• understanding pay per lead marketing techniques
• creating an appropriate sales process
• evaluating and selecting a good lead provider(s)
• optimizing your lead buying to your business 
  
• tracking your leads and tracking your sales

Determining if pay per lead is a marketing strategy fit for your mortgage business is a simple 5 point plan.

Understanding Pay Per Lead

Performance marketing, often simplified to pay per lead, is a grouping of many marketing techniques that ultimately produce a customer inquiry or lead for sale. Lead generation is increasingly the preferred method of purchasing marketing service, particularly for businesses like mortgage and real estate. Pay per lead mortgage programs can be an efficient way to pay specifically for an inquiring borrower or homeowner. 

Paying for an already generated lead actually accelerates you deeper into the sales funnel, creating the need for a unique sales process. Understanding how these leads are generated and what you will be receiving is key to optimize both your lead buying and sales process. 

Typically, although many marketing techniques may be used, most lead providers will use email marketing and paid search (or a combination) to generate a mortgage lead. Either of these methods require a lead generator to possess scale and efficiency to deliver you consistent results. Each of techniques accomplish the goal of acquiring leads in a similar fashion, engaging prospective mortgage consumers (email recipients or Web browsers) with a brief offer or value that entices them to submit a brief amount of contact and financial information. The result is a prospective borrower or homeowner that has raised their hand to talk to a mortgage loan officer.

Creating an Effective Sales Process

Any new marketing channel is going to require adjustments to your sales process. However, buying Internet leads is most likely going to require some radical refinements. When you begin buying marketing that are already leads, customers who have already made their inquiry, you are jump starting your sales entry point much deeper into the sales funnel. This results in a greater since of urgency considering this customer is already waiting for a response. 

Because leads are already captured customer inquiries you need to be prepared for frequent follow-ups to make initial contact, prepared to present specific loan offers, and minimize the customer’s time/hassle to close the loan. As you can see purchasing leads accelerates the expectations of the customer, and if done properly the velocity of your sales.

However, to accomplish this you need a system–a lead management system. Most often this is in the form of software or service designed specifically for mortgage lead management, but an adequate process can be created on a smaller scale with email lead receipt and spreadsheet sales tracking. The important thing is to ensure you have some system account for and manage each valuable lead purchased.

Selecting a Lead Provider

With a solid understanding of how pay per lead marketing works and your lead management system in place your next step is to find a good lead provider. The key to finding the right lead partner is lots of questions. Here are some to get your started:

• Validate business address, contact information, and business (mortgage) licenses
• How do you primarily generate leads?
• How are the leads I am buying generated?
• Do you only generate mortgage leads? If not is it the core of your business?
• Do you have return policy?
• What are some of the best practices I should follow in working your leads?

There are a lot of lead providers, and generally beyond the top 10% there is a steep decline in quality, so make sure you do the simple background checks too: Google business names, websites, and principles as well as ask colleagues their opinions, recommendations, and perspectives of lead providers you are considering.

Optimizing Lead Buying

Buying the right leads for your mortgage business is almost as important as your sales process in converting them into loans. It is critical to match your lead buying filters to your state licensing, loan programs, and any credit or program niches you may have. Lead providers typically have very robust filtering options, take advantage of that ability to target. Talking to the right customer is more profitable than just calling a lot of people.

Also, make sure that you are buying the right quantity of leads. Although you may be tempted to just turn on the fire-hose (and most lead providers would be happy to take your money) it is important to remember you are trying to build a stable and consistent pipeline. So, start with quantities of only 3-5 per loan officer per day and really work them hard. This will allow you to learn and  maximize your opportunity to convert.

Sales Lead Tracking

Tracking your leads will not convert more leads to loans, but it will dramatically increase you ability to optimize you lead buying and sales process. By simply tracking when you contact borrowers and the actions you took you will quickly see trends. Trends relative to the best lead providers, the best lead types, and where your sales may be falling out of the pipeline. 

