In my last few emails to my subscribers, I've hinted at my new venture and it's now time to reveal it to you.

Why should you care?

If you're interested in any of the following topics then read on:
- lead generation
- affiliate marketing
- affiliate management
- mortgage leads

This article gives an practical overview to lead generation, and references our own venture as an example.

It's been a year now since I launched CanadaLeads.ca, an online lead portal and custom lead management platform for mortgage agents to buy Canadian leads, and turn them into commissioned deals.

It's been steadily making profits since we launched in October 2009, and so far we've generated over 13,000 leads (see crazed customer testimonial video below).

My JV partner is active in the USA and we're now launching in Australia in a JV with one of my ASR newsletter subscribers :)

So what's a lead?

A lead is basically a record of contact information which is created when someone fills out a form - e.g. name, phone number, best time to call, property value, etc.

Lead generation is commonly seen in markets where sales calls or some sort of followup is required to close the deal. e.g. Insurance, Financial services, Real Estate, Credit Repair, Debt Consolidation.

Here's an example of a lead form (screenshot):

And so what's lead generation?

Lead Generation Definition According to Wikipedia


My definition:

"Lead gen is the business of generating sales leads for businesses, who then buy the leads and use them in their sale funnels - e.g. they call, email, and/or mail the leads and try convert them to

customers. Lead generation is a huge industry with all kinds of vendors selling lead management platforms, services like data scrubbing, anti-fraud, lead scoring, live lead transfer to agent, and of course lead suppliers."

Affiliate Marketing and Lead Generation
=========================
Affiliate marketing plays a large role in lead generation, because it's fairly easy for buyers to place a value on leads, and pay the affiliates either a flat fee for the leads or a % of the sale generated by the lead. Affiliates like getting paid for leads because it's instant - they don't need to wait for the lead to close into a sale.

There are many affiliate networks which specialize in lead offers aka CPA "cost per action" or CPL "cost per lead". Done properly, a well managed affiliate program can generate profitable leads for the advertiser (merchant) for a low cost.

It all sounds wonderful doesn't it? But there's also a dark side to lead generation...


Lead Quality
=========
Some scammy vendors will sell bulk leads which they get from questionable sources e.g. they scraped a forum of email addresses or the leads are poor quality e.g. personal addresses and tel#'s of people who filled out a "win a car" form in the local shopping mall.

The best leads are the ones that are exclusive (not resold), fresh, and motivated i.e. the prospect was searching online - demand driven "reverse marketing" leads vs outbound "interruption marketing" leads.


Lead Traffic sources and commissions
==========================
For our mortgage lead venture we generate most of the leads ourselves, using traffic methods such as PPC, social media, and organic search.

I recently launced an affiliate program for our lead system, but we don't pay per lead - we pay only when a lead sells. This encourages affiliates to provide us with quality leads and since they get a % of the sale price, I feel that they are more of partner than if we just pay a flat fee per lead.

All our affiliate-generated leads are hard coded so that no matter when the leads sells, we reward the affiliate. No relying on flaky cookies which can get erased in minutes.


Affiliate Risk
=========
Affiliate fraud is a risk for advertisers - e.g. the affiliate can enlist a group of people to type in fake contact info into your forms and get paid before you figure out most of the leads are not converting because they're fake.

To reduce this risk, make sure you pay your affiliates *after* the period of time it takes you to confirm the leads are legit, and are converting within the expected range. Also, make your lead generation affiliate program very strict to enter - don't just let anyone in.


Merchant Risk
==========
To the affiliate, there is some risk re how much they are getting paid for the leads. Most merchants will calculate what a lead is worth to them using a formula such as $profit/#leads and maybe divide it by some factor so that they are happy to pay the affiliate the calculated "bounty" for bringing them the lead.

The risk to the affiliate lies in the averaging which is done in the calculation. Some affiliates might have better quality leads that convert 2x or 3x better than others - but the merchant may only pay the same price per lead. If an affiliate feels they are bringing better quality traffic to the merchant, they should be in a good position to negotiate a higher price per lead.


Recruiting
=======
I have also made our affiliate program invite-only, and do a thorough up front screening of applicants to ensure the lead quality is high. This way we keep our members happy, since they're the ones ultimately paying for the leads.

I've made a couple videos to attract more mortgage agents (lead buyers) and also affiliates (lead suppliers). If you know anyone who can send us good quality Canadian consumer traffic in the financial service space, let me know.

We'll even talk to US mortgage lead companies who have Canadian traffic they want to monetize.

Here's the videos:
CanadaLeads Affiliate Recruiting Video



Happy Canadian Mortgage Agent Testimonial


Technology
========
We use the affiliate software from Quality Unit: Post Affiliate Pro - it's based on PHP/MySQL and was easy to integrate into our platform. PAP supports subid's and direct linking for affiliates, and has a powerful management platform for the affiliate manager and reporting for the affiliates such that they can see every lead sale and refund within their own affiliate account.

To discover more details re PAP, check out Post Affiliate Pro here.


I hope that helps you understand the concept of lead gen, and how it fits into affiliate marketing.


Resources
=======
Here's some other good resources re lead gen:

Authority blogs on lead gen:
StartWithALead - Brian Carroll's blog re B2B lead generation and complex sales marketing

Louis Foong - B2B Lead Generation and LEADership topics, good discussion of social media + lead generation

Other resources:
LeadsCon - THE Lead Gen conference

Top 20 CPA networks - MThink's annual ranking of the top CPA affiliate networks


Some of my favourite Affiliate Management Platforms supporting lead gen (links to review pages)
==============================
DirectTrack: one of the most powerful, accurate and feature–rich performance marketing and affiliate tracking solutions, including enhanced lead management features

Linktrust: Intuitive and customizable affiliate platform with many features supporting lead generation. Linktrust is known for constantly pushing the envelope with new features.

HasOffers: White label affiliate network solution with a scalable platform and pricing, supporting leads ("conversions") via their Goal feature.

Post Affiliate Pro: A powerful, low cost, and proven affiliate management platform - can be installed or hosted and integrates with lead platform. Also has a new affiliate network version supporting multiple advertisers.


What next?

If you're an advertiser/merchant who is paying  % for sales, then you might want to consider augmenting your affiliate program paying for leads, or else you might be missing out on a segment of high volume affiliates who want to be paid for leads but not sales.

If you're an advertiser paying for clicks, but not leads or sales, then consider "moving" up to paying for leads. You still need to be wary of lead fraud, but it's easier to screen a smaller number of affiliates and detect shenanigans with leads vs clicks.

Consider lead generation and talk to some of the vendors who can provide you with the technology you will need to track your leads and pay your affiliates.

You may find that several of the vendors (listed above) already have experience in your market segment and can give you valuable advice to get started on the right track.


Cheers,
Peter Koning
Affiliate-Software-Review.com 

--- (Edited on 12/9/2010 11:59 pm [GMT-0600] by Peter) ---