Many advisers view lead generation firms with suspicion, but is this justified? Justin Rees explains how purchasing consumer information in the form of leads can help new business blossom
It is fair to say that the majority of businesses would want to speak to prospective customers who had requested their advice just a few seconds earlier. This is what lead generation offers but despite this it attracts suspicion and disparaging remarks rather than being embraced as a powerful tool to source new business.
One of the main reasons for this attitude is a simple lack of understanding about the concept as most intermediaries do not have a full grasp of how internet marketing works. But why should they? This is not their area of expertise and the lead generation industry, as it is primarily online, remains largely a mystery.
Opening up
In the past, lead providers have been guilty of not taking the time to explain how their industry works but in the current climate, when sourcing new business is getting harder, it is more important than ever to educate the market. By lifting the lid on the industry, lead providers have the opportunity to build confidence that lead generation is a viable tool to enable a business to reach customers. And the most important aspect of this is to explain where leads come from and how they are generated.
The primary method of sourcing leads through the internet is through search engines - a consumer looking for cover may go to Google and type 'life insurance' or a phrase such as 'I want life insurance' into the search box. When they hit return, they will be presented with a results page listing various companies and websites relevant to the search terms they have entered.
On this page there will be two types of listings. In the main area of the page, there is what is known as the 'natural listings' and, at the top right hand side of the page, there are 'sponsored links'. These are links to the websites of companies that have paid to be on this first page. When a consumer clicks on one of these links it will cost the company money. This can be anything from a few pence to tens of pounds. When a consumer clicks on a link they will arrive at a website that will provide information about the product or service - in this case protection insurance. There may be information about the different types of products on offer, examples of prices or testimonials from consumers who have used the site.
Some of these websites will be insurance companies that offer the policies, while others may capture consumer information which is then sold on as leads to intermediaries. Any website that collects consumer information for the purposes of lead generation must make it abundantly clear to the consumer that they are leaving their information in order to be contacted by an adviser. This should include clear messaging around the site but also text above any 'submit' button to remind the consumer what they are agreeing to if they submit their information.
One thing that is important to remember is that quality of information is as important to the providers as it is to the buyers. If the consumer is not expecting to be contacted then purchasers may struggle to convert leads into business. Therefore it is in everybody's interest to ensure consumers are fully aware of why they are leaving their information. Lead providers, as commercial enterprises, will only be successful if they have a high degree of repeat business and this will only happen if the lead is good quality.
Lead generation allows the lead buyer to target their ideal consumer as websites have a number of fields that can be filled in by consumers if they want to be contacted about the product or service in question. These forms usually ask for some information about the type of product the consumer is interested in such as length of term and amount of cover for life insurance. It will ask for contact information such as phone numbers and email addresses. The more information the consumer fills in, the more the buyer can filter to reach their target consumer. For example, if the form collects information as to whether the consumer is interested in critical illness cover then the purchasers can choose whether they want these types of consumers.
Money well spent?
For every 10 consumers who click on a sponsored link on the Google landing page, only a small percentage will complete the form and submit their details. This is why it costs for a lead to be generated. For example, if the sponsored link costs the advertiser £5 a click, this lead will cost £50 to generate if just one in 10 people submit their information. However, this is only the start of the lead's journey. Any reputable lead provider will have a technological validation system in place to screen out bad leads - phone numbers should be in the correct format, post codes must be registered with the post office and false names can be deleted. All this enables lead providers to sell a higher percentage of 'genuine' consumer leads.
Where the system comes into its own is that the entire process - from a consumer clicking 'submit', to the lead going through validation and then being sent to the lead buyer - takes only a few seconds. This means that if the lead buyer follows best practice advice and calls the consumer as soon as the lead is received then they are often still at their computer. This immediately builds a rapport with the consumer and helps drive conversions.
Lead generation is not a magic solution, and it requires thorough planning in exactly the same way as any other marketing initiative. The hard parts are what the purchaser does before and after buying leads. The most important thing is to have realistic expectations about what lead generation can do. Before undertaking a campaign it is important to work out the needs of the business in order justify it. Like any marketing activity, lead generation should be measured in terms of profit on expenditure and a lead buyer needs to work out what they need to succeed.
Planning ahead
It is also important for the lead buyer to get a clear understanding of who their potential customer is while remaining realistic. The perfect customer may not exist but lead generation allows the buyer to narrow this profile down more than any other marketing medium. It is important to make sure all the right processes are in place to effectively use the leads when they are received. More often than not, success and failure is determined by these factors, not the quality of the leads. The same twenty leads can be given to different intermediaries and they will each have different experiences. The businesses that do best from lead generation are the ones that plan everything in advance.
In the end, a lead is information about a consumer who has expressed an interest in a product or service and consented to be contacted about it. It is not a guarantee of somebody who is ready to sign on the dotted line but it is the beginning of a relationship where businesses can attempt to sell their services. In other words, through buying leads, companies can purchase the results of marketing without having to spend such large sums.
Justin Rees is head of marketing at LeadPoint UK.
