60: Should You Buy Online Leads?

Welcome to the 10 Loans a Month podcast, where mortgage brokers become business owners. And now, your host, Scott Peckford.

Hey, Broker Nation. Welcome to Aller Mortgage Brokering Podcast. And so now let's jump into this episode on buying leads. So is this a scam? What do you think, Scott? So I got kind of five things to think about when it comes to buying leads, and I'll jump into them with you.

But the first thing I want to say is that buying leads is absolutely a valid business model, but it is not for most people. And most people are going to lose money at it. There's going to be some that will get it. And I'll give some examples of that when I'm talking. But for most part.

Most people are going to lose money at it. And then because they lose money at it because they don't know what they're doing, they're going to think it's a scam. Sometimes there's a percentage of people out there who do sell online leads that are scammers.

But for the most part, it's because the people that go into it, they don't really know what they're doing and they don't know how to optimize the leads that they get. So the first kind of thing I want you to think about when it comes to buying leads is where are you getting them from? So, of course, not all people that sell you leads have the same quality of leads. In fact, one of our coaches, Dustin Carlson, who's in our program, so he coaches on.

making phone calls, and this guy will make between 1,000 and 1,500 calls a week. He has two types of leads that he buys, and he has a very successful business. Last year he closed-funded, 370 mortgages based out of Houston, Texas. He buys bottom of the barrel internet leads for about $7 a pop. Those leads are sold to four or five other people and they are called by all people aggressively. And he phones them aggressively and is extremely good on the phone.

So he also has another type of lead that he gets where he gets live transfers and they'll spend about $125 for a live transfer. And the live transfers, of course, will convert higher, but it's a lot more expensive. and so both of these work and the thing about destin with these is that he's willing to spend the money to experiment which is i'm going to talk about in a sec but

Essentially, yes, you can make money with either one of those. But keep in mind, if you're buying the bottom of the barrel leads and they're sold to multiple people, you're going to have to be extremely aggressive on rate. You're going to have to be extremely prompt in terms of follow up fast.

And you have to follow up a lot, very aggressively. And so he has a whole system built around like a CRM auto dialer system that's built around lead came in. I'm going to call them now. I'm going to call them in four hours, call them again, another four hours, call them tomorrow, call them the next day.

call them in three days, seven days. And sometimes the reason people buy leads, and this is just a side note here, sometimes people buy leads because they don't want to pick up the phone and call people.

This is not Dustin's situation. They kind of think, oh, I don't want to go out and I don't want to meet people. I don't want to call realtors. So I'm going to buy leads. This is going to be easy. I'm telling you right now, if you're going to buy leads, you're going to need to be good. You're going to need to pick up the phone even more than you weren't. Because if you don't.

You might as well just take your money and burn it. You won't make any money. So my first thing is, is that where are you getting your leads from? And that's kind of the first thing you need to think about. The second thing is, is do you have the resources to run these experiments? So if you have a limited funds.

you're not going to be able to experiment long enough to get it working. It's sort of like you're trying to drive your car from here to like, you know, where I am into Vancouver, but you don't have enough gas in your car. And so if you don't have enough gas in your car, you won't have time to.

iterate and experiment to figure out how to maximize these leads and you'll be like oh leads suck well no you just didn't have the resources so for instance like my buddy dustin you know he will spend tens of thousands of dollars And then at the end of it, he may lose money. He'd lost a few thousand bucks. He's like, OK, that didn't work, but he can spend enough in order for him to determine.

How do I convert these? Are they worth spending money on? All that stuff. And so if you don't have the resources to play that game, you probably shouldn't play that game. I'll talk about what you should do after, but you shouldn't play that game if you can't afford to do it. And if you listen to the episode I did with Ron Butler recently, you know, he talks about some companies are spending significant amounts of money to just convert one lead.

And these are people that know what they're doing. They're experienced and they're still having to spend a lot of money in order to convert those leads. So typically this game is for the big boys. So if you've got to have big boys, big girls have the money to do it. And if you don't have those kind of resources, then it's probably going to end in failure. And then you're probably going to be frustrated.

