Negative Value Leads
Couldn’t something that costs nothing have negative value? Could something free actually cost money? Given this audience, that last question should have had an asterisk. Performance marketers are the king of free that costs money, but in this case we were not talking about a free trial with negative option billing. We were really talking about items of value that have no cost, but as the negative option continuity offers have taught us that free rarely means free. Even when something comes for free, it usually has a catch or at least a tradeoff. Want the free drink that the Monster Energy truck hands out? It is free, but the tradeoff is knowing that you are being marketed to with the company hoping to influence your future purchase decisions. That’s generally not so bad. The cost is negligible, if non-existent. What if, and I’m not sure why this example has come to mind, someone offers you a free fish. Free fish have yet to become the craze, but assuming it happened, unlike the free drink or another free sample, you might hesitate to accept this. The fish might be free, but accepting the gift means agreeing to increased costs. Assuming you, like me, don’t currently have anything to house the fish in, you must now dedicate time and money if you choose to keep it (alive). While leads aren’t fish, more and more we see the same dynamic at play.
The fish example didn’t stem from our other article, but we were reminded of this topic when featuring a misleading landing page and commenting that some might cynically assume debt buyers wouldn’t care about the message. That piece focused more on one challenge with false messaging – getting in trouble. This one focuses on a different angle. The subject is one that many within the online lead generation space have found, but something that hasn’t been precisely quantified. It’s the impact on the ecosystem of bad leads. When focused on the generation of leads, you don’t always think about what the variation in the leads sent actually means. The lead space operates fluidly but instantaneously, so the average generator might know quality matters, but the only way for them to make money comes from increased volume. If you get paid an average of $10 per lead, then you focus on getting as many as possible. You know your price could go up or down later depending on performance, but you don’t worry about that until later. Buyers of the leads fall into the same trap as well, especially those that are either a little smaller or newer into the space. Every dollar counts, so they hesitate to spend what seems like a lot per lead when they could spend much less. But, like the free fish, you can have free leads that produce a net loss, and it all has to do with the human capital at work.
As a generator focused on getting media to convert and even as a buyer trying to turn a profit on the leads purchased, it is so easy to ignore the human on the other end of the phone. And, for a change, we’re not harping on the end-user. It’s the person who must try and convert that sale. Those who have done sales already have a close approximation to how it feels, especially if the sale involved cold calling. For those in sales in our performance marketing space, we have so many tools available to us that a more traditional phone operator does not, like email. We often get a chance to make our case and open up the door before ever having to get on the phone. If you just received a lead, e.g., you worked at a debt settlement company, you don’t have that luxury. You have to get on the phone and try to get them on the phone, which in debt settlement isn’t easy because they are professional phone dodgers. There is part of it that is like trying to call into a radio station to win a prize. Imagine though instead of it being a prize at the other end of the line, it’s how you have to pay your bills. You can now imagine why intent matters. Reaching someone who filled out the form for virtual currency makes for a different conversation than one who just performed a search on the topic.
It might exist already, but if not, it will be great to hear the results of studies on motivation and performance, namely the impact motivation and attitude has on a person’s ability to close deals. When we speak to companies who have call center agents or rely on them, we hear more and more the emotional tax. We like to think of call center agents, or the insurance broker, debt settlement agent calling on the leads as automatons, people who perform the same task equally well time and again. But, they aren’t, and they don’t. When they can’t reach buyers, or when they reach disinterested buyers, it sets them back. If it happens to be your leads they are trying, they start not trying, and you will start making less per lead. True, the best lead can’t make a bad closer better, but we’re holding things equal here and assuming that buyers want to close and orient themselves to compete effectively.
Getting closers is a skill, and it might sound like fru fru 21st century coddling to focus on the emotional state of those calling the leads, but how they perform is how the company performs. As the buyer, you have a cost if you want to replace them. And as mentioned, as the seller, you don’t want to get a half-assed effort by the caller because they see your id and assume your leads don’t work. Counter-intuitive as it sounds, you really can grow slower by saving money.
