Mike Simonsen has a post over at Altos Research about potentially tough times at LendingTree. His article stresses the concern in their being an incumbent, slow moving old style lead machine that needs volume of traffic to survive. Mike’s point was that while Tree (as it is now known) has several decent web properties that drive traffic such as RealEstate.com and LendingTree.com, most of their sites are marginal and don’t garner the level of volume needed to survive effectively against new competitors.
I would argue that if LendingTree looked at their business model in the same fashion that other lead generators do– volume, traffic, media buying, lead distribution, etc. this would be a valid concern. While all of these are important to the overall method of doing business, having worked with them on many initiatives, I would say this is fundamentally different than the way they view their business.
LendingTree views their model as a service to their clients. This is important–this is the language they use when discussing leads–in fact, that word doesn’t even come up. They are offering choices to clients and hold their distribution network as well as client servicers (lenders) accountable for proper service.
Compound this high level of service with the protection around their brand– (Who doesn’t know who wins when banks compete?) and you get a much more advanced level of inquiry generation. The numbers prove this out. A review of LendingTree’s application rates on LeadMarketWatch consistently indicate a high level of performance and satisfaction by clients and buyers.
If LendingTree was only concerned about how to get traffic, I would be concerned for them as well. but knowing how they protect their clients and the service they provide, I believe the brand is strong and will handily endure.
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