecosystem.  Traffic to online media is dominated by the big portals and players (e.g. Google, MSN, AOL, Yahoo, etc.).  They are all working hard to command the same rates for their premium inventory as offline premium TV could command.  I believe Tom stated the range to be $8-$15 CPMs.  In contrast to that, Tom identifies the massive amounts of non-premium inventory from these same players and other smaller publishers that are being auctioned off through real-time bidding exchanges in the sub-$1 CPM and often even sub-$0.50 CPM range.  On the other end of the spectrum are performance-based media sellers such as Google or Bankrate selling clicks that net an effective $60-$70 eCPM to the publisher.  Thus, Tom identified the big media companies to be stuck in a strange spot in the middle.  I personally view the continuum of eCPM’s as a simple reconciliation of supply and demand, and the continuum becomes more rational as the market gradually becomes more efficient through value-based pricing and real-time bidding.

Both Bankrate and QuinStreet have been highly acquisitive in the LeadsCon ecosystem as a supplement to their organic growth.  Both CEOs agreed that owning the media (as opposed to buying the media – perhaps “renting” the media is a better term here) is a key consideration of value in their M&A strategies.  Doug Valenti used his recent acquisitions of two B2B media companies (Ziff Davis Enterprise and IT Business Edge) as examples.  If the business that is the acquisition target is not a media company, but rather a network or technology company, the key criteria they use to evaluate the strategic fit is whether or not there could be growth “acceleratation” post-acquisition as a result of the larger platform.  Doug Valenti used the acquisition of SureHits as an excellent example of successfully using this approach.  Both CEOs agreed that as publicly-traded businesses, they had a responsibility to obsess about scalability of acquisition targets, but also to enforce best-practices in the industry and accelerate the transition from the Wild West to well-organized and well-governed business practices.  In other words, there seemed to be very little appetite for businesses that utilized incentives or promotions (or good forbid spyware/malware) as part of their interactions with consumers.  My takeaway was that Wall Street tends to reward businesses that are perceived more as media-owners and platforms more so than media-buyers/renters or intermediaries.

The discussion then shifted to the topic of vertical markets.  This has always been a fun topic since 2007 when hundreds of millions of mortgage lead gen dollars simply vanished as a result of the mortgage meltdown.  Many lead gen businesses then began going to great lengths to identify the characteristics and attributes of the best verticals to enter.  Tom and Doug confirmed a few of the most basic desirable attributes – high-value “considered” consumer purchases, sometimes referred to as “chunky.”  It is interesting to note that both QuinStreet and Bankrate share several vertical markets (e.g. Mortgage, Insurance, Credit Cards) but Bankrate does not operate in several other vertical market that QuinStreet does (e.g. Education, Home Services, and B2B).  Verticals that also reflect desirable attributes that I do not believe QuinStreet or Bankrate have entered – at least not yet in a big or meaningful way – include Health, Auto, and Travel.

The topic of the Home Services vertical invoked some interesting disagreements amongst the panelists.  While QuinStreet has a strong presence in Home Services, Tom Evans was sharply skeptical of the opportunity, citing the lack of “any big business in Home Services.”  When the moderator Stewart Barry politely reminded Tom of ServiceMagic as a very big Home Services lead gen company, Tom acknowledged the example but continued to be skeptical of the opportunity because of the noisy/messy long-tail characteristics of the service providers and contractors (who are also the lead buyers).

The conversation then shifted gears away from vertical markets per se and into various pricing models (e.g. clicks vs. leads vs. calls, etc.).  I was thrilled to hear the position of both Tom and Doug on this topic to the extent that it matches the long-held DoublePositive philosophy.  They both held the position that we are all in the customer acquisition business, and that our function is to deliver net new customers at scale and at target cost.  Thus, clicks, leads, calls (and I’ll self-servingly add Hot Transfers to this list), are just various performance-based pricing models at different stages of the funnel, but are designed to achieve the exact same ultimate outcome. 

Amen. 

I will only add one additional observation from the market that I suspect both Tom and Doug would agree with, that the deeper in the funnel that the pricing is determined yields an inverse relationship to scale/volume vs. risk/challenge.  In other words, the challenge/risk of buying clicks and converting them into sales is greater than that of buying leads, calls, or Hot Transfers, but there is a much greater volume of clicks available to buy in market for those that can manage that risk/challenge.