And it may be that, yes, the leads were poor quality or maybe that you didn't have the money in order to spend in order to figure it out. So first is where are you getting them from? Right. Second is you have the resources to experiment.

The next is you need to have really, really good systems and they have to be robust follow-up systems. You know, time kills all deals or certainly kills all online leads and speed to lead is critical. and so one of my clients that came into our coaching academy so he was trying to figure out how to build a referral-based business his company was spending 20 000 a month on facebook ads and they had a call center and when a lead would fill the ad they would call that lead within two minutes

like literally two minutes that person's getting a phone call and they've converted on average one in 20 and it still works they still made money now if you are not prepared to aggressively follow up and as i talked about you know dustin how he calls this person multiple times a day

how he calls them the next day. I mean, I've seen him on calls where he will literally phone somebody. They'll hang up on him because they've been called by five other people and he'll just phone them back. Be like, hey, it looks like we got disconnected. Most people do not have the...

stamina to do that. They're like, oh, I guess they don't want to talk to me. And so if you are aggressively follow up, you will be able to convert more of those leads. So for instance, my wife's business. So we do run Facebook ads. So I don't run any Facebook ads for anything to do with my mortgage business. I haven't had to for some time.

I have in the past, which I may touch on in a minute. But so my wife's sourdough business, she teaches sourdough baking to home bakers online. You're like, what kind of business is that? She actually does quite well at it. Well enough, in fact, that we spend on average 500. plus a week on facebook ads and we'll average a three to four row as which is return on ad spend

But we've got a great system in place. Somebody comes into that funnel over the first seven days, they get sent five very specific emails. We track the open rates, the click rates, everything. Then if they buy something else, they go into another follow up system. If they don't buy anything, they go into another. And so it's very.

built out and we literally i would say we probably double the amount of revenue that we could get from those ads because of the follow-up systems because of the emails and if you don't have great follow-up systems then you're literally going to convert

half as many of the leads as you probably could so you could double your conversion rate with good follow-up so where are you getting them from do you have resources to continue to play in this game long term do you have the systems to convert as many of them as possible

The fourth kind of thing to think about is do you have the experience to convert them? So online leads are typically more rate driven. They kind of have a rate focus because they're filling out a form. Usually that's the carrot that gets people to get them to even.

Click on something. You need to be really good at building trust and rapport, and you need to be able to help them find a solution on why you are their person very, very quickly. And if you're newer and you don't have a lot of experience, you're going to waste a lot of time. A, leads will never go anywhere.

And you won't have the experience to be able to convert them. Now, the one thing I'd say to this, the one sort of side thing to this is that there are some companies out there that legitimately buy lots of online leads or do lots of online leads. And you can go work for them as a mortgage agent or mortgage broker.

That is a fantastic way to grow your experience. So if you think about like the number of client conversations you can have in 12 months, it's probably the equivalent of three to four years. if you were just out on your own but you're not spending your money and you don't have to build the follow-up systems you don't have to cover all of those resources you're going to make less money of course you know you're not going to make as much because you're working for a company that

They're spending the money to do that, but you will build the experience very rapidly. But if you don't have that experience, you won't be able to do it. So one of my coaching clients last year, so she did quite well, about 60% of her business came from Facebook leads.

She's experienced mortgage broker. So that's the first thing. Second, she has hired somebody to run the campaigns for her because being a good mortgage broker and being good at running online campaigns, two different skills. It's like literally like, you know.

two different sports. And to be good at both, you've really got to give them focus. So she has somebody who helps with that. She also has fantastic follow-up systems. So she's got a whole funnel that people go through. So by the time that she gets on the phone, they're basically sold.

but that takes a lot of sophistication to develop. And most people don't know how to do it or they quit too soon. So they kind of get it going, but then they, oh my gosh, I ran out of money. It's not working. I spent whatever, a few thousand dollars. I'm going to have to pull the plug on this.

