Importance of Diversifying Your Lead Sources

September 9th, 2010

Experienced investors recognize the importance of having diversity in one’s portfolio.  Invest in just a few stocks and run the risk that the poor performance of one company could have a disastrous impact on the performance of one’s entire portfolio.

Similarly, in business it makes sense to diversify with one’s vendors. For example, auto manufacturers nearly always have a couple component suppliers.  If one supplier has issues, the auto manufacturer doesn’t have their manufacturing come grinding to a halt.  Additionally, by using multiple suppliers it provides the manufacturer with greater flexibility in picking up volume from another supplier should one of his suppliers go down.

The importance of lead diversification has received a great deal of attention over the last few years.  Online advertising is constantly changing with advertisers regularly applying new strategies to reach customers.  Offers are continually being tweaked to improve consumer response and the performance of leads.  Recently government compliance issues have come into play, dictating what marketing tactics are appropriate.  Current events also play a role.  For example, changes in interest rates or swings in the economy impact both the quality and volume of leads that advertisers generate.

Given this state of flux, it intuitively makes sense to use a variety of vendors (which you should carefully track) to ensure that you receive both the volume and quality you need.  When a given source regularly provides better quality, you can increase supply from this supplier and decrease supply from lower performing sources.  This provides freedom to shift volume in order to capitalize on quality changes while also protecting yourself from unexpected volume declines.

The stock market with its liquidity is a perfect example of a sector where companies purchase and sell stocks based on their relative expected performance at any given moment in time.  A key reason for the liquidity of the US stock market is the low cost of buying and selling stocks.

With its revolutionary lead gen trading platform, LeadPoint provides liquidity in the buying and selling of leads.  One way it accomplishes this is through the low cost and ease of adding and removing lead vendors.  Traditionally, when adding lead vendors, buyers have to deal with a variety of costs.  For one, there are contracts that need to be signed with each vendor.  Second, there are integration issues requiring engineering work.  The list goes on.  When all these costs are totaled, they often eliminate any benefit of bringing on a new vendor.

The hindrance of being able to add new vendors has a hidden cost of also negatively impacting market innovation.  If buyers become less inclined to test new vendors, existing sellers have a tendency to become complacent.  The less fluidity in the market, the less pressure lead vendors feel to compete, thus the less inclined to innovate and improve the quality of their leads. There is also less downward pressure on price.  In a fluid market, competition drives prices down and quality up through competition for a buyers business.

By creating a fluid market for leads and lead vendors, LeadPoint helps both buyers and sellers.  Buyers are rewarded by being able to purchase directly from specific top lead sources and diversity their vendor portfolio.  By tracking the performance of sources they are able to allocate budget to the sources that perform best for them at a given point in time.  Top performing lead sellers are rewarded as they have greater access to a larger numbers of buyers who can more easily shift their purchasing to them.

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The benefits of leveraging a lead platform in the UK

June 8th, 2010

Justin Reese, Director of Marketing for LeadPoint UK, writes in an article for iMedia Connection on the benefits of using a lead platform along with other lead gen trends within the UK.

The upcoming publication of the IAB’s Online Lead Generation Buyers Guide is a watershed moment for the fledgling UK online lead generation industry and will give advertisers a handy reference guide to help get their lead generation campaigns off the ground. The guide covers everything a prospective lead buyer needs to know right now, but what does the future hold for online lead generation in the UK?  The market is growing and evolving at breakneck speed with new developments occurring on an almost monthly basis.  The following are a few of the central trends.

The platform play

You buy leads, you supply leads but how do you manage multiple campaigns across multiple verticals simultaneously? Easy — you need an online lead generation platform.

Whether you are a lead buyer, a lead seller or an agency, the increasing need for transparency, efficiency and tracking are making the lead generation platform an increasingly attractive proposition. From digital insertion orders, real-time reporting or just the ability to manage multiple suppliers and buyers in one place, a platform can add real value to all the stakeholders in the lead generation value chain.

By making the whole lead generation process more efficient a platform has the potential to deliver huge cost savings. Imagine a life insurance company buying 1,000 leads per week for £40 per lead from 20 suppliers. With these volumes there will always be an element of duplication as consumers fill in multiple forms online. Most advertisers end up paying for everything, which means paying for the same lead more than once. Even with a duplication rate as low as 5 per cent that’s still over £2,000 wasted per week, which is over £100,000 per year. Loading these 20 suppliers into a platform that can de-dupe in real-time can be very cost effective so it’s no wonder that many advertisers see these types of platforms as the future of online lead generation.