Tom Evans described the evolution of pricing models at Bankrate.  When he arrived in 2004, they sold mostly display ad inventory on a CPM basis.  Their online rate table product allowed them to evolve into a CPC pricing model that sold clicks.  The insurance vertical acquisitions of InsureMe, NetQuote, and InsWeb pushed them into selling leads on a CPA/CPL pricing model.  DoublePositive is happy to be working closely with Bankrate Insurance which allows Hot Transfers as one of the delivery model options, thus a CPT or Cost-per-Transfer may soon follow.  Tom seemed to suggest a bias for the higher pricing models with his colorful comment during the panel that “We’re still asking people to swim through a lot of swamp water to get to the jet fuel… We charge a lot more for the jet fuel.”

The “jet fuel” metaphor is a good one.  Tom mentioned that a $1,500 total marketing cost-per-funded-loan is still the market average in the mortgage industry.  Most buyers would gladly spend $1,500 for a single click, a single lead, or a single call/transfer provided that they had a 100% conversion to funded loan rate, but that is only hypothetical.  It is the “swamp water” that requires lower blended price points.  In Baltimore, we refer to this as crab-cake filler. :-)

As an extension of this principle, both Doug and Tom agreed that it is still difficult to get end-of-funnel sale or transaction feedback from lead buyers.  This has been a common meme at every LeadsCon, and a common frustration of lead sellers for over a decade.  The buy/sell market will never be as efficient as it can be as long as the feedback loop of true value is broken.  Bridging the gap of this broken feedback loop is a key pillar to the DoublePositive media buying and right-pricing strategy.

At the end of the panel discussion, the moderator allowed a few questions from the audience.  An interesting question from an audience member was regarding the roll of affiliates within their supply channels, especially with respect of both CEOs passion to eliminate bad actors.  Tom Evans responded by stating that his affiliate channel was Bankrate’s least-profitable channel.  The most profitable channel was of course organic traffic from owned and operated sites.  However, direct media buying (where there is no fear of bad affiliate behavior) yielded higher margins than the affiliate channel, thus challenging the myth that businesses utilize an affiliate channel (and the noisy risk of bad affiliate behavior) merely for higher margins. 

The next question was a nice segue.  A representative from Progressive Insurance asked “who pays the cost of these bad affiliate actors?”  The answer shared by both CEOs is that both the lead buyer and the lead seller share the cost.  The lead seller bears the cost by having their performance diluted thereby preventing from securing higher rates in market for the rest of their inventory.  The lead buyer bears the cost by working to a lower blended price per lead (thereby reducing their overall volume) but also wasting operating time/money and emotional bank accounts of their sales force.

The final question from the audience was about International expansion opportunities.  Doug Valenti took the lead on the answer and first set the table by stating that the vast majority of the opportunity for lead gen businesses is still in the USA.  He went on to describe QuinStreet’s international strategy and how it fit into Western Europe and Latin America.  Doug confessed that China is a tough nut to crack given the highly-localized and highly-personalized idiosyncrasies of the culture and the market there.  DoublePositive board member Stein Kretsinger has made several investments into online advertising businesses in China and agreed with Doug 100%.

Overall, I found this panel discussion to be one of the most memorable and enjoyable in LeadsCon history.  I’m hoping that Jay is able to make this inspiring State-of-the-Union style panel an annual affair.  Bravo to Doug, Tom, and Stewart, and Cheers to Jay.

 SPF

Post By
Jodi Swartz

WOW!  What a conference.  What a city.  What an exhilarating (and exhausting!) experience.

As a LeadsCon newbie, I wasn’t sure what to expect.  I mean, I’ve been to what feels like one million tradeshows, and managed half as many as a marketing director…so I was curious to find out for myself what all the buzz was about.

As my previous posts indicated, LeadsCon West 2012 was held in Las Vegas, Nevada on February 28 and 29 (with a special buyers only event held on the 27^th).  Vegas is one of the best places to hold tradeshows, so that, by design, is a positive.  The leads ecosystem is forever evolving with new businesses and professionals entering the market all the time, so that’s a positive.  And, since I planned our exhibit (complete with photo booth) and party (with our partner Leads360) I knew those were going to be, if nothing else, fun!  So, positives there, too.

Thus, I came into the show with the following:

• Vegas?  Positive.Evolving industry? Positive.
• Fun booth? Positive.
• Cool parties? Positive.

Seemingly, the basics were covered.  But, what else would make THIS particular LeadsCon stand out?

