Archive for the ‘Affiliate Marketing’ Category

Making the Most of Current Economic Conditions

Wednesday, March 11th, 2009

Two second day LeadsCon panels (Kings of Counter-Cyclicality and The Future of Lead Generation – Getting to 2.0) touched on tactics that companies should follow in order to succeed during our current economic conditions.

Key takeaways include the following:

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Lead Exchange: The Future of Lead Generation?

Monday, March 9th, 2009

Our CEO, Marc Diana, participated in a discussion on the future of Lead Exchanges moderated by James Cham of Bessemer Venture Partners. Additional panelist included Anik Gagnuly, Board Member of Detroit Trading, Payam Zamani, CEO of Reply! Inc., and Keith Moore, Senior Vice President of Tree.com.

In starting off the panel, James asked each panelist to explain their company’s business model and the verticals they worked in. LendingTree replied that they were mostly mortgage but given the state of the mortgage industry they were branching out into areas such as loan modification. Reply and Detroit both said that they did the majority of their business in the auto sector. Marc explained that while LeadPoint began in mortgage, it has increasingly become a technology platform serving multiple verticals including Credit Card Debt, Education and Tax Debt. As a platform, the company is able to quickly support new emerging verticals.

Additional questions raised by the moderator included the following:

  1. How do Lead Exchanges differ from Lead Aggregators?
  2. What are the factors critical to the success of a Lead Exchange and what factors do you want to avoid?
  3. What are the factors that may be preventing lead buyers from working with your exchange?
  4. Is your exchange currently growing and what are your growth projections for 2009?

How do Lead Exchanges differ from Lead Aggregators?

In explaining LeadPoint’s business model, Marc explained that to succeed as a true exchange a company must earn the trust of both its buyers and sellers. To do this, it must act as an impartial intermediary between the buyer and seller, not favoring one over the other. It is important that both sides receive equal value for their efforts in a sales transaction. Reply CEO, Payam, added to this that exchanges provide dynamic pricing that enables every lead to sell. This liquidity ultimately helps provide sellers with greater overall payouts and provides buyers with greater value in pricing. Anik with Detroit Trading also noted that exchanges helped sellers by providing a single outlet for their leads and eliminated the hassles of having to collect monthly payments from numerous sources.

What are the factors critical to the success of a Lead Exchange and what factors do you want to avoid?

Marc discussed that quality and impartiality was critical to LeadPoint’s success. He discussed the company’s recent launch of the LeadClass Quality System which benefits buyers by enabling them to optimize their marketing spend by selecting the quality and price that best suits their operational needs and rewards top direct marketers with the true market value of their leads. The one thing Marc wanted to avoid was competing against sellers by having LeadPoint generate its own leads. Marc explained that if LeadPoint were to generate its own leads, it would no longer be a nonpartisan company and would go in direct competition with its sellers. Marc referenced his experience with LowerMyBills where he was one of the original employees who helped found the company. He explained that when a company generates its own leads it has an incentive to monetize the investment. This may lead to a preference of its leads over those of their sellers. Additionally, it may also adversely impact buyers as the company may push their internally generated leads on to buyers when it is not necessarily in their best interest.

Payam said that their success was derived from market liquidity and disagreed with Marc’s assertions (Reply generates their own leads). According to Payam, when a company generates its own leads within a vertical they have a more vested interest in the success of the vertical and are thus able to get it to a point of critical mass.

Keith with LendingTree said that their biggest success was building a brand with consumers. By delivering on the consumer expectation, consumers trust LendingTree and this enables them to deliver interested leads to their buyers. Keith stated that their biggest obstacle was predicting demand (Tree.com like Reply generates their own leads).

Anik with Detroit agreed with Marc that it was critical for an exchange to be a neutral third-party. As part of the duties of being a neutral party, Anik said it was critical for an exchange to provide transparency to both buyers and sellers.

What are the factors that may be preventing lead buyers from working with your exchange?

Keith said that non-Internet generated leads were their biggest competitor and that there was some understanding of how to work an Internet lead that prevented some customers from using their services. Overall, the strength of the LendingTree brand helped as many people are aware of how they generate leads.

Anik with Detroit said that sellers have the greatest reason to want to use exchanges as it allows them to reach many customers. More customers lead to greater demand and greater demand leads to higher overall prices for leads. Anik said that buyers have some skepticism of exchanges as they perceive they have less control in ruling out fraudulent leads. In fact, Anik says that fraud is something exchanges must pay close attention to as it has the potential to collapse a market. Overall, Anik feels that Lead Exchanges provide the greatest opportunity to provide buyers with exactly what they want as the diversity of sellers provides greater diversity in leads.

