What is Lead Generation or LeadGen?

Lead Generation or LeadGen has been around for two decades. Ever since the invention of the internet, people have been using this new technology to look for information, resources and drive their purchase and shopping behavior. 

Billions of people are online today looking for information and millions of small businesses are generating trillions of dollars of economic activities based on these searches. 

Banks and other financial institutions are also trying to find their potential customers online. Whenever someone looks for a new bank account, loans, credit cards or refinancing their mortgages, advertisements are placed on search engines or A.I. tools to capture their attention.

According to research almost 97% of people looking for mortgages are searching online. Capturing these shoppers' attention and underwriting these potential clients according to their credit and income becomes a critical activity. Consumers today demand an instantaneous decision. Lenders and banks need to have the best set of technologies to control these lead flows and maximize their conversion rate.

Why is Lead Generation important to Banks and FinTechs?

Like any other business, new customers are the lifeblood of their operation, banks and fintechs are seeking new clients like all other businesses to maintain and grow their portfolio.

Almost all financial institutions today are drawing customers and clients from online search engines and A.I. search tools. But not all banks and financial services companies are prepared to take on this volume and provide a speedy and accurate decision. 

Today, consumers expect an instantaneous decision and they are also very conscious about sharing their data online. For example, most of us are taught to never put your personal information in unscrupulous websites, your information might be sold to online bidding platforms and sold to the highest bidder.

However, people are still looking to spend and finance their lives, so the show must go on. Therefore a whole price comparison shopping website such as LendingTree emerges as one of the many “trusted” price comparison shopping websites out there.

Who are these Lead Generators?

Google, Microsoft, Facebook and all of these search engines, social media platforms are essentially lead generators. They either serve as search engines where consumers want to know more about a certain subject, product or services, or look for other folks online to get peer reviewed information on certain products and services they are seeking to purchase.

There are also closed looped lead generators such as Amazon that show advertising right on their website. For example, if you are searching for certain products to buy on Amazon, there will be an endless list of products being pushed to the top of the search results within Amazon. Some of these vendors pay amazon to be placed at the top of the search result whether they are truly a superior product or not.

There are also professional lead generators that may not have millions of dollars to advertise on google or amazon’s platform. Sometimes they set up websites themselves advertising a specific product such as personal loans or auto refinance. These websites often look like a lender’s website offering financial services, but they are actually disguised and only serve as a place to gather information from the end applicants and resell this information or intent to a network of lenders.

What are some of the common ways to generate leads by Lead Generators?

There are many ways lead generators can generate demand, or leads. We will illustrate the most common practices for online lead generators to generate leads for their clients, which are banks and fintechs.

Online Ads

Lead Generators sometimes have SEM (search engine management) folks on staff to work with various advertising platforms to place ads. These advertising platforms are essentially the likes of Google or other search engines that people use to search for certain products or services.

Google Ads is one of the most powerful advertising platforms out there. When a person searches for “Personal Loans”, google will return most reputable websites that provide personal loans services. If you are an established company with thousands or millions of visitors a day, your company is likely to be listed at the top of the search results.

But if you are one of the newly established lenders that also want some eyeballs or clicks, you will have to pay a lead generator to help you place ads on the Google Ads network. Most of the time the lender wouldn’t know what the actual ads look like form the lead generators and all they are aware of is that leads are coming to their website, in the hope that some of these visitors will call or click on an application form.

Banks and FinTechs can hire SEM specialists as well and run ads on Google Ads network to directly advertise their product and services. However, in most recent years, Google Ads network has a very strict policy about placing ads for the financial services industry.

Banner Ads

There are also platforms out there that will buy spaces or real estates on major internet websites such as CNN.com or Reddit.com. These websites are specialized in news or social media and these websites are also monetizing their traffic buy selling banner ads (the ads you see on top of the side of the website that looks like a digital billboard). 

Google Ads also plays in part to this form of online advertisement. They will buy these digital billboards in bulk and serve ads based on your online profile or browser behavior or search behavior. For example, if you are looking for cars, cars related ad banners will follow you for a few days or weeks at a variety of different websites you frequent to try to capture your attention and solicit business from you.

Email Marketing or SPAM

Most of the emails we get today are considered spam. Unsolicited emails from businesses that advertise to your inbox just like they would with a regular mailbox at your home or apartment. 

These email advertisers probably got your email from businesses that you do business with and have given consent for that business to resell your data to other advertising partners. This practice has been around for a long time and email service providers have tried their best to clap down on email spams.

For example, there are 1.8 billion gmail users world wide and billions of spammers are finding their ways to your inbox. Google, the owner of gmail, has done a tremendous amount of work to filter unwanted spam emails to reach your inbox.

On one hand, it feels like Google is doing a free public service to help you reduce the amount of spam coming into your inbox, but on the other hand they are just protecting their billion dollar advertising business, because these email spammers are not paying google, but have found a way to research google (gmail) users.

