Buying in leads sounds like a great idea. No need to pay for marketing or put in the hard yards. Instead, simply pay £150 to £200 per lead, sit back, and watch your diary fill up with potential clients.
Sounds great, doesn’t it?
Hold on, though. If something sounds too good to be true, it probably is, right?
We certainly believe that’s the case when it comes to buying leads.
Let us explain why, before you make your own mind up.
Buying in leads gives you no control
Buying in leads means you have little or no control over three key areas.
#1: The price you pay
Lead generators might increase the price they charge you for several reasons:
- Increases to their operational costs
- A rise in the amount they need to pay Google to ensure their ads remain visible
- Pressure to increase profit margins.
Whatever the reason, your Return on Investment (ROI) could be cut almost overnight if your lead provider hikes up prices.
That’s exactly what happened last year to the advisers/planners who had bought leads from Unbiased previously. For almost all financial advice/planning focused enquiries, prices rose, cutting ROI.
If you buy leads in, it’s unlikely you will have much (if any) oversight into the online adverts used by the lead generators, or their wider tactics.
In most cases, that isn’t a problem.
Unfortunately, there have been multiple incidents of lead generators using underhand tactics to generate enquiries. Only a few weeks ago New Model Adviser reported on such a case. And, we know of a lead generation site, live right now, claiming to have reviews which don’t exist.
Consequently, if you’re going to buy leads in, you need to understand, and be comfortable with:
- The content of adverts being used by lead generators
- The targeting tactics
- The websites consumers land on.
It isn’t just a case of checking these at the outset of the relationship either. All three should be kept under constant review to ensure they remain compliant.
The risk of reputational damage and regulatory intervention is too great to do anything else.
#3: Future proofing
Too often we see advisers/planners buying leads instead of investing in their own marketing strategy.
So, if your lead provider increases costs, reduces your allocation, or worse, stops providing leads (we’ve seen all three happen), you will be left high and dry. Even worse, you will have very few options in the short term to quickly solve the problem.
There’s an additional regulatory dimension too.
We’ve already seen the rules governing lead generators tighten significantly over the past year or so. It’s likely that the FCA will continue to keep a close eye on the sector, with further transgressions leading to even stricter rules or even an outright ban on lead generation.
The consequences of that would be disastrous for the advisers/planners who rely on these firms to generate new leads.
The opportunity cost of buying leads in
It isn’t all about control though. There’s an opportunity cost of buying in leads.
In our experience, buying in leads usually means the adviser/planner fails to invest in their own marketing (because they prefer to take a short cut). They also overlook the best source of new enquiries – recommendations from existing clients.
We all know that recommendations have the highest conversion rate and lowest cost of acquisition. But in our experience, if you’re buying in leads, you will probably overlook the recommendation opportunity.
Perhaps it’s because you don’t have the time to build a recommendation strategy or you’re too busy servicing the leads you are buying. Either way, the consequences are significant:
- Less control
- Higher marketing costs (because you’re paying more for each enquiry than you would be if you focused on recommendations)
- Reduced efficiency (because you need to deal with more enquiries to get to the same point).
There’s a better way…
Marketing strategy > buying leads
We understand why it’s tempting to take a short cut and buy leads in.
But, as we learnt as children, the hare doesn’t win the race.
So, instead of buying new enquiries (which will cost more and convert less), invest in your own marketing strategy that’ll produce enquiries in the short, medium, and long term.
If you get your strategy right (perhaps with a little help from a certain agency that specialises in marketing for financial advisers and planners), you will:
- Be in complete control
- Eliminate potential compliance risks
- Focus on strategies and tactics proven to have a higher conversion rate and lower cost of acquisition.
To develop your strategy, follow five key steps:
- Identify your target market. Until you understand who your ideal client is, and everything you can about them, you can’t develop a marketing plan.
- Nail down your targets and objectives. If you don’t know what you’re aiming for, you can’t build a plan to achieve it.
- Review your current marketing. Use data to understand what’s working and what isn’t.
- Develop your plan. This should identify the strategy and tactics you will use to achieve your aims, allocate roles and responsibilities, and show timescales. Your mix of strategy and tactics will depend on your targets and objectives, but you should always put recommendations at the heart.
- Review and refine. You should use a marketing KPI dashboard to monitor your results.
We’re here to do the hard work for you
Of course, developing a marketing strategy isn’t just for firms that don’t want to buy leads. It’s also essential if you’re looking to grow your business.
Our Ignition Marketing Strategy process takes you and your team through each of those five steps over the course of three meetings.
We’ll start with our Discovery Meeting. After that, we’ll go away and produce your marketing plan, which we’ll present when we next meet. At our third meeting, we’ll take your feedback and challenges, then agree a way forward.
That process should sound familiar! It’s designed to replicate the financial planning process you take your clients though.
If you’d like to know more about how our Ignition Marketing Strategy process can help put you in control of your marketing, click here, and we’ll get in touch.
In the meantime, if you have any questions, comments, or feedback on this article, we’d love to hear from you.
Email email@example.com or call 0115 8965 300.