Well, first, companies in attendance topped 1200 and total attendance topped 2600—a myriad of exhibitors welcomed booth visitors with hospitality and enthusiasm, speakers inspired and challenged audiences, the Mirage excited and delighted (just ask me about my final night’s stay in the penthouse suite),  and the networking was unstoppable.  So unstoppable, in fact, that it stymied my original plan of being a devout LeadsCon student—attending each and every seminar available, soaking up new industry knowledge, every minute completely rapt—graduating with my PhD in “the biz.”  Yeah…not so much.

My team was on FIRE this year!  Booth regulars like Joey Liner, Syed Zaidi, and Brian Ocheltree spent so much time meeting with clients, prospects, and partners that our “while you were out” notebook was nearly full.  At times us DP booth folks were outnumbered by a margin of at least 3:1 by those wanting to chat with us.

DoublePositive/LeadsCon360 party bracelets were so in demand they became near black market items.  And, I was about ready to hang a sandwich board sign on my back that said “To speak with JT Benton, please take a number.”

So, what WAS all the excitement about?  What made this year different?

Well, it started right before the show when we were honored with two LeadsCouncil LEADER™ awards— Best Hot Transfer:Lending and Best Hot Transfer:Technology.

Needless to say, we were thrilled and took that enthusiasm straight to Vegas.

On Monday at 2:30 (the day before the actual show began), the aforementioned Mr. Benton spoke at the first-ever LeadsCon Buyers Summit about performance mobile marketing.  JT, a long standing expert in the field, spoke about why (finally) the time is right for mobile click-to-call, how it impacts marketing and media plans, and strategies for implementing it successfully.  All of this good stuff was promoted well in advance via news releases and blog entries, and a terrific webinar produced by our partners at Ring Revenue.  At the close of the seminar, JT also unveiled DP’s first white paper on the subject.  (SPOILER ALERT: Look out for a webinar in the very near future where you can learn from the master himself and get your own copy of the whitepaper.)

Although I wasn’t able to see it live myself, I would have thought JT was one of the Beatles at the height of their popularity (thus the sandwich board dream).  A big shout out to @LeadsCouncil for their tweet “@DoublePositive JT Benton Doing an amazing job presenting on Mobile Marketing #LeadsCon.”  Thanks guys!

On Tuesday morning, as the team’s official “crazy marketing lady” it was my job to make sure that DoublePositive was ready for the crazy schedules that were ahead of them, that our booth was inviting and fun, and that our head “misfits,” company CEO and EVP, Sean Fenlon and Joey Liner, respectively, were prepped and ready to go for their welcoming address.  Sean and Joey had the priveledge of welcoming the entire conference immediately following the keynote.  The moment was certainly not lost on them as Joey (@joeyliner), so fittingly  tweeted: “This is 1 of those defining moments in life, about to speak to 2500+ in a welcome address for LeadsCon with my partner Sean #DoublePositive.”

Following the welcoming address, it was over to the tradeshow floor where our 10×20 booth was transformed into a comfortable lounge space complete with a photo booth (to capture folks in their tradeshow best)!  We brought our favorite DP website characters with us, we had Viking helmets, sunglasses, and signs promoting Joey for Mayor!

While people shed their inhibitions in the most PG ways possible in photo booth…

…others shed their shoes and kicked up their feet on our couches (including our very own John Nuclo, Stein Kretsinger, and Syed Zaidi—can you feel the love?).

The DoublePositive team was visible on the floor and off Tuesday—most notably with Joey “LeadsCon Mayor” Liner invited to speak during the “Is Lead Gen a Dirty Word?” panel.  He was joined by Jeremy Johnson, Co-Founder and CMO, 2tor, Inc., John Kobs, CEO & Co-Founder, ApartmentList.com, and moderated by Jeff Lawson, CEO & Co-Founder of Twilio. (That’s our guy, second from the left.)

All the while, attendees zoomed from booth to booth making friends and influencing people—and searching for the sacred bracelets for the DoublePositive/LeadsCon360 party later that night at Rhumbar.

So…later that night at Rhumbar…the atmosphere was sumptuous, the drinks were spirited and flowed freely , the staff at the club couldn’t have been more hospitable, the weather was beautiful (albeit a little on the windy side), and everyone relaxed…played some cards,  snapped some shots in the photo booth and all around had a great time.

Thank you to our friends at Leads360 for (once again!) making it a special night, and thank you to Steve Hall for the great photographs (below).

Up early again Wednesday morning…

Day two proved even more exciting as attendees and exhibitors alike knew they had just one final day to meet, greet, and eat.  Our booth was a flurry of folks looking to engage with our team members, learn about our products and services, and snap some shots in our photo booth.