Observing and tracking every step in the lead lifecycle within your lead management system will pay enormous dividends. Being able to see what works and what doesn’t will quickly focus you on what leads to buy, what leads to dump, which sales processes to blow up, and which processes to ditch.

Pay Per Lead is a Proven Mortgage Marketing Strategy

Buying mortgage leads, even building the core of your mortgage business around this strategy, is proven. However, success will be frustrated if you do not prepare your organization and culture for the adjustments it requires. This marketing strategy is not for everyone, but if you select it to be a part of your mortgage business prepare.

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We have been getting a lot of request from our Lead Buyer Readera to dig (Digg Us, that’s a good idea too) a little deeper into the Lead Provider’s listed in the Top 5 on Lead Marketwatch each week. So, here you go:

5. ZipSearch.com, is a consistent top 5 mortgage lead provider. They are a privately held company founded in 1995, and continues to be, lead by David Schneider.

They are a strong search and email marketers with an excellent inventory of web properties. Recently, they have invested their resources in improving niche offerings in FHA/VA leads. One of the things a lot of our customers praise ZipSearch is the investment they spend on qualifying their leads with TargusInfo and other data services to ensure data accuracy, loan limits, and 14 other qualifying metrics.

Another “feature” our male mortgage brokers are raving about is the notable addition of the ZipSearch! Girl.

Learn More About ZipSearch…

4. GetSmart.com, was acquired by LendingTree back in 2003, most likely, has a defensive strategy to growing short form powerhouses like LowerMyBills. Traditionally, it has been common wisdom that short-form leads performed worse than long-form leads simply based on the commitment level of the consumer to complete the application. However, this wisdom may be changing with tighter credit policies and heavy volatility in rates and qualifications. GetSmart, bolstered by new highly motivated and experienced new leadership is showing consistent and growing quality in this format. Combine that with the strength of the LendingTree brand awareness and customer loyalty and you can see why there conversion is solid.

Learn more about GetSmart…

3. LowerMyBills.com, has always been a dominate player in the mortgage space and have a overwhelming market share in the mortgage broker business. They are infamous for their nonsensical dancing ads that just beg to be clicked. Although their lead quality has never been considered to be their strength, instead being known for consistent volume, that seems to be changing. They have been adding additional quality checks and getting a lift from their recent addition of credit banding, no doubt with expertise from their parent Experian.

Learn more about LowerMyBills…

2. NexTag.com, is a relatively new feature within the Lead Marketwatch Top 5, but figures to remain strong. As one of the top comparison shopping sites, they are flush with an endless supply of consistent Web traffic. Their mortgage business has traditionally been modest, compared to their other businesses, but with a recent private equity capital infusion they are seem to be moving in to acquire high quality media positions at a discount.

Learn more about NexTag…

1. RootMarkets, has been a bit of a confusing company to follow. They have transitioned from a far leaning strategy of a customer controlled “attention” or lead (much like the current approaches of Zillow Mortgage Marketplace and SmartHippo [disclosure: I am a member of the SmartHippo advisory board]), through attempts to help large publishers monetize their content more efficiently, back to the core vision of their high profile Chairman Lewis Ranieri of a trading exchange for leads.

The lead exchange is a bit of a different model from the other lead providers in this list in that RootMarkets is facilitating the marketplace for mortgage lead buyers and lead generation sellers. The result is a mortgage lead system that can allow you significant flexibility in trying various sources, price points, and types of mortgage leads and lead providers.

Overall, the renewed focus on the lead exchange part of their business has obviously been reflective of their rapid rise to the top of the Lead Marketwatch and should be a big advantage to their mortgage brokers’ business.

Learn more about RootMarkets…

Disclaimer: The Lead Marketwatch is a real time observation of mortgage lead application rates during a defined rolling measurement period. These mortgage lead provider application rates are the actual ratios experienced by mortgage loan officers within the Kaleidico network mortgage of lenders. All reported lead providers must have sourced at least 100 or more leads during the measurement period. Your actual performance rates with lead providers may vary from these benchmarks for a variety of reasons. 

