Recently LMB has been exercising what we have mentioned here as a fire sale. Well apparently they are not giving this type of treatment to everyone, but that is a separate post all together. They are offering heavily discounted rates on all their products though, sometimes up to 75% off their regular prices. By doing this, I assume they are trying to keep the number of buyers on their platform for future sales at an increased price point. But here is the problem that I see. Starting at the end of Q3 of last year I began seeing a decline in conversions with their leads. The decline continued until it was unacceptable and therefore many were forced to decrease volume significantly. I spoke with other lead buyers and this was the case. The reasons could be many, but at the same time are somewhat unknown.

Fast forward to now. LMB is currently offering prices that are very hard to pass up and many buyers are tapering back on quality providers to take advantage of these low prices. Some shops may be experiencing a tough refi market and see this as a blessing, but here is the issue. Lead quality has not improved!! The lead buyer that is focusing more on price and not quality will be inevitably shooting themselves in the foot.

Now I have heard numerous stories of this happening and it is hard to pass up, but can it hurt overall company performance?

If a single lead source becomes saturated within the company and the lead sources performance is weak, how will that affect the overall moral of your sales team?

Is LMB trying to hold onto their market share by a shoe string? Simply lowering their prices to a level where quality/smaller shops can not compete with, instead of delivering quality leads maybe detrimental to the numerous parties involved. Not allowing the natural growth of market share based on a quality product is a clear repositioning of its grip on the lead market. Will they be able sustain this grip until their quality increases or will we all go down with the ship. (A little dramaticJ, but still these are questions to be considered)

In the press release Jeff Solomon states:

“If a company has a salesperson that excels at closing leads of a certain age, gender or geographic location, the program allows that salesperson to pull the appropriate leads first,” Solomon said. “By boosting each team member’s comfort level, as well as the ease of communication between the salesperson and the lead, the result is a more consistent and disciplined sales process.”

Definitely a great idea however this would be considered a direct violation of the Fair Housing Act, Sections 805 and 806, oops!

• I filled out the form on Tuesday of last week
• Received emails and phone calls the day after from 6 confirmed companies. My VM was breaking up on 3 other messages so I could not confirm if they were separate companies or not. So possibly more than 6 companies called
  • Each email I received referenced a different company or website in which I filled out the form. None mentioned the true website that I filled the form on. (How is this supposed to help the lead buyer build rapport with the customer? It’s tough enough already.)

• One of the emails was from a company (Lending Universe) stating that they were going to be giving my information to 4 lenders. I am not sure if this is the company that actually received my information and was the owner of the original website, I don’t think they were. I investigated the site of which I filled the form on and traced it back to a company in
  Colorado that goes by the name of Nolan Micro, also known as Yourleadsource.com. It looks as though Nolan Micro also sells their leads to other aggregators and acts as an affiliate.
  • I am not going to mention who the companies were who called me, but I do want to mention the companies that they said they received the lead from:
    •  MoneyNest, mLeads, Nolan Micro were all stated sources of my lead. The following are the webpage’s they mentioned in the emails, which none were the actual site that I filled out the information on: mortgagerates4less (another Nolan Micro landing page) and lowratemortgageplace.

Here’s the bottom line:

Companies that use affiliates or email marketing are more likely to have these issues: over sold Leads, unknown origins. 

This scenario happens everyday and apparently we are expected to just except it. Well I am here to tell you that we don’t.  When a company is buying from an affiliate they will never be 100% positive that the affiliate is not sending the information to multiple aggregators. This is an ongoing problem and needs to be eliminated. Some type of regulations needs to be placed upon lead generators.

I just over heard one of my LO’s speaking with a client (on speaker phone) today and the client was telling him that he will never go online again because he received more calls then expected. Sure we are going to call the lead until we are all blue in the face, but we have the right too, we paid for the lead. However if the lead is being sold more times than stated to the consumer the amount of calls multiply exponentially and with every extra call the mortgage lead buyer looses creditability. Especially when the consumer is receiving an email stating that a website or company that he has never heard of is selling his personal information.  