Midway through the afternoon, our very own Rich Dent donned his favorite sombrero and participated in a video interview about the show with VigLink CEO, Oliver Roup.  Go Rich!

After a brief rest and bite to eat, it was off to the LeadsCon VIP after show party at newly opened 1Oak Night Club in the Mirage Hotel and Casino.  Attendees got decked in their show-stopping finest and partied in celebration of another spectacular LeadsCon.  Our team really got into the spirit of the event (thanks again to Steve Hall for the great pic on the left)!

So, let’s review.  Obviously, my expectations were pretty basic and I kept that that way as to not be disappointed:

• Vegas?  Positive.
• Evolving industry? Positive.
• Fun booth? Positive.

What I wasn’t expecting was EVERYTHING ELSE LeadsCon West had to offer.  Although I did not get to attend many seminars (because apparently I was preparing for some kind of cross-country marathon running from one end of the Mirage to the other all day long!) I heard from many teammates, associates, and those through the social networks (just look up #leadscon) how much they learned and enjoyed the material. Personally, I learned a heck of a lot about the industry, how deep my colleagues knowledge is (they fielded questions from every direction!), and how enthusiastic everyone remains about contributing to and shaping the leads ecosystem.    And the networking?  Let’s just say I am happy to have e-copies of all photographs from the booth so I can continue to match names with faces.

Obviously, my expectations were BLOWN AWAY.  We put a lot of work into preparing for LeadsCon, and LeadsCon clearly delivered back so much more.

• Amazing speakers? Positive.
• Super smart people?  Positive.
• Great networking? Positive.

Doing it all again at LeadsCon East? DOUBLE positive.

See y’all in New York City!

Post By
Rich Dent

You guys know me – booth babe.

So last month at Leads-Con East, I am chatting with this guy who says he’s a big leads buyer.  He likes our LIVE Hot Transfer concept, and wants his enrollment officers to receive live, interested leads on the phone, but …

“Can’t you guys qualify them more?”

This comment shows how times have changed.  In the old days, companies were simply handing a fat pile of leads over to sales, and asking them to call them all.  It was like looking for a needle in a hay stack.

Then DoublePositive came along and found the needle in the hay stack.  We patented the LIVE Hot Transfer process, so that companies could receive phone calls from live consumers who were ready to talk with a salesperson.

Now this guy wanted to know if we could take it a step further and thread the needle for him.

“We do some simple qualifying,” I cautioned.  “But in my opinion, you should be careful what you ask for.  You might do yourself more harm than good.”

He said, “Why?  If I’m talking to people I can’t help, I want to filter those people out.”

“I understand,” I said.  “But you need to be careful who you filter out, or you will filter everybody out.”

“Not sure I follow,” he said.

I tried again.  “Think of it this way.  What if they have a family member you could help out? What if you discover there is another service or product you could provide?  You never know unless you talk to them.”

He shrugged.

“You are basically asking the call center agent to make that decision for you,” I said.  “That’s not wise.  What you should do is, let us eliminate those consumers who really had no interest of ever speaking to you about your product or service.  Let us take away that work for you.  And the rest?  Those who have raised their hand and said they want to talk to you?  You should take those calls as fast as I can transfer them to you.”

“I don’t know,” he said.  “There’s got to be an easier way.”

I gave him one of Sean’s great lines: “There’s nuggets of gold in the hills.  Finding them is the hard part – that’s our job.  It’s your job to work them.”

“Well, I need someone who will do all the work for me,” he said.

At this point I just had to laugh, shake his hand, and wish him luck.

So I’m writing this post to help folks understand.  There is a right way to use a LIVE hot transfer service and a wrong way.

If you want us to call your leads and transfer back only those that are ready to talk business, that’s the right way.

But you want us to call, qualify the lead, sell for you, close the deal and just send you the money …

Booth babe says, “Good luck.”

Post By
Rich Dent

When you’re hot, you’re hot, and DoublePositive is definitely hot.

First, we’re growing at a torrid pace.  That’s why we decided to bring both our DP East and DP West teams to LeadsCon East in New York last week.  Hopefully you got a chance to meet more of our talented people who are setting the industry on fire.

Second, we were happy to be in a position to underwrite LeadsCon East as Lead Sponsor this year.  DoublePositive has had a hot hand, and this is one small way we were able to give back to the community.

Third, to really spice things up, we brought our own hot sauce to the event.  It was a special fiery concoction that was brewed just for us.  We passed out 250 bottles in New York.  Yes, that’s me on the label.  Hot stuff, I know.

