Thursday, April 5, 2007

A Guide To Internet Mortgage Leads


With the Do Not Call Registry apparently upheld by the courts, many mortgage companies are turning to the Internet to generate timely and targeted leads. This article will provide an overview on how to buy mortgage leads via the Internet.

Lead Generation Methods

There are just five major sources for leads generated on the Internet, with the first three listed below accounting for about 90% of the total leads created:

1. Search Engine Marketing & Optimization
2. Pay Per Click Rankings
3. Email
4. Affiliate Programs
5. Banners - Site Advertising - Newsletters

"Seek and Ye Shall Find"

Search Engine Marketing & Optimization: Potential customers who type in a phrase like "Houston home loan" and follow the links provided by a search engine are the most ideal lead generation source. They are self-directed individuals seeking something specific and you are offering it. These types of leads tend to have a very high close rates.

Long, long ago (1998-2001) most search engines used algorithms to determine the matching of a page to a user's search terms. If the keyword density, titles and meta description were in correct proportions then a site could be ranked at the top of search engine. Most search engines have moved away from true validity-based ranking techniques to a pay per click ranking method (next section). However there still is one major engine, Google, that continues to utilize index and matching formulas to rank its results. Google is one of the most visited sites on the Internet and a high ranking will lead to substantial amount of traffic.

"If You've Got The Dime, I Have The Time."

Pay Per Click Rankings: The monetization of the Internet continues to be the most dynamic change. Almost every search engine now lists results not on algorithm matching, but on who pays the most to be ranked first. As of mid-October here are the bids per click (not per lead at Overture.com for the key word: home loans.

  • The top 34 bidders each paid at least $1+ per click

  • The top 23 bidders paid at least $2+ a click

  • The top 13 bidders paid $3+ a click

  • The top 11 pay $4+ a click

  • The top 7 pay $5+ a click, and

  • The top two pay $10+ per click.

  • Even a search portal like Google, now lists pay per click results just to right of their algorithm results. It is inevitable that over the next year, virtually every top result will be driven by the bid on that keyword, not by an algorithm determined relevancy.

    "Don't Put That In Your Mouth, You Don't Know Where It Has Been."

    Email - Spam: Sometimes small kids will pick something up from the floor or in a store and put the item in their mouth. As parents we are protective of germs and try to prevent our child from getting sick.

    It is the same with Internet leads, not all leads are created equally; some leads are clean and some are potentially dirty. The most feared lead is one generated via unsolicited bulk email. There are some highly talented programmers who dislike Spam and sometimes will complete a lead just to see where it came from, and then after seeing your web site, proceed to hack it until it shuts down.

    "Share The Wealth?"

    Affiliate Programs: You can establish a network of affiliates by paying a bonus per lead. Be aware that this method of lead generation can be expensive to establish, expensive to administer and require a significant man-hour requirement.

    Banners - Site Advertising -Newsletters: Internet users have become desensitized to banners and the click-through percentages are generally horrific. On very high volume (Yahoo), or highly niche sites (i.e. a site on relocating to San Diego) you may obtain a few leads, but the days of just throw a banner on any site and it works, are long over. As with banners, newsletter advertising can work, but only if something unusual (i.e. rates at all-time low) or if the recipients are targeted (i.e. a foreclosure newsletter).

    "Enough is Enough"

    Use Short Lead Forms: One of the most common lead generation errors we see is the over-collection of data. Many web sites require a comprehensive two or three page form to be filled out just to talk to the mortgage company. With every field you add, you lose a percentage of people who would have completed your form. We suggest gathering just enough key information to allow your loan officers to contact the customer and begin the sales process.

    "It's All Mine."

    Exclusivity of Leads: One of the most common misunderstandings between a lead provider and a mortgage company is over how many different companies receive the lead. An exclusive lead only goes to one company, and as such, costs more per lead. A shared lead is often sent to two-four mortgage companies, and while costing less, has more direct competition.

    Filtering & Targeting: Because of the varied needs by mortgage companies, some lead providers can filter based on a number of variables, such as: state, loan amount, purchase, refinance, debt consolidation, home improvement, credit status, loan amounts, LTV, credit rating, etc. The per lead pricing will be higher for extra filtering, but the additional cost is generally offset by a more targeted lead.

    "Wine May Become Finer With Time; Mortgage Leads Don't."

    Fast Delivery: Demand real time delivery of leads as this will allow you a prompt response back to your potential customer. One of the most common mortgage-deal-killers is mortgage companies that take more than eight hours to reply an inquiry.

    Buying Internet mortgage leads is one of the most cost effective means to acquire targeted customers. Expect to pay about $25-35 for an exclusive lead with normal filtering parameters (less for semi-exclusive leads).

    With the impact of the recent Do Not Call Registry, there is larger demand for the current supply of available high closing leads. Because of this larger demand, per lead fees have been increasing at a steady pace across the entire industry. And we suggest to you (exactly what you suggest to your own customers) is that you "lock in" your rates now to purchase mortgage leads before prices go even higher.


    Originally published December 2003.

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