If you subscribe to our theory, then you will understand why these email providers, who also own a big advertising business, are trying their best to stop the flow of advertising unless you pay Google to access google user’s attention and their eyeball time.

SEO & GEO -  Search Engine Optimization & Generative-AI Engine Optimization

Search engines such as Google Search are still one of the dominant players in search engine platforms where billions of people use today to look for information. True to their brand and utility, they still need to provide up to date and relevant information for the search engine users.

They also can’t plaster ads completely on their search results, even though they probably want to. So there are still spaces and real estate on their search engine results page for relevant and decent content to appear.

ChatGPT and other Generative-AI Search Engines also have the same issue. Even though the search results appear to be uncorrupted by advertisers, it’s just a matter of time for advertisements to creep through those results and erode public trust.

At any rate, SEO and GEO are ways to appear on search engines and AI search engines without having to pay for the top spot on their result page. The energy spent on this type of work is hard and it would take years and sometimes decades for these search engines and A.I. driven search engine to recognize that your website contains up to date content that’s relevant and substantial for their audience to look at. In other words, to maintain Google and ChatGPT’s brand as the preeminent information search platform, they have to give people accurate information to keep them coming back.

Banks, lenders and other businesses have tried to hire “SEO experts” to help them “rank” higher on Google or ChatGPT results, but it has failed time and again. These SEO experts are not industry experts and whatever they write, which will take a long time to do, are either not relevant, surface level information and dilutes the brand in the long run.

Sometimes, companies that hire these SEO or GEO experts don’t have the patience over time and wait for ranking results to rise. It could take up to 3 years or more for search engines and LLM engines to catch up and recognize that your brand is a trusted industry leading voice, leading to higher rankings.

Economics of Lead Generation

Lead Generation is very expensive. There is a reason why Google and OpenAI are raking in billions of dollars per quarter. Whether you are buying leads from lead generators or have hired your own marketing team to write content in the hope of higher ranking on search engines or social media, it’s a costly venture.

Besides payroll, advertising is probably one of the most expensive items on your finances and spending hard earned marketing dollars without converting perspectives into customers will eventually lead to the demise of your business.

There are two types of ways and businesses pay lead generators to generate leads.

Pay Per Click

This is where the banks or fintechs pay these lead generators for each click onto their website. For instance, each click could be priced at $8, $15, $20 or $100+ dollars in certain type of businesses. 

The lead generator will then pay search engines, social media websites from the monies they collected from the banks and fintechs. Essentially they are getting paid for the work they’ve performed to come up with the ads and managing the traffic to your website. We won’t speculate on the markups of these leads but either way you cut it, these leads are precious and each business is looking to convert these leads into paying customers as much as they can.

Pay Per Funded

This model is where the banks and fintechs are paying the lead generators only if they can convert a lead into a real customer. Often the payout is much higher than pay per click but it transfers some of the “risk” back to the advertiser or lead generators.

That is to say, if the leads are not good, the banks and fintechs wouldn’t have to pay. This might sound okay, but there are other costs associated with filtering these leads. There are credit bureau costs, identity verification bureau costs and sometimes open banking costs are involved as well. The economics might work out the same way as pay per click.

If you are running an easy to understand, and a short path to revenue business, pay per click might be good for you. If you are running a longer process financial product such as a home improvement loan or a mortgage, you might want to consider pay per funded or a hybrid model. 

Eventually, each business will find their way into the right balance of pay per click or pay per funded models as conversion data comes into over time. 

Lead Generation or Lead Gen Management becomes an important task

Whether you are buying leads from online lead generators or have hired teams to generate your own leads, managing these incoming leads become an integral part of your business. Filter these leads and providing a timely underwriting decision will help you optimize your advertising strategy as well as find the right payout method to balance the amount of money you are spending on marketing and advertising versus revenue and profit generated from the converted clients.

Lead Generation Campaign Management

To set up leadgen campaigns, you will need to work with lead generators and specifically dock your campaign ID with them to properly track each campaign accordingly. Once the campaign ID is generated, you will need the lead generators to start sending you leads via these campaign IDs. 

One of these campaigns are created, you can see all of these campaigns you’ve set up to interface with various lead generators. This will give you the ability to monitor all of your campaigns at once. You can turn on or off specific campaigns, pause certain campaigns for a period of time. 

Having the maximum number of controls in place will help you optimize how and from whom you are buying leads from based on conversion rate metrics. This is an important aspect of lead management. 

Once your campaigns are set up from your lead generators, filtering for bad leads that you can’t convert for a variety of reasons becomes essential. Some of the lead generators will let you take a peek at the quality of the lead before giving the chance of making a buy decision.

For example, most of the lead generators will expose just enough PII for you to run an identity verification report and a credit report. If the identity of this online lead or the applicant behind this lead is clean and his or her credit report is within range of your financial product or service offering, you will then send a signal back to the lead generator to express your intent to buy this lead.