Are you tough enough to take the heat?  Can you handle all that Live Hot Transfers flavor?  If you were one of the fortunate (or unfortunate!) ones to pick up a bottle, let us know if your tongue survived.  And check back soon because I expect to have a few more posts about LeadsCon.

Post By
Joey Liner

In my last post, I gave the Internet leads perspective on where mortgage is as an industry today. Interest rates are low, but consumers can’t qualify for purchase or re-fi loans. Loan officers’ compensation rules have caused mortgage shops to change focus, and a huge pool of consumers for loan amounts under $250K is being ignored. The comparison lead product, which came onto the scene with such great promise, has been unable to provide enough volume. Margins are thin. Doors are closing. In short, there is a lot of stress and anxiety in the market.

Other than that, you might say, everything’s great.

No boom for comparison ads

Three months ago, I predicted that comparison lead buying would scale quickly. Since then, the comparison ad market has stayed flat. The LendingTree product Loan Explorer has been put on hold. I haven’t seen much from LeadPoint, either. They were supposed to have a major comparison lead product as well.

There are still four that dominate the comparison ad market (BankRate, Zillow, Informa, and Google). Their clients are doing well with the comparison leads. Unfortunately, they are complaining that they can’t get enough volume. (See my State of the Union – Part II http://bit.ly/iiltBZ to understand the factors that impact the volume of comparison leads available.) As a result in my estimation, it now looks like comparison ads will make up closer to 25-30% of the total next year, no more.

The state of the sales floor

Something else I predicted has not yet taken effect – but this time, I don’t think I’m wrong. I’m talking about my advice to lenders to divide their sales floor in order to scale.

Right now, I’m seeing shops go one way or the other. I’ve seen a complete reversal with two of the major players in buying lead aggregator leads. Until recently, they were heavy buyers of regular internet leads. Then they shut it off and went 100% comparison ads.

Why? Their conversion rates were dropping on traditional leads. I think they took a good look at the profile of their sales force and felt that, on the out-bound, aggressive side of the sales floor, they were not competitive with Quicken and big internet lead buyers. They lost out. So, to continue to operate in the Internet channel at all, they felt the only way to compete was to move to a low-margin / high volume business. So they publicized their rates, and completely switched over to comparison ads, where their “sales” folks just have to honor the published rates on the ad. BTW, I took some criticism for calling that order taking from some loan officers and managers in my last post. I was not trying to offend anyone on the front lines, just making a point that it is a completely different sale then the aggregator model.

This shift has been successful for both companies. But again, what I keep hearing is that lead buyers can’t get enough volume to meet their demand.

Opportunities in the confusion

So I stand by what I said at the start of Q2. In the long term, mortgage shops will buy both traditional and comparison leads online. To scale the company and hit revenue goals, you simply will have to do both. You’ll divide your sales floor, because you understand that you are dealing with two different types of sales, requiring two different types of sales people.

But you’ll still need to be smart about navigating these changes. A whole lot can still go wrong. I’ll talk about that in my next post probably mid-week.

Post By
Joey Liner

Only one quarter of the year has passed, but a whole lot has gone down since I blogged about the State of the Mortgage Industry – and unfortunately I do mean down.

Before I start, I want to be upfront about the realities we are facing. You guys know me – I try to be the most optimistic person in the room. But these last few months have been one of the most frustrating time periods in my leads lifetime. I wish I could have a positive outlook. The truth is, the negatives continue to overwhelm the positive in all the major trends.

1. Interest rates

Yes, interest rates have stayed low. That’s a plus. But low interest rates are only a small part of the equation in qualifying a buyer for a mortgage. You still need a good loan-to-value to qualify for a mortgage. Most consumers don’t have that – they are upside down. The banks are still very strict on their underwriting guidelines. That has been frustrating for folks in the space who are ready to lend to consumers who are ready to buy or refi, but can’t get qualified.

2. Regulation-Z

The loan officer compensation requirement, Reg-Z, has caused a major change in the space. In my last post, I commented that loan officers earning over $150K per year would become a thing of the past. Well, a lot of them are in a state of confusion and disarray right now. These are smart, competitive men and women. I think a lot of them assumed they’d make a transition and things would correct themselves. But, from the leads perspective, we’re seeing that it’s tougher and tougher for them to win. The game has changed.

Reg-Z changed the game. In the past, you could do a $100K loan and still make a good fee off of it, because there was no regulation on the percentage that you could make off that loan. Now compensation is based on the loan size. The only way loan officers can chase the same type of fee they used to make is by closing larger loans only. As a result, mortgage companies are only going after large loan amounts, of $250K or greater.

