Dec

21

Mortgage, debt lead aggregators now selling leads five times

Filed Under Affiliate marketing, Mortgages 

Over the course of the past few months, financial lead aggregators such as LowerMyBills and NexTag have quietly switched from a 1:4 to a 1:5 model. This means that they are now selling the same lead to five different banks or brokers at the same time.

Prompted by stagnant traffic and an overall tightening of the mortgage refinance market, lead aggregators are looking to grab onto anything that will improve their margins, or at least keep them from eroding.

Theoretically, the total value of a realtime mortgage lead should be the same no matter how many times it is sold. Let’s say a bank is willing to budget $3,000 to acquire a $300,000 refinance loan. If a lead has a 1 in 10 chance of closing, that each lead is then worth $300. Since a consumer can only close a maximum of one refi loan at a time on the same house, increasing the number of lead buyers, logically, should proportionately lower the price each of those buyers pays for the lead. So you’d expect that that same lead, sold four times instead of once, would now fetch $75 per buyer.

But that’s theory. In practice, other factors come into play. Having two offers instead of one increases the chances of the consumer converting, since there is a greater likelihood that one will interest them. But having, say, ten would be overwhelming, and likely turn the consumer off entirely and drive down to zero the chance of any of the lead buyers converting.

The balancing act is finding the optimum number of times a lead can be sold in order to maximize their revenue without ticking off the consumers or lead buyers too much. Is 5 too much, or just right? By moving to 1:5, lead aggregators are betting on the latter.

Are they right? Time will tell. In a future post I’ll discuss why this may all be irrelevant, plus what the implications are for affiliate marketers who target the financial services sector.

Comments

10 Responses to “Mortgage, debt lead aggregators now selling leads five times”

  1. Mortgages News » Blog Archive » External Mortgage Help on July 12th, 2007 12:37 am

    […] When you’re in the market for a mortgage is important to have some understanding of the industry itself and how the people working in it may deal with you. Favvas.com has a good article about some of the sharp practices employed by mortgage brokers. […]

  2. Tom Allen on July 12th, 2007 12:44 am

    You give some interesting insight. I linked to this page in a blog post I made about useful information.

    The post is here:

    http://www.realmortgagenews.com/archive/external-mortgage-help/

    Good stuff and keep up the good work.

  3. Ashley Noonan on September 10th, 2007 6:56 pm

    Good Afternoon,

    My name is Ashley Noonan I am the Senior Sales Executive of Lending Gateway. We are a lead Generator that generates over 200 exclusive Debt Consolidation leads per day. We are currently looking for a Company that is able to take these leads from us.

    We offer different filters for the areas and states you work in and do most postings. We have other options such as advertising on our site to get direct traffic to your page like banner ads and lender listings as well. You can view our Quick Apps online to see the different Verticals we offer as well as the information we ask for on the application at http://www.lendinggateway.com

    Please either email or give me a call for more detailed information. We would really love to work with you and I will be looking forward to speaking with you! Thanks again!

  4. Consumer Debts on October 10th, 2007 2:46 am

    Hi, Just wanted to show some love in here!

  5. Mike Mortgage on October 15th, 2007 3:04 pm

    With personal experience…

    I applied for a loan to a company online. Few days after I recieved a phone call, then a letter. Within a couple of weeks I had 20 phone calls from different lenders offering me loans. It was hurendous having that going on, and no way to stop it.

    Ever since I have at least 1 or 2 calls every week :

  6. Terry on August 21st, 2008 10:47 am

    Interesting perspective on the lead generators.

    From our own perspective we generate most of our own leads through our internet marketing campaigns. These days most are generated through the natural search rather than PPC (pay Per Click) Although we do still have a few PPC campaigns running because the ROI is so good.

    However, recently we switch off one of our PPC campaigns because we could buy exclusive leads from one of the major providers so cheaply. The situation for lead generators one has to assume is pretty dire.

    For the mortgage broker though, the problem is not procurring leads is placing the business with the current lender criteria.

  7. Mola Jutt on March 2nd, 2009 6:50 pm

    Ashley,

    I know its been a while but were you ever able to find a good company who would buy your Debt Leads? 200 per day is pretty good and I would imagine that number has only gone up since then. Please share.

    How much are these leads worth anyway?

  8. Perry on March 13th, 2009 2:19 am

    More than these marketing tactics, debt settlement agents and companies must learn how to take care of these debt leads. Most of them have urgent demands, so you cannot really afford to track, distribute, and score them after two days of initial contact. To help agents effectively manage them, they can make use of a lead manager.

  9. Debt settlement online on October 10th, 2009 10:00 pm

    This is an interesting perspective:) Very nice reading. Thanks for sharing this great article!

  10. Us Debt settlement on October 11th, 2009 2:49 pm

    It was an affirmation of what we already knew and was encouraging.

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