Buying in enquiries or creating your own – which is best?
Written by Phil Bray on 21/11/19
We’ve recently spoken to a few firms who’ve been wrestling with this question and either working with third-party lead generators or thinking of doing so.
Typically, lead generators will use a combination of tactics, but many rely heavily on using Google Ads to drive consumers to a landing page. From there, the consumer is asked to leave their contact details with the promise of being matched to an adviser.
Some lead generators even run adverts targeting ‘Unbiased’ as a search term and could stand accused of misleading consumers about the service they offer.
That said, I know some financial advisers and planners who see lead generators as a shortcut to creating the enquiries which will allow them to meet their growth targets.
Unsurprisingly, we disagree.
Before we’re accused of being biased because we run a marketing agency and help firms develop their own enquiries, let me say this: if we thought generating and then distributing leads was the right thing to do we’d have set up a business which does just that three years ago. We don’t. So, we didn’t.
Nevertheless, we understand the temptation. So, we thought we’d explain why we believe developing a marketing strategy which delivers a sustainable flow of new enquiries is preferable to buying them in.
We’ve seen the cost of buying an enquiry significantly above £100. That’s expensive, especially when there’s no guarantee that the prospect will want to meet you, or you them.
In our experience, the cost of generating your own enquiries is lower, and the quality of the enquiry is usually better.
2. Bad habits
Lead generators are most commonly used in multi adviser/planner firms where the demand for new enquiries is greater than in small practices.
However, we’ve seen bad habits develop – especially when the volume of new enquiries being purchased is large. There’s often a feeling among those people dealing with the enquiries that ‘another will be along in a minute’ and, consequently, they sometimes fail to treat each lead with the respect it deserves.
Not only does this affect conversion rates and return on investment but over time such behaviour will damage your brand.
3. It overlooks the benefit of referrals
It’s not controversial to say that referrals are the best type of new enquiry. They usually have an immediate need, are pre-sold on working with you and have the lowest cost of acquisition/highest conversion rate of all forms of enquiry.
However, it takes hard work to maximise the referral opportunity and there are many reasons why clients might not refer you on.
It’s worth it though. If you’re prepared to put the hard yards in, give great service and develop an effective referral strategy, you’ll never be short of a steady stream of new enquiries.
4. Less targeted
It’s far easier to drill down into a niche if you’re in control of the marketing message. You can explain who you work with, the problems you help clients to solve, the aspirations you help them achieve, and why they should work with you.
That’s far harder when enquiries are bought in.
5. You’re not in control
If you build and implement your own marketing strategy, you’re far more in control. Sure, there will be things you can’t influence, but there are far more things which could affect your flow of enquiries (and your business growth) if you buy enquiries in. For example:
- Legislative changes: the cold calling ban affected many lead generators and future changes could negatively affect the ability of firms to generate leads.
- Changes to Google’s algorithm: many lead generators extensively use Google AdWords. If Google changes their algorithm or something else affects the positioning of adverts, the number of leads available could change.
- Pricing: you have no control over what you’re charged. We’ve seen several advice firms hit by hikes to lead prices which has reduced their return on investment.
6. Lower conversion rates
In our experience, conversion rates on bought-in leads are far lower than for almost any other source of enquiry.
The lack of ‘buy-in’ to your business might be one reason, so might the bad habits that some of your team might fall into. Whatever the reason, lower conversion rates equal poorer returns on investment, inefficiencies and thinner margins.
A word about the directories
Many of these accusations could be levelled at adviser directories, which we often recommend as part of a wider marketing strategy. However, there are significant differences:
- In the case of VouchedFor and AdviserBook (and, in some instances, Unbiased) the consumer has specifically selected an adviser. That means there’s already a connection – they’ve selected you to contact rather than simply been assigned to you because you’re paying.
- The cost of enquiries via the main adviser directories is far lower than the lead generators we’ve seen.
- The conversion rates from the directories are higher than we’ve seen from lead generators.
- Your directory profiles will help dominate the first page of Google for a brand search and, in the case of VouchedFor, will help individuals be found by potential clients.
Avoid short-term thinking, and look to the future
There’s no doubt that for some, buying in leads is tempting and often seen as a ‘quick win’. However, we believe that temptation should be avoided and a marketing strategy focused on delivering enquiries in both the short and longer-term developed instead. Sure, it’ll take time, effort and investment to deliver, but get it right and it becomes an asset to your business, while removing the potential threats posed by lead generators.
If you’d like to know more about how we develop marketing strategies for firms please drop an email to [email protected] or call 0115 8965 300. We’d be delighted to help.