This change in philosophy by mortgage companies has created problems in the Internet lead space as well. Traditional lead buyers, who for years have been buying leads from LendingTree and LowerMyBills, are now only buying the $250K loan amount or higher. This leaves a huge market of consumers for loans under $250K that is not even being called on. Lead buyers don’t want them.

What will happen to these consumers? They will go directly to their banks. I expect we’ll continue to see that the bigger banks are going to win in the long run. They will do those loans because they don’t pay their loan officers commission (most are just salaried), whereas the regional banks, lenders, mortgage brokers won’t even touch anything below $250K.

This is a frustrating business case from the leads perspective, as well. The big 4 banks are not buying leads. They are talking about it, but not really going after it right now, because they are able to rely on walk-in traffic. They keep saying they are going to be big lead buyers, but they aren’t feeling the pain. And so this huge pool of leads remains untouched.

3. Comparison ads

When I’m wrong, I try to be the first to admit it. So I admit that I overestimated the extent to which comparison ads would be adopted. This is still a relatively new lead product and did not grow last quarter as I predicted. Not because lead buyers don’t love them – they do. Because they simply can’t get enough volume.

I have a lot more to say on the topic. I’ll pick it up again in my next post. Check back soon.

Post By
Brian Ocheltree

How to identify value while diversifying and increasing lead supply

Summary

• The value of aggregator leads – both shared and exclusive ­­– has changed
• After self-generated leads, the best option might be aggregator leads, not paid search
• Shared leads are often a better value than if the same leads were exclusive
• Lead-Buyers should also test exclusive leads to determine whether they convert better
• New quick connections allow Buyers to add more lead supply, from more diverse sources, without adding IT integration costs

A New Mix of Business Drivers

When planning the integration of Internet leads into the company’s sales and marketing efforts, Lead-Buyers need to check their assumptions about shared versus exclusive leads.  The market has changed.  Optimized properly, both lead types can be significant growth drivers.

The Problem of Shared versus Exclusive

There’s a misunderstanding about the value of the different types of leads today.  Because exclusive leads can be 2-3x the cost of shared leads, some Lead-Buyers think they are too expensive.  But are they?  Others think that because shared leads are shared, they are not worth the price.  Is that correct?  Could both be right?

Rather than guess at answers, DoublePositive recommends taking a step back and considering the facts.

Your Most Valuable Leads

First, a word about your most valuable type of online lead, the self-generated branded lead.  These are the leads generated from your own website typically.  Generally, these leads are the highest quality because they are from highly motivated, proactive consumers who tend to be “in market” and are therefore the consumers most likely to convert.  In addition, self-generated leads are often very inexpensive since many come from free organic search traffic.

So, if self-generated branded leads are the best, and usually the cheapest, why do anything else?

In most cases, the volume of self-generated leads is not sufficient to hit required sales goals.  Increasing the volume is a slow process, and Lead-Buyers can’t simply “step on the gas” to generate more self-generated leads overnight.  You can use paid search to increase the volume quickly, but in most markets, this becomes cost prohibitive quickly due to brand advertisers bidding up the primary keywords to unrealistic prices.   Think of trying to compete with Geico and Progressive for the key phrase “Auto Insurance” to drive traffic to your website.  It doesn’t work.  So, to fill the gap between self-generated leads and sales goals, aggregator leads are one of your best options.  Both shared and exclusive should be considered and ideally tested since everyone’s situation is different.

Are Shared Leads a “Necessary Evil”?

Some Lead-Buyers have always believed that shared leads are bad.  We hear it all the time.  Shared leads are “a necessary evil”.

DoublePositive challenges our clients to look deeper before deciding whether that statement is true.  Some shared leads are bad, no doubt.  Perhaps most are.  But we have found that if a shared lead is bad, it probably isn’t because it’s shared, but rather more likely due to other reasons.  For example:

• The lead was generated from a low quality source
• The lead was sold too many times, or is aged
• A Lead-Buyer has abused the lead with unscrupulous dialing methods

Are Shared Leads Any Good?

A complaint I hear every day from our lead buying customers is that shared leads are no good because they are shared.  There is too much competition fighting over the consumer’s attention, they complain.

While it may be true that these leads would be better if they were not shared, they become less attractive when the price is adjusted appropriately.  Suppliers would have to charge 2-3x the price of a shared lead to make their economics work.  And I do not believe these leads would convert 2-3x higher if they were exclusive, which would be required to justify the higher price.  Keep in mind that if a consumer is truly “in-market” and motivated to buy, it is likely that they visited multiple supplier sites and submitted multiple forms, so even though you got an exclusive lead from one supplier, you probably aren’t the only sales organization calling that lead.