The whole thing collapses because you didn't have the resources to get it going. So in her case, it's working quite well for her. And then finally, so of course, where they come from is important. Do you have the resources to keep going? Do you have the systems to follow up with them? Do you have the experience to convert them? And then you must.

track everything. You must measure and track everything. So there was a period, one year I ran Facebook ads aggressively for one of my businesses and was spending up to nine to 10 grand a month on Facebook ads. I spent a significant amount of money learning Facebook.

ads, how to do them, about courses and all this. And I did okay at it, but I don't run the ads for my wife's business because even with all the things that are going on, yes, I could do it. It's another thing. So I actually pay someone else to run it for us. The one thing that my coach, so I had a Facebook ad coach that I probably spent 15,000 plus on learning how to do Facebook. And my Facebook coach would always be like, bring the data, not the drama.

It's like, oh, my gosh, look, this is not working. I'd be freaking out. She'd be like, no, look, calm down. Like, bring the data. How long have you been running the ad? I'm like, two days. Nobody's working. She's like, that's not long enough. You need to leave it at least a week, right? At least seven days. You got to look at trends.

Because it's funny how ads will sometimes not work and then they'll start to work. You're like, oh, this ad sucked. Oh my gosh, now it's working. And so you have to be able to track that. We track with our campaigns for my wife's business.

Not only do we track the ads, so the conversions on the ads, which is really easy to do in Facebook. We also track emails. What are the open rates in those emails? What are the click rates in those emails? What is the conversion? What is the upsells that we get? What are the part bumps? How many people convert into memberships?

We track everything and then we can go back and optimize it. And so we have people to help us with this. I got somebody running that whole campaign. I got one person who runs the whole Facebook campaign. And then I got somebody else on my wife's team who basically builds the entire email sequences. And she's very good at it.

In fact, this is a little plug for her. If you want to see great follow up, go buy one of her workshops. You know, I think it's like 27 bucks or something for sourdough, sourdoughschoolhouse.com. And watch what you watch the email sequences that come out. You'll be like, huh.

Interesting. So that's what I'm talking about. And then you'll notice, like, unless you unsubscribe, you're going to notice multiple ways that they continually go back to that customer base in order to create conversions. Quick recap here. So should you buy on leads? Maybe if.

you have the resources, if you have the experience to convert them, if you have the follow-up systems to maximize those conversions, if you have good tracking in place so you know what's working, and then maybe you could. Yeah, absolutely. If you're brand new, though, I would say it's almost always going to end in catastrophe. You will not be able to pull this off and you're much better off to stick to a referral based business. You know, one of the guys, Nick, who came into my coaching program.

Nick was a marketer. His wife was a mortgage broker. Nick's a smart marketer. He built the whole sequences for ads and everything. He did this. He did all the stuff I was talking about.

And about 30% of their business was coming from Facebook. And they came into our program. They're like, yeah, this is working, Scott. We're doing pretty well with it, but we want to learn how to create a referral-based business. And so we taught them how to do that, how to get referrals, how to build relationships, get referrals from realtors. And within three months, he shut down the ads. He's like, dude, this is working way better. Like this is higher conversion.

You know, we're not buying down as many rates. And so in his case, and he could still do it. He's got the absolutely. But his keep in mind, there's two of them. His wife is the mortgage broker. He's the marketer. And he was still like, wow, referral based business is just going to work. For most people, I'm going to say, you know.

80 plus percent of you out there don't even play this game. You're playing a game that you're probably not equipped to play. You're probably going to lose money and then you're probably going to be frustrated. So stick to referral based business. And if you want to find out how we show people how to create referral based business. You can check out 10 Loans a Month Academy.

That's 10loadsamonth.com. We're currently full, but we periodically open up when we have space. So if you get on that wait list, go to 10loadsamonth.com. And when we have space, we'll let you know. We always sell out because all of our coaches, I'm one of the coaches, all of our coaches are busy, successful mortgage brokers. And so we have limited spots, but I can tell you that it's absolutely something.

worth checking out. Check that out. Thanks again for listening to this episode. And if you are buying ads with there, good luck, man. It is not for the faint of heart. So hopefully you're having success with it. I have found that out of five people I talked to that are trying it, one out of five will be doing it successfully. The other four will be fumbling.

their way through it and probably wasting money. Good luck out there and we'll be talking soon. This is an I Love Mortgage Brokering production.