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Blind faith in lead generation has cost some brokers dear but as Mortgage Business discoveres an unblinkered approach can yield results
In an industry where deals mean dollars and dollars are getting harder to come by, having a steady flow of customer leads is vital.
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While word-of-mouth is still the best way to generate business, a specialist lead generation provider can go a long way to helping brokers boost their client base.
Like any industry, the lead generation business has its share of shady types. But the good operators out there mean lead generation services are still worth exploring.
Brendan Ansell of Velocity Finance is among the unconverted. He has had two bad experiences with lead generation providers – experiences that have left him wary of using lead generation services in the future. “I just don’t believe it works,” he says.
Many brokers have similar stories according to Andrew Clark of lead generation provider Financial Services Online.
“The reputation of lead generation providers in the mortgage industry is somewhat blemished,” Mr Clark concedes.
“Unfortunately there are some rogue operators out there and some brokers have been burnt.”
But Mr Clark says there are many lead generation providers who offer genuine and valuable services. He says it’s a question of brokers doing their homework and approaching the relationship with an open mind.
THE BENEFITS OF LEAD GENERATION
There are several benefits to brokers in using lead generation services which, despite their critics, still have a place in the industry as long as they deliver. It might be to boost business volumes when other generation avenues have dried up or simply to grow your business and increase volumes.
Michael Williams, managing director of the John Hopkins Group in Victoria, is a strong advocate of lead generation services. He says his revenues have multiplied as a result of lead generation and it has led to other opportunities.
“On top of writing more home loans we also see a cross-selling benefit from our leads, with a strong opportunity to write more business for clients from the different arms of our business,” Mr Williams says.
Lead generation services can also play a valuable role in training new brokers, as Doug Daniell of Origin Finance in Sydney can attest to.
“The biggest challenge for new brokers is building a referral network,” says Mr Daniell.
“[Lead generation] services provide our new brokers with leads and a good reason to get out there and start talking to people.”
And of course, new leads offer new referral opportunities.
“We get a lot of referral business from our leads as well,” says Mr Williams.
DOLLARS OUT, DOLLARS IN
The cost of lead generation services will vary from provider to provider. What’s important for brokers to consider in weighing up the cost against the likely benefits is that the service represents good value for money for their business.
The value of a lead is the opportunity it presents and it really comes down to the likelihood of conversion.
As a general rule of thumb brokers should never pay a lead generation provider more than 30 per cent of the revenue the lead offers.
Brokers should also bear in mind that lead generation is a long-term proposition and that its ultimate value may only be realised over time. But with its potential to generate greater opportunities for cross-selling, for referrals and ultimately, deals, lead generation can end up paying for itself. That’s an appealing prospect.
CHOOSING YOUR PROVIDER
When it comes to choosing a lead generation provider, openness and honesty on both sides are crucial.
“Transparency is [the] key,” says Andrew Clark.
“Brokers who register with us can see where we generate leads from, they have access to the form leads complete, and they can see the last 90 day history of leads generated,” he says.
Michael Williams of John Hopkins Group – which generates much of its business from lead generation – advises brokers to look for qualified leads.
“If the leads are proactively instigated by the consumer they are more likely to offer strong conversion opportunities,” he says.
Justin Delanty of Home Loan Hunters in Tasmania says while he has never used lead generation, he has heard some real success stories.
He suggests brokers make like borrowers and ask around to find out which providers brokers have had a good experience with.