During a recent client visit, my client asked “How do the lead suppliers do it?  They only charge me $7 a lead, and it costs me $50 per lead to generate on my own through paid search.”  I was speechless.  This was the first time I had ever been asked that question, and usually it’s the opposite.  In my opinion, sharing the leads is a big reason the economics work for all of us.

What about Exclusive Leads?

If all else is equal (lead type, lead source, speed to lead, etc.), then an exclusive lead should convert higher than a shared lead simply because there are fewer companies pursuing the sale.  However, all else is rarely equal, and these other attributes contribute more to the likelihood to convert than the exclusivity attribute, I believe.

Just as with shared leads, some exclusive leads are good, and some are bad.  We believe the best plan is to include them in your testing and optimization process along with shared leads so that you can see which type and sources convert the best for your particular situation.  As long as all lead sources are optimized for Cost Per Sale Per Supply Source (see DoublePositive white paper “Tapping the Value of Supplier Leads” at http://bit.ly/lnjmaz), the more supply sources you have, the better.  For the clients whose lead supply we manage, we rarely see the cheapest lead source being the lowest cost per sale, or the highest priced lead source being the highest cost per sale.  It is different in almost every case, and it changes over time as each supply source adds new affiliates, and other lead sources to their offering.

Access to More Suppliers

As we have shown in previous white papers, there are compelling financial reasons for having as many supply sources as possible.

A supplier offering exclusive leads generated from search is just one example of the multiple lead sources available.  In our opinion, every Lead-Buyer should try out as many lead sellers as they can.  Especially since the greatest obstacles to connecting with these suppliers has been eliminated.

Utilizing Third-Party Connectivity

In the past, the technical integration to connect to more suppliers was difficult and time consuming.  For many clients, getting connected to new suppliers could take months, if not a year or more, due to the technical and testing requirements with each data feed.  This level of complexity and cost prevented most companies from engaging with any but the largest of suppliers, at least initially, thus limiting their supply diversification.  It has been difficult to justify the effort for a small set of new suppliers.

Third-party connectivity platforms have eliminated this problem.  DoublePositive’s Lead Funnel, for example, facilitates and automates the physical connection to many lead sources automatically.  Lead-Buyers simply build one physical connection that is already connected to multiple supply sources.  This allows them to maintain a direct relationship with the supplier, without incurring technology integration costs.

Lead-Buyers with a Lead Funnel can turn the lead flow on and off for new suppliers, without any expense, and pay only for leads.  Let’s take another look at how it works:

In the above illustration, “You” are using a DoublePositive Lead Funnel to make a single data connection to multiple, diverse suppliers.  Our proprietary Translation Engine handles the entire custom data mapping per supply source.  By building one connection to the Lead Funnel, the company can be connected to virtually every supplier, large and small, quickly and efficiently.

Once the necessary connections are in place, Lead-Buyers can add and test new sources at the same time, filling the gap between self-generated leads and sales goals.

Review

What options are available for companies looking to leverage diversified lead types and drive growth?  Let’s review the facts.

1. Misconceptions about the value of shared versus exclusive leads can cause missed opportunities for today’s Lead-Buyer
2. A shared lead can be good or bad, depending on factors such as speed-to-lead, quality of lead, lead type, source, etc.
3. The best exclusive leads often are not exclusive, because a motivated buyer is likely to visit multiple “exclusive” supplier sites and submit multiple forms
4. Connecting to a Lead Funnel allows companies add more suppliers and test more shared and exclusive leads, without adding IT costs
5. Companies that pay only for the lead, and optimize their supply sources, can successfully use both shared and exclusive leads to reach sales goals

Post By
Rich Dent

Back in February, in my post How to Strengthen Contact Rates , I told you guys about the new inbound-outbound service DoublePositive had recently launched.

As I mentioned at the time, our contact rate is historically about 50% – but early this year, we saw that rate dipping.  We knew the problem had to do with smart phones and the personal firewall they create.  According to the most recent Nielsen report, as of December 2010, 31% of cell phone users in the United States are smartphone users.

Show of hands.  If I called you on your smart phone right now, and you didn’t recognize the number, would you answer?

Probably not.  Over 90% of consumers would ignore an unknown number, according to an informal survey I ran on Facebook.  But those same consumers said they probably would call back if the caller tried to reach them more than once.  Wouldn’t you?