The Americans are coming

They invented it, they perfected it and they even have LeadsCon, an annual conference in Las Vegas dedicated to it, but up until now American involvement in the UK online lead generation industry has been limited. In many verticals, they have been more casual observers rather than major players. But over the last year or so, there has been an increasing interest from the American lead gen companies in bringing their knowledge and experience over to the UK market and showing us a few tricks. From increasingly sophisticated methods that generate leads from social media sites to the use of online video to help improve form conversions, expect to see more of these types of developments make their way across the Atlantic along with a few of the companies that perfected them.

If you thought data leads were good…

For high value verticals like financial services, many advertisers buy leads to put into a call centre to try to convert into a sale over the phone. Even if you work with the best suppliers in the world with the best technology, there will always be some degree of wastage — perhaps the consumer just doesn’t pick up the phone or they didn’t read clearly enough that somebody would call them if they submitted their details so were just looking for an online quote.

Either way, it can cost a significant sum to process these types of leads. For many of these high value lead products there is an increasing demand to buy voice leads as well as or instead of data leads where you pay a premium but have a guaranteed contact.

Up until now, this market has been filled by call centres cold calling old data and then hot-keying interested consumers through to the advertiser’s own call centre. The downside is that often the consumers are pushed through without really having much interest in the product and the end results are more contacts but also more wastage. And finally, the next big thing in terms of voice leads is where the consumer is initiating the contact — i.e., they are responding to marketing and instead of filling in a form to be contacted, they dial a number and their call is then routed to the relevant advertiser with each valid call paid for on a cost per call basis. Again, this is big business in the US — expect to see this execution making waves on this side of the pond over the coming months.

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It is nice to get recognized and to have a seller partner recognized too!

April 14th, 2010

We at LeadPoint work extremely hard to create a marketplace that successfully delivers quality leads to our buyers.  The basis for this is that happy buyers increase their orders which in turn reward the marketing sources who submit the leads into the market.

You are able to tell that your work is paying off as revenues for your company grow as a result of buyers increasing their lead purchases and sellers increasing the volume of leads they submit into the market.  It is also nice, however, to be recognized from time to time by a neutral third party.  This was the case of a recent article by Michael Ferree in his popular lead gen blog LeadCritic.  In an article called “Quality Companies do Rise to the Top,” Michael writes:

“I surveyed 4 significant lead buyers (in the mortgage space) which constantly mentioned receiving excellent quality leads from LeadPoint, QuinStreet, MortgageLoan.com  and Adchemy. I know first hand that these companies employ leaders in the space that care about the consumers’ experience, lead quality and the lead buyer. If you are in the mortgage space you should take a look at these companies for leads.”

While it was great for LeadPoint to be individually singled out, it was also exciting that one of our top lead providers, MortgageLoan.com, was recognized as well.

Up until recently, lead buyers have traditionally only been able to purchase a market blend of leads through the LeadPoint exchange.  With a market blend, if a buyer creates an order for 2,000 leads, he/she might receive 250 from Source A, 100 from Source B, 25 from Source C and so on.  LeadPoint carefully measures the quality of each lead and the quality of each of our sellers to ensure that the overall performance of the market blend meets our high standards.

Based on interest from both buyers and sellers, we have added functionality that offers greater transparency providing buyers with the ability to purchase leads directly from specific lead sources.  MortgageLoan.com is one of these sources.  They submit leads into our market blend, but we also enable buyers to purchase leads directly from MortgageLoan.com from within their LeadPoint account.  Thus, of the four sources that Michael mentioned, two of them involved LeadPoint.

Offering the ability of purchasing leads directly from specific sources is an important innovation of the LeadPoint marketplace.  It supports LeadPoint’s goal of providing greater transparency and of being a single destination for all of one’s lead buying needs.

As a single market that offers numerous lead sources, we greatly simplify the lead buyers’ efforts to test new lead sources and optimize orders based on the sources that work best for them.  Having strong partners like MortgageLoan.com who are developing strong brand recognition for their quality is important in this endeavor and we look forward to more of our strong sellers getting the recognition they deserve as they develop their own brand identity within our marketplace.

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