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• Corporate Name
• Principles
• Length of Time in Business
  
• Corporate Location and Contact Information
• Website(s)
• Any Past Complaints (and Types)

Not only will this give you a solid contact file for dealing with the lead provider, but it will also give you important questions to ask. It is important to understand that a company can not prevent people from filing complaints, and many may not even be legitimate, but they should explain to you how they have resolved any issues filed.

What Do Others Think

In a world of Web forums, blogs, and Twitter finding out the general perception of a company or lead source is only a Google search away. Here are a few sample resources and searches:

• LeadCritic Blog and Mortgage Lead Forum
• Mortgage Leads Directory
• Discussion of Mortgage Leads on Twitter
  
• Google Blogsearch for lead providers or try a specific lead provider

Once you have selected your lead provider or have a couple you are considering make sure you set up Google Alerts on each of their names to keep track of new developments (good and bad) or new innovations.

Stability of Web Traffic

This is a key indicator of stability and quality within a lead provider’s marketing programs. Unfortunately, it is difficult to fully research, but I will give you a few tools and suggestions. My affiliate readers probably can suggest more, this is competitive intelligence they do everyday. Other ideas guys? Leave a comment.

The key to this metric is to really zero in on the sites a lead provider uses to generate consumer mortgage leads. Often this is not their home page.

For example, if you wanted to investigate using Adchemy as a lead provider, www.adchemy.com is irrelevant to your lead buying. However, you should be interested in www.ratemarketplace.com–this is where consumers looking for mortgages end up:

Another example would be ConsumerTrack. If your are considering this lead provider looking at www.consumertrack.com is not helpful, but measuring www.gofreecredit.com would show you very strong web traffic:

The key to analyzing these charts is stability. You want to see consistent traffic levels or steady measured growth. Rapid swings up or down could can significantly effect the quality of the leads you are receiving. Both of these examples, above, are exactly the kinds of results you want to see from this test.

Will Customers Find Them

This is another great test for determining who you want to buy leads from. Act like a customer. Imagine yourself looking for the best mortgage or mortgage lender. Who do you find?

Here are a few of the consumer queries I like to try for this market:

• Do I qualify for FHA
• Can I refinance
• Lower my mortgage payment
• Refinance adjustable rate
• Get a mortgage loan
• Can I get a mortgage
• What’s my credit score
  

The important thing to note here is not only who is purchasing the paid search locations, but also who is ranking in the organic results. Also, take a look at the landing pages or sites and see if they are professional and compelling. Would you as a consumer feel comfortable submitting your personal contact and financial information?

Again, remember many lead generators do not generate leads from their corporate website. So, when you find none lender websites and landing pages in these results dig around (generally in the footer links) and see who owns the site.

Do Their Leads Fit My Products

This is probably the most often missed criteria in selecting a lead provider you will have success with. Do an inventory of your state licenses, loan programs, and expertise. Do a few searches to find the lead providers that are capturing these inquiries:

• Refinance mortgage San Diego, CA
• FHA mortgage loan
• Bad credit mortgage
• High credit low rate mortgage

Vendor Management of Lead Providers

Once you have done this research make sure that you store each mortgage lead provider profile and routinely re-evaluate the results along with your evaluation of their performance within your mortgage operation.

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When I was tipped off about the LendingTree security breach and went to research my initial coverage there were only about 3 Google search results for the incident including the original LendingTree tip. But, then they made a wrong turn in crisis online reputation management.

