When Buying Leads – It Pays to be Picky

Posted on | March 21, 2010 | No Comments

Nowadays the mortgage industry is saturated with lead companies selling anything from aged to exclusive mortgage leads. The advent of the Internet has made it much easier for companies to generate leads and competition has been fierce. But as with anything, when a market becomes saturated, the quality of service can decrease. That is why you need to be very selective when buying your leads. This article will discuss some proven tips that will help you get more bang for your buck.

Search out the industry leaders

When it comes to your time, you have to decide on value. That’s why you should focus only on the industry leaders. While there are various smaller companies offering compelling rates, you need to work with companies that have a proven track record for success. These are usually the top picks for leads.

Find company reviews online

Scatter discussion boards. Discussion forums are sounding boards for people who have purchased products or services in the past. The same applies to mortgage leads. Search forums related to the mortgage industry and find comments left by users who have purchased leads. Let past users tell you what’s worked for them.

Seek out credibility

When it comes to choosing a lead company to work with, nothing beats a proven track record. What is their average closing rate? How often do clients come back? What is the quality of their leads? These answers can typically be found through testimonials and case studies on their website. You can also use the discussion board technique to get the most unbiased opinion

Worry about price last

I know it sounds counter intuitive to tell you to save price for the end, but worrying about this other stuff will actually save you more money in the end. What many mortgage professionals fail to realize is that the price of a lead does not necessarily determine a good or bad deal. The price of the lead is relative to the quality and closing ratio of the leads.

“For example, let’s say you purchase 100 low quality leads at $2 each. Your total cost equals $200. However, you close only one of these leads giving you a $1000 commission for each lead. After deducting your expenses, you end up with $800 in profit.

Now let’s look at another example. If you buy 100 high quality leads at $10 each, your total cost is $1000. However, these high-quality leads give you a 3% closing rate (3 people buy).  In this scenario, you would get $3,000 dollars in commission and have $2000 profit after expenses.”

Therefore, you receive double the income by paying 5 times the price. The thing to remember is to evaluate the reputation of the company, then the quality of the leads and finally the price in order to really save money and profit in this business.

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