Bigger revenue share on leads

[barrycast]

As the market tightens up - I believe good quality leads, ie those with a compelling reason to remortage or take a secured loan and who are not hamstrung by high LTV or so much adverse as to be unplaceable will become even more valuable.

The flip side is that right now it appears from experienced affiliates that prices may be dropping for leads - primarily due to the increased difficulty in turning a potential lead into revenue (happy to be corrected on this).

Wonder whether there will be a move towards revenue share ie rather than affiliate receiving a larger price per lead - that a token payment is made for the lead and then a large chunk of the fees gathered is shared out (£300/£500 to affiliate per completed case).

I know some companies pay back end - but it is not a true reflection of revenue brought in - most seem to pay £100ish and not paying up front for the lead.

As a business moving forward this is certainly something that we will be looking at.

Appreciate the views of all affiliates in financial and fellow brokers/introducers.

[Michael_Anthony]

We pay between 4.5 and 6.5% of the loan value (on loan values of £10k plus) on completion as a back end as an alternative to our CPA offers. We have found that most affiliates still prefer the known quantity of a CPA offer though.

Some of our members are achieving much better results through this back end deal than they would if they had sold their leads on a CPA basis, but there are others who just can't seem to make the back end work, even though their CPA leads have historically good conversions.

My view is that whilst CPA offers exist, most affiliates will always opt for these rather than take the risk and cash flow hole that the back end deal represents.

However, as CPA offers get reduced in line with the difficulties in placing business with lenders, I can see the back end becoming increasingly attractive.

[peter113]

your right that better quality leads will attract a better price - problem here is several fold for the buyer

1. loan to value needs to be right for the product ie 75% or less for adverse / 90% or less first time buyer etc
2. you can never judge the clients propensity to buy from a lead so quality will never increase more than criteria stated above
3. arent leadpoint already doing this ? - can they comment further - as a buyer can say they give me the option to state 75% or less for adverse.... trust me leads still sell cheaply and not many takers
4. dual pricing effectively means broker have a lack of products to compete againt going direct to the lender unless loan to value is 65-60% or less -

they only way to get a good lead is for there to be more information provided to the lead buyer and then you get into regulatory issues

[peter113]

back end is great for a broker as a paye as you earn effectively and would lead to more broker demand.... alot of brokers have a distrust for lead suppliers on CPA believing that any old rubbish comes thorugh - bearing in mind conversion rates are very poor .... we therefore stick with larger suppliers who a refund policy etc

as we see it payments for back end vary between 2% and 6% - just remember most brokers will give you 50% of their earnings on back end and therefore the more you want, the more the customer has to pay, puts more pressure on price if they are shopping around -

if you take less back end you might get more conversions which = greater revenue

higher % for selling PPI - but broker / lenders look twice now due to all misselling issues


secured loans still offers a good revenue stream on commission share, mortgages never paid as much so if I were selling leads would focus on secured loans - with low LTV

[barrycast]

Really intelligent insight by Michael and Peter.

There does seem to be this ongoing trust issue.

Lead Provider - Can understand that they want money now - better to get £30-£60
per lead and focus on producing more new opportunities - can they trust the broker to pay them what was promised at the back end?

Broker - Some stuff that is passed off as a lead is outrageous - wrong ltv - arrears not undeclared - client was just playing about not that interested. Not the affiliates fault as such - more the client who filled in data, but I think brokers feel the pain when they pay £50 x 10 leads and get one maybe out of it.

Think there must be a middle ground in all this £10 per exclusive lead - £40 when client signs up(usually in a week) £200 on completion (few weeks later)

Just needs to work for everyone - once you have an ongoing relationship of mutual trust
this benefits all involved. Broker gets well defined opportunity - affiliate realises far more value out of deal.

Anyway if that works for anyone oute there -PM me - Scotland mortages only - still like to go out and see the whites of their eyes!!

[tijan]

Nice thread,

I was actually searching for a thread like this couple of days ago, so good it came up days later.

As anyone dealt with any company/ brokers that pay on completion or back end deal as you called it. Any good experience, which of them would you recommend a lead seller to approach. Right.. AMS. Any other company/broker out there that knows when a deal is a good deal?