In my mind, LendingTree did a great job managing the early crisis:

• They immediately notified and educated potentially effected customers.
• They publicly posted this letter to customers
• They posted a very detailed Frequently Asked Questions about the incident

These initial steps insured the public could consult the facts, not the Web spinAs a result, the early coverage was light and generally low key. The majority of the news focused on their prompt notification of customers and their legal actions to hold the collaborating thieves in the breach accountable. Both, good themes and still the mainline news coverage of LendingTree. Even the blog coverage of LendingTree was fairly benign and positive.

But, yesterday lawyers thought it prudent to send letters to bloggers, which is guaranteed to spin this fading incident into another, more negative direction.

It starts with (most likely) a disgruntled former LendingTree employee going on a posting spree on blogs covering the LendingTree incident–to get his retribution on LendingTree in a weak, public moment. Then, LendingTree counsel, in their diligent following of the online discussion finds these comments and decides to leap into action to defend the brand–”let’s send a letter and get the bad stuff erased.”

In doing so, they violated the number one, tried and true, mantra of Internet discourse and  conversation–Don’t Feed the Trolls!

Now, LendingTree is left with a swelling and festering negative online conversation driven by “Seniorexe.”

My recommendation? Send a brief note to all bloggers you sent your first request to and thank them for their consideration of your request and wish them the best in their future online journalistic endeavors. Then read the information below.

Required reading for law students and practicing attorney–participating or trying to control online market conversations:

• Don’t Feed the Trolls!
  
• The quintessential Digg case study. Digg v. HD DVD hack.
• Cease & Desist Letters drive tons of free Web traffic to previously small audiences
• How Not to handle online reputation management in a crisis

Any other suggestions for LendingTree?

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Recently, LendingTree learned that several former employees may have taken Company passwords and given them to a handful of lenders. These lenders then used the passwords to access LendingTree customer information files, normally available only to LendingTree-approved lenders, to market loans to LendingTree’s customers. The files contained loan request data such as name, address, email address, telephone number, Social Security number, income and employment information.

What are the early reactions to this incident?

Media

Early coverage was light and mundane. Best represented by a local article in the Charlotte Observer.

Competitors

I thought that this press release on identity theft from Bankrate.com was very coincidental (timed?) .

Mortgage Lenders

One current LendingTree lead buyer, felt like it was well handled and would not create much impact.

Another former mortgage lender and lead buyer just felt like it was likely a common occurrence at many notable online lead providers and within the technology departments of lead buying mortgage lenders.

Customers

Some think that consumers rarely change their online behavior because of these incidents. This is my opinion and experience too.

Blogs

There seems to be more concern and angst here than anywhere.

Your Thoughts

Is the concern out of proportion? What are the ramifications, if any? To consumer? To the online lead generation market?

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“Traders” will profit from the Zillow Mortgage Bourse. Armed with the data byte that announces consumers’ intent, traders will be able to act quickly, provide HUGE tangible net benefits to the borrowers, acquire long-term clients, and lower their marketing costs.

And Owen Raun tracks, with excellent data and detail, the results of their efforts in the marketplace…

• The first few hours learning Zillow Mortgage
  
• The next few hours in the Zillow Marketplace
  
• Some first week suggestions to Zillow
• Honeymoon is over it is time to make this dog hunt (that means make money!)

The obvious conclusion is that making a marketplace is hard. Particularily, when the trading involves an infrequent and complex transaction, as Sean Purcell points out on the BloodHound Realty Blog.

However, as hard as it is, I am impressed by Zillow’s willingness to be transparent and continue to innovate the process.  For example, one of the early complaints is the low percentage of responses from quoted customers, causing loan officer fatigue and sacking motivation. This may be helped by the announcement of Zillow’s exposure of loan requests in a search feature, possibly filtering “window shoppers” into searches for indicative quotes instead of requests for quotes.

