Lead Arbitrage Scam or Entanglements of a Small Industry

Truth be told, the Internet lead generation pond is pretty small. The Lead Critic spotlights a recent suit brought by LG Technologies against several former employees and then, as lawsuits tend to do, digs into the deeper pockets of Marc Diana, LeadPoint, and Breakwater Ventures.

I won’t go into all the details here–no one is currently indicted, charged, or otherwise proven guilty. Allegations are often like opinions, everyone has one. If this story is important to you I suggest you either review LeadCritic’s write-up or read it straight from the court documents.

Here is what is important to lead buyers–LeadMarketwatch.com’s most important audience:

• Online lead generation is a very competitive space
• Competition breeds scams (look at the mortgage industry right now, a fraud a day)
• Getting wrapped in the inner-drama is a waste of time
• Doing due diligence, measuring, and testing every lead buy is very profitable

Now let’s get to brass tacks on this scenario, as a lead buyer. If you purchased any of these leads, from LG Technologies or LeadPoint and you were following lead buying best practices you and the customer would never be hurt. Here is my logic:

• You did due diligence with no red flags; then
• You start buying leads from LG Technologies and/or LeadPoint; then
• You get the leads and start calling and aggressively following up;
• You are doing right by the consumer that inquired about the product or service; but
• What if the “recycling/arbitrage scheme” was causing the leads to be over sold?
• Good metrics would instantly show duplicates, declining contact and conversion, and complaints; then
• You quickly move to pause, shut-down, or remove source bids

The lesson here is: do your due diligence, make sure your sales process is tight, and measure relentlessly.

Now It’s Your Turn

What are your thoughts and perspectives?

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Tagged as: Best practice, Due diligence, Lead Generation, leadpoint, marketing, Marketing and Advertising, sales process