Our new inbound call-back service was born.

So, are they calling us back?

It’s still very early, and so far, we’ve limited our test to mortgage leads.  But I can tell you definitively that we’ve seen a lot of call-backs.  And when they call, one of two things is happening.  Either they hang up right away (“Oh, it’s ABC Mortgage.  I don’t feel like talking to them right now”), or they stay on the phone because they are interested in speaking with a representative.  Those in the second category are transferring at 70%, a very high rate.

What does that mean to lead buyers and lead sellers?

It means we are improving the performance of your leads.  Keep in mind, those call-backs are consumers we previously never would have been able to contact.

As a result of this early success, we decided to roll out our call-back service across all verticals.  Our new test group is 80% of all the leads we are dialing on, and we are holding 20% back as a control group.  I will share the results as soon as comparative data becomes available.

Meantime, we’re still asking ourselves, what else can we do to get people to call us back?

Local versus 800

At LeadsCon in Vegas last month, DoublePositive partner Joey Liner spoke on a panel with Ken Krogue, President of InsideSales.com, a dialer manufacturer.  Ken confirmed what DoublePositive had long suspected.  He said that InsideSales.com had seen a nice uplift in performance by displaying local numbers to consumers, instead of 800 numbers.

In our experience, this seemed true.  Prior the conference, we had conducted another informal survey on Facebook.  We asked, would you be more likely to answer the phone if the caller was a local number versus an 800 number?  Again, over 90% of consumers told us they would be more likely to answer a local number, because it might be someone they know.

DoublePositive decided to test this theory.  We reached out to one of our key clients in the mortgage industry, and will perform a test on the leads we dial on their behalf.  The expectation is that using local numbers will increase our contact and transfer rates.  We’ll let you know how it goes.

Needs evolve.  Buying habits change.  The important thing for all of us is to keep innovating.  Stay ahead of the curve, and you’ll be ready for where the market takes you next.

Your turn.  What are you doing to get consumers to call you back?

Post By
Rich Dent

I have been silent for a few weeks, but for good reasons. March was just a crazy month for us at DoublePositive. We had our best month with respect to Hot transfers.  We had LeadsCon 2011, the Lending Tree Summit, March Madness and Opening Day for the Baltimore Orioles!  I am back and have some good stuff I want to share with everyone.

This year in Vegas was my 4^th LeadsCon, and I must say, the growth of this event has been nothing short of amazing.  At 2500 participants, word has clearly gotten out.  More lead buyers from more verticals are realizing how important it is to attend the pioneering conference for the online lead generation industry.  And why not?  They get a valuable take-away: Information that can revolutionize their sales function.

My role at LeadsCon this year was “booth babe” – I didn’t spend a lot of time in break-out sessions but stayed out on the floor where I could talk directly with hundreds of lead buyers and take a pulse on what’s really happening out there.  Here are some things I heard:

The pain is spreading

Problems that used to affect only the mortgage industry have spread other lead-buying sectors as well (for-profit education, insurance, home services, automotive, real estate, etc.).  I even met some great people from the 2^nd largest supplier of diabetic equipment in the country, who said they purchased thousands of leads per month.  They told me, “It may take us an hour or two to get back to a lead – and by then it’s too late.”  Sound familiar?

The pain is deepening

I also spoke with a lot of companies that were afraid to expand their businesses.  They knew that simply buying more leads wouldn’t work, because then they would have to invest heavily in recruiting, hiring, training to expand the sales floor – all of which could take months, whereas they needed results immediately.  Have you been there?

The solution is working

And then there were the dozens of folks I spoke with who were already fully aware of the value of LIVE hot transfers.  I got to spend quality time among friends who had successfully leveraged our process and grown their businesses.  Here are some of the success stories I heard:

• “I know I can start buying more leads tomorrow and send them to my top guys, increasing lead flow overnight without missing a beat.”
• “We are talking to interested consumers within minutes, not hours.”
• “We were able to ramp up without hiring.”
• “We love how flexible hot transfers are.  Now we can speed up or slow down the lead flow at a moment’s notice, unlike call centers, which put us on the hook for a certain amount of leads per month, even when we can’t handle them.”

One great thing about meeting people in new verticals is that our service is plug-and-play.  It makes no difference to us if they are in mortgage, for-profit education, insurance, or even diabetic equipment.  We make their phone ring with live, qualified consumers who are interested in talking with a sales professional.  Everyone can win.

I have more to share about LeadsCon, so check back soon.  Meantime, drop me a note in the comments section below – what issues did you hear people dealing with?