Lead aggregators need to start thinking about what is best for the industry and not their pocket books or better yet how they are going to stay around, because if consumers loose faith in the process we will all suffer and they will not be in business.I am sure there are providers that generate leads via email marketing or have affiliate relationships that are good stand up companies, but if they are not going to be completely transparent and show their email marketing pieces to us or disclose their affiliate relationships, forget it. I will not do business with them. If they tell you that it is proprietary information well than fine. They can take their proprietary information else where. There are too many good lead providers out there that would love to have my business and would be happy to disclose how they generate leads.

The saga continues…I am sure I will receive more calls and emails from different companies not already accounted for.

 I will keep you posted.

The previous month (Febuary) LendingTree was number 1 in total spend and LMB came in second. In January LendingTree was first again and LMB came in at number 5.

According to the March report they are not even in the top 50. It looks as though the lead providers are making the appropriate changes to compensate for the lower demand.

Are price increases on the horizon?  

I suggest you take a look and listen.

Here they are>

According to a Juicy Lead rep many of the leads that are going into the Icosales system are from the state of Ohio. At This point you may to revert back to the “Over and Under” post. It also brings up the inefficiency of the Marketwatch widget. Unfortunately at this time the widget does not grade providers, it only shows their app rate. So the amount of leads purchased and the states in which they are purchased are not taken into account.

I currently have my own lead quality tool that I use to generate my Top Five lists. It’s based on a scoring system. It combines a weighted score for each key component, average loan amount, average gross, ROI, and conversion ratio. Each is weighted differently according to what I think is more important. For example, ROI may be weighted more heavily than conversion ratio. This helps me quickly view the overall performance of a lead provider. I would love to see an apple to apples comparison in the widget. It may not be that difficult to build.

Also, you may want to look to Ohio for your leadsJ 

Full Disclosure:
Juicy Leads sends numerous states into the system, not ONLY Ohio.  The actual amounts are unknown though.  

The mortgage lead space has a very critical issue with regard to customer experience. Because the market has been extremely lucrative, those that have harnessed the Internet as a channel have been rewarded. Buying leads has been popular among brokers who utilize the major aggregators aside LendingTree, and is popular among mid-tier banks who utilize LendingTree. Direct lenders have also made Internet leads a core part of their business.

However, this has created an imbalance in the way customers experience the Internet as their initial mortgage touch-point. The more profitable you are, as a borrower, the more calls you will get. If you fill out a form in a highly profitable and concentrated state and expect 4 banks to call, don’t be surprised if you are called by more. On the other hand, the less profitable you are, the less calls you will get. So, if you have a nice half-million dollar property in California and you fill out that form on an aggregator site — brace yourself! And if you are in North Dakota, you better not even waste your time on the Internet and go to your local bank, because brokers will focus on selling and closing the California leads.

Over-serving some leads and under-serving others, whether it is at the call center level or even at the aggregator level (aggregators who can’t sell leads as many times as they announced to the customer), is becoming a major problem in portraying the Internet as a viable option for a large portion of borrowers who are looking for a refinance or a purchase loan. A trick here — if you are licensed, try buying leads in the obviously under-served areas and see if you can make some profit and help a customer out while you’re at it. It wouldn’t hurt being the only one calling a prospect in Idaho, versus one of 10 calling the New Yorker.

This post was written in result of some interesting test where I filled out an aggregator’s form for a Florida property, and another one for a Wyoming property. I received calls by 4+ lenders and even after saying I wasn’t interested to the initial callers, continued to receive a total of 32 calls. For the Wyoming lead, there were NO CALLS! The way I was able to track who called and to be able to shut off inbound calls was to use TossableDigits.com (interesting concept to be able to throw away a phone number!).

This issue is seen in many scenarios:

Although there is no way to control over-serving leads, there are definitely opportunities in the inefficiencies of under-served leads. And as far as customer experience, as an industry we do not want to alienate customers from the Internet. It’s a cost and margin game.

Are lead-gen companies gaming the Lead Marketwatch widget? It looks as though a few companies may be cherry picking leads and sending them to Icosales users to improve their conversion numbers on the Marketwatch Widget.

I wonder if other companies are doing the same? It makes me want to become an Icosales user specifically for the lead quality:)