As American as...

An intermediary looking to buy mortgage leads might visit Google and type something like "buy mortgage leads" into the search box. When they get a results page, they will see a number of adverts from lead generators promising 'exclusive' leads. Many lead generators promote themselves in this way, as they think what a broker wants is to purchase a consumer lead nobody else has got.

And of course this is true. Why would a broker not want a fresh customer, who might have submitted their contact information online seconds earlier? Why would they not want the perfect consumer, unsullied by the special offers of their competitors?

The problem is that in reality, there is almost no such thing as an exclusive lead. Assuming a lead generation company has sufficient technological validation in place, all it can guarantee is that a consumer lead is exclusive to its market. What this means is it can only validate leads coming from sites it controls.

But there are hundreds, if not thousands, of different sites collecting consumer information and selling this on as a lead. In fact, many companies who claim even this level of exclusivity are probably selling leads on multiple times. So a consumer might leave information on sites A and B owned by a lead generator - but what happens if the consumer also goes on site C to look for loan or mortgage advice? Well, what often happens is the lead generator selling leads from site C sells this lead to another broker.

But irrespective of exclusivity, this is still a good lead. If a broker speaks to a consumer that genuinely wants mortgage advice, then even if several companies have already called the consumer before, it is possible to convert the lead into business. If a firm has a good service to offer and can give a competitive rate, then there is no reason why it can not make the sale.

If lead generation is considered in the correct context - as a marketing activity - then every consumer the broker comes into contact with has to be sold to. They are not gift-wrapped customers; they are people who have expressed interest in a product.

What every broker needs to realise is that until there is only one lead generation company selling every single lead, then it could be argued there will never be such a thing as a guaranteed exclusive lead. So rather than everybody pretending that exclusive leads exist, why not just take the plunge and buy shared leads? This is currently the favoured model in the US.

Lead generation, like many new business ideas, originated in the US. They have been doing it for much longer than we have in the UK. Over there, it is standard practice for leads to be sold up to four times. Brokers expect this and so do clients. US brokers can make a lot of money buying shared leads.

Despite the obsession with exclusive leads, there are several obvious advantages to buying shared leads. First - and probably most important for brokers - shared leads are cheaper. The reason is that by selling a lead multiple times, a higher overall return on investment is achieved for the lead seller, so for each time the lead is sold, a lead seller can afford to yield less money. From the broker's perspective, if they buy a volume of leads and convert a certain percentage into business, then the less they pay overall and the higher the return on investment from buying leads.

In addition, as no company can guarantee exclusivity, why pay more to buy these lead types? Surely it is better to pay less, and when the firm contacts a consumer, they are fully aware that their information has been passed onto multiple brokers?

Currently, if a broker buys from an exclusive market, the consumer filling in their details will often see marketing material such as "your information will only be passed on to one broker". When looking for mortgage or loan advice, consumers tend to go to multiple sites and leave their information and they often forget which sites they filled in.

So when consumers receive calls from brokers, they might get annoyed as inevitably they will receive calls from a number of companies. From the broker's perspective, it is much harder to convert a disgruntled customer than one who is expecting the call. So when a shared lead is bought, the consumer expects multiple calls and competitive offers from brokers who want to win their business.

Brokers are often under the mistaken assumption that exclusive leads will be easier to convert. The reality is, if the intermediary is a bad salesman, they will not convert neither an exclusive nor a shared lead.

The whole exclusive versus shared debate should not obscure the fact that when a lead is bought, it is not a guaranteed customer. The hard work starts when the broker receives the lead and a well-defined and structured process is required to work the leads. This means following up each lead as soon as the consumer information is received and trying until contact is made. If brokers make sure they are first to speak to the consumer, then whether the lead is shared or not is irrelevant. So there is a potential argument that buying shared leads can earn brokers a better return by paying less and chasing up every lead.

Lead generation will become increasingly important to intermediaries in the coming years. As consumers become more savvy and creative when they go online, brokers need to be clued in on what is happening in the world of lead generation, and they need to know what options are available to them when they undertake a lead-buying campaign.

It will certainly be interesting to see what the coming year holds for the prospect of the UK's having a shared lead model. n

Justin Rees is head of marketing at Leadpoint