Payam commented that he agreed with Anik that an underlying buyer objection to Internet leads was that they did not trusting the quality of lead traffic.

Marc also agreed with Anik’s comment over buyers concern with quality and pointed out that this was the impetus for creating LeadClass. With a market blend of leads, buyers could not control the quality they received. However, with LeadClass now they are able to specifically purchase by quality. Marc also mentioned that there is confusion over the exchange term in lead generation. He believes that exchange by its very nature should mean an impartial entity. He does not believe a company can be impartial when it generates its own leads and thus should not be termed an exchange.

Are you currently growing and what are your growth projections for 2009?

Both Keith and Anik mentioned that the current market conditions were negatively affecting their companies. Lendingtree noted that the decline in the mortgage industry had impacted them and led to them branching out in other products such as loan modification. Anik said that Detroit Exchange (like the city it is named after) is suffering from the devastating slow down in automobile sales. He noted that business is cyclical and they are doing their best to weather a down cycle at the moment.

Marc, on the other hand, noted that LeadPoint is growing. LeadPoint’s growth is fueled by growth in Credit Card Debt, Tax Debt, Education, Voice products, and growth in their UK division. Payam noted that Reply was also growing but was less clear on what sectors were fueling this growth.

A difference of opinion occurred between Marc and Payam who both argued that each of their companies was the biggest leads exchange. Both companies are private companies and neither discloses their revenue figures. However, as LeadPoint is the top Lead Exchange in the mortgage business, the leading exchange in credit card, tax debt, education and voice it is hard to see how Reply is of equal or greater size than LeadPoint, especially given that by their own account their largest vertical is auto. However, arguing oversize is not of great importance, as size doesn’t really matter. What buyers and sellers care about is their return on investment. With the launch of LeadClass, LeadPoint has set itself apart from any other exchange for the foreseeable future in delivering value to both its buyers and sellers.

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LeadClass – Quality Taken to an All New Level

Wednesday, March 4th, 2009

Lead quality is a powerful term used in almost every conversation between lead buyers and sellers. “Our lead quality is the best on the market” or “Unless you can improve your lead quality we won’t be able to allocate additional budget to you this month” are phrases used with such frequency they have become cliché.

To date, lead quality has been delivered through only partial solutions. These include the following:

1) Filtering – This method helps to optimize lead purchases by allowing buyers to select only the leads that fit their criteria. With mortgage leads, this may mean buying leads only in Texas or those with excellent or good credit.

2) Source Optimization –This technique enables a buyer to evaluate and create a ranking of sources based on ROI or a related metric.

3) Contact Information Verification, Validation and Correction – This process runs leads against blacklists, and 3rd party and proprietary databases in order to determine whether the contact information is accurate and the likelihood that the consumer can be reached.

While these methods all address pieces of the lead quality process, individually, none of them offers a complete solution in understanding a lead’s value.

Filtering:
Company “A” filters leads based on every possible attribute. While the company can purchase a lead that perfectly matches their parameters, there is no guarantee that the lead is delivered in real time, is sold a limited number of times, or provides the address of an actual person.

Source Optimization:
Company “B” diligently performs source optimization each month, but due to small sample sizes and intra-month performance swings by sources, it is never able to capitalize on this hard work.

Verification and Validation:
Company “C” purchases leads from many sources and passes them through a 3rd party database to validate consumer contact information as well as filter by desired attributes. Further, it does a monthly review to determine which of its sources yields the best ROI. Unfortunately, it discovers the following: even its best lead sources provide a fair portion of poor quality leads and as Company “B” discovered, various sellers perform hot and cold intermittently throughout the month. Thus, even with the use of a respected 3rd party database Company “C” still will spend money on poor quality leads.

While the above scenarios paint a bleak outlook for buyers seeking consistent lead quality, there is a solution!

LeadPoint is pleased to announce the launch of the LeadClass Quality Program a revolutionary lead quality scoring system.

LeadClass addresses lead quality in a real-time holistic manner. LeadClass combines the above three processes into a single comprehensive solution. By applying industry-leading filters, contact verification and real-time source scoring, LeadPoint offers lead buyers the choice of lead type [Premium, Certified, Value] that best works for their organization – an industry first.

Click here to learn more about this innovative new solution to lead quality.

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