The synthesis of the early feedback on this innovative initiative seem to boil to a few key points:

• Creating a new marketplace is challenging
• You have to quickly achieve a good balance of motivated buyers and sellers
• Filtering/policing disengenious buyers (window shoppers) and sellers (low ballers) is critical to building value and credibility
• Transaction transparency builds confidence and helps manag expectations

The critical factors for success, in my mind, are how fast can Zillow tune the marketplace to:

• Maintain and grow transaction volume (buyers and sellers)
  
• Lift quote to call back ratios (continue to innovate segmentation system)
  
• Mature the reputation management system

Again, I see good opportunity.

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Today, Kaleidico launches in closed beta a free lead management system built on Twitter–SalesTwit! The premise is simple, built on the following observations:

1. Most sales occur outside of CRM or lead management systems
2. Typical CRM or lead management is laden with features and settings that distract us from sales
3. A sales person only needs a small amount of information to initiate their conversation with a customer
4. If you want anyone’s attention these days you need to be in their “life flow,” which means cell phone, instant messenger, and email

And, this is how we responded with SalesTwit!:

1. Threw away the software that constrains you to one application or user interface
2. Only include the really important stuff–receive a lead, note a lead, track a lead, see how I am doing
3. Limited the sales twit (through Twitter) to 140 characters–name, phone number, email, product, and link to secure website with full lead information
4. Built it on Twitter so you can work leads wherever you are–cell phone, IM, email, Twitter client and get back a tracking note and status
5. Made sure you could still use any lead provider, load a lead file, or work your electronic address book

I guess it only seems fitting that the fundamental idea of SalesTwit! can be boiled down to 140 characters:

Go give it a try: follow salestwit and then sign-up www.salestwit.com

Use invitation code: lmw

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However, I was just pointed to a tool yesterday that may take some of the surprise out who’s (at least among FDIC-insured banks) mortgage portfolios are impaired, relatively healthy, getting worse, getting better, and if the risk is large enough to materially effect the overall financial health of the institution.

This demostration of OSG Technology’s Boomerang, uses publicly available and captured required FDIC reporting from banks to visualize their mortgage portfolios and put in motion internal and relative mortgage portfolio trends.

Here is a sample that I ran on 90+ day lates from this demonstration:

Try some of your own evaluations of top bank’s mortgage risk, and see trends and potential concerns in motion.

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As you may remember we had this discussion all the way back at Leads2007:

TODOs

These major themes drove this group to commit to three major initiatives:

• Internet Leads Best Practices Whitepaper
• Collaborative Organization or Association
• Lead Feedback Standard

If you would like to participate in any of these initiatives comment below or contact bill [dot] rice [at] kaleidico.

Since, we received no response, and don’t need to be asked twice to add value to our market, Kaleidico stepped forward to create and launch a test implementation of the a closed-loop lead feedback standard. The finalized API will be openly published in the next few weeks. Until then integrations are underway with existing lead partners.

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A vertical search engine for the Black Community. Here is the description from the About Us page:

Launched in April 2008, RushmoreDrive is a first-of-its-kind search engine for the Black community. We deliver a blend of mainstream search results plus a layer of more relevant search results influenced by the Black community. RushmoreDrive is where the Black community goes to find the best search results.

At RushmoreDrive you will also find a feature-rich job networks community where members can create a professional profile, find job opportunities, and create job networks online. RushmoreDrive’s easy-to-use job networking tool will help members unlock the power in their professional connections.

RushmoreDrive News enables the Black community to find news headlines from the entire World Wide Web, including well known Black media, blogs and countless relevant online voices, as well as recognized mainstream news sources.

RushmoreDrive is the starting point and the destination for its users to find what is most relevant to the Black community.

Looks like the technology leadership comes out of the LendingTree and GetSmart operation, according to the press release in their media room:

Brad Gebert, Vice President, Technology – A proven technology expert, Mr. Gebert brings outstanding experience as a Technical Development Manager to BWE to lead application development and ensure that the business will run on the most advanced technological systems available. Brad also brings to BWE a keen understanding of IAC’s brands, having spent 7 years prior at IAC’s LendingTree and GetSmart.

Thoughts on IAC’s latest move?

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