Price Reject

We are going to segue into something called Price Reject. Price Reject is a concept where the buyer of lead, namely banks and fintechs are comfortable with the lead quality based on their identity and credit checks, however they believe the lead is priced too high.

The pricing of the lead is sometimes pre-negotiated with the lead generators. For example, if there are buy decisions, then the banks or fintechs must buy the lead at $20, for instance.

Sophisticated lenders will use a technique called Price Reject to provide an internal guideline on how much the lead should cost and tell the lead generators that they would be able to accept the lead unless the lead is priced at a certain dollar amount, often, it’s less than the asking price.

Sometimes the lead generators will agree with the new price, fearing that they won’t be able to sell this lead. Other times, the lead generator will present this lead to other lenders and banks to see if they can sell it at a higher price or the current asking price.

If no one else on the network is willing to pay for the asking price, then whomever that offered the best Price Reject price will get another look at the lead. By our estimation, 30% of the leads are being offered at a Price Rejected price or a lower price.

Banks and lenders should have a Price Reject capability when interfacing with online lead generators. This will give them the flexibility to name their own price and therefore save a lot of marketing dollars in the process.

Lead Redirect

When the lead is accepted or purchased, your lead management system should let the lead generator know exactly where to send the lead. In other words, where do you want this lead to be redirected.

The technology behind this process is complex, when a lead is accepted your lead generation campaign management system should send a signal to the lead generators to “land” this customer on a link to continue the application process or download your application.

There may be just a few seconds before the client is tired of waiting and moving onto the next opportunity or whomever that provided that acceptance signal the fastest. This race to a decision is critical in the lead management process.

You should always use the fastest lead generation management software available to you. Sometimes speed wins the leads and that customer. You should have minimum delays when it comes to interfacing your lead generators and redirect that purchased lead to your web or mobile property as soon as possible.

Lead Calendering and Planning

When you have established a good rhythm with your lead generators, you might want to set the campaign in a more automated but monitored fashion. Setting how many leads you would like to purchase and when you want to purchase these leads become important.

Calendering becomes essential to your campaign planning. Not only should you set timer and calendars at the lead generator level, you should also set it at the campaign and subcampaign level.

The lowest level campaign managing timer and calendar will over-right higher level settings. This way you can control each sub-campaign with the exact time and number of leads you would like to purchase.

When the system reaches these levels, it will automatically shut off the lead purchase spigot and wait until the next lead purchase opportunity starts.

Lead Campaign Management - Compliance

Lead Management is not a process where you set it and forget it. It requires constant monitoring, tweaking and negotiating with your lead generators.

Internationally, your marketing team and your analytics or risk management teams are constantly working together to study the lead purchase process and ingesting data to calibrate which lead generator’s campaigns are working according to your metrics.

For example, one of the most important metrics at the top of the funnel level is conversion rate. Are these leads you are purchasing actually converting? There might be all sorts of reasons why leads are converting or not converting.

For example, the speed at which you are redirecting your leads might take too long and users are clicking away. Or the offers presented on the redirected landing page are not enticing or miles away from what the end applicants are looking for.

Conversion tunnel optimization requires multiple teams to work together and constantly tweaking rules, strategies, pricing even to maximize conversation rate. You need a system that can give you control and testing capabilities to increase your conversation rate.

Making these tweaks can be time consuming and tedious and you also need a way to track all the changes. Individuals in charge of managing these leads will have their changes recorded so banks and fintechs can back track and see which activity took place and figure out what worked what didn’t.

Lead Performance Tracking

Perhaps the most important aspects of lead generation campaign monitoring is data. You should have access to the maximum amount of data to help you make an informed decision. Data, graphs, charts are essentially to monitor the health of your lead traffic.

Accurate lead information will help you to manage and stay on top of each campaign and sub-campaign performance.

The most successful lenders and banks are the ones that have dedicated personnel to work with the lead generators constantly to turn on new campaigns, shut off old campaigns or non performing campaigns.

Leaving a campaign working itself out is never a good strategy and therefore having access to the most up to date data, streaming across your desk is the most critical way to provide the healthiest leads coming into your system.    

LendAPI Lead Generation Control 2.0

We’ve been working hard to bring about these enhancements since the very beginning of business. These new features that will help you manage your campaigns, sub campaigns and lead generators are now available for you to use.

Setting up rules, Price Reject strategies and redirects to specific products have never been easier. We also provide a maximum amount of data for you to calculate the most cost effective way to buy leads that are now at your fingertips.

We also have over 100 data providers for you to use to filter leads from an identity verification aspect to credit underwriting. We gave you these features to set you free to work with any lead generators under the sun and give you true control over your campaigns.

About LendAPI

LendAPI is a complete Lending Core that launches any financial product instantly. Book a demo at www.lendapi.com and follow us on Linkedin.