Back end deals or upfront payments?

[dean1st]

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I have noticed, whether calling people through business directories or inbound through advertising that a few people are happy to pay leads up front, but others aren't.

I must admit I dont understand working ooff the back end, the reason for this is because it costs more money.

example we ask for £100 per IVA lead all qualified to meet your criteria etc etc and thats it, where as on the back end if it converts it makes up to £300, so surely we are saving you money by asking for payment up front.

would like peoples views on this as much as possible, because it could change how my company decides to work.

Thanks
Dean:

[pfsltd]

dean,

the problem is a £100 IVA lead that meets the clients exact criteria does not always turn in to a IVA hence the reason people will want to go back end

[johnd]

Hi Dean,

We have always maintained that upfront payment is better. When you work on the back end you will find that not only are you dependent on your own abilities to create business, but also the abilities of whoever you have given the lead to.

My view is that when someone has paid upfront for a lead, they will be much more motivated to try and convert it to business as they will need to make back what it has cost them.

In the instance where leads are coming in for free and a company is inundated with business/ have met their monthly target, what motivation is there to try and convert a lead that costs them nothing. It is like optional business.

Now of course I'm not saying all companies are like that and the prospect of big commission payouts can be tempting but i would suggest that doing it this way would be a bit of a gamble.

It isn't even that there is a shortage of pay per lead opportunities. We are not the only guys that do this and there is a healthy amount of competition around that ensures that affiliates are well placed to get great ROI through up front pay per lead.

Hope that helps,

John

[abc]

dean,

the problem is a £100 IVA lead that meets the clients exact criteria does not always turn in to a IVA hence the reason people will want to go back end

also to be honest on a back end u can get alot more than £300 £600-£1000 is the norm...

but the questions are

1, do u want to wait for your money up to 2 months
2, can u trust that company 100% that they will do what they say

the reason front end works so well for lead generators is cos we get paid faster to then re invest to make more leads and hopefully grow..

we have all sent leads to a person that has f**ked us over on a back end cos conversions too low or not working the leads properly. or just not paying u. and then u are back to square 1 start up again or bancruptsy..

Rick

[KerryG]

Hi Dean,

You could always do a hybrid split - where by you recieve say £25 upfront & 25% or however much commission on a backend deal.

That way all parties are happy.

Just a thought.

Kerry

[dean1st]

Well I do have clients on board cause at the moment we work on upfront payments only.......but everytime you call a business who wants to work on back end deals, dont seem to realise or want to kno the work we do to get a lead that qualifies to their criteria.

I suppose if the reputation for lead generators werent so bad, then maybe this wouldnt be an issue

[Peter1_G]

Hi Dean,

We have always maintained that upfront payment is better. When you work on the back end you will find that not only are you dependent on your own abilities to create business, but also the abilities of whoever you have given the lead to.

My view is that when someone has paid upfront for a lead, they will be much more motivated to try and convert it to business as they will need to make back what it has cost them.

In the instance where leads are coming in for free and a company is inundated with business/ have met their monthly target, what motivation is there to try and convert a lead that costs them nothing. It is like optional business.

Now of course I'm not saying all companies are like that and the prospect of big commission payouts can be tempting but i would suggest that doing it this way would be a bit of a gamble.

It isn't even that there is a shortage of pay per lead opportunities. We are not the only guys that do this and there is a healthy amount of competition around that ensures that affiliates are well placed to get great ROI through up front pay per lead.

Hope that helps,

John

Hi John,

Just for the record, as an IVA merchant and not a DM/LOAN/INSURANCE provider,
people may be best to know that an IVA is a form of bankruptcy and not something clients/customers want or want to do, it is a solution in only the most severe circumstances, cannot be sold and relates to the insolvency act (Government controlled legislation)

So to be fair you really cannot use such blanket assumtions for this type of LEAD/INFORMATION/FULL CUSTOMER HISTORY/INSIDE LEG MEASUREMENT.....or whatever may be provided by the generator of the LEAD!

It is all down to conversion which creates the aquisition cost. and these people, (IVA people)) are few and far between, appox 140 per day at the last count.

so pay per lead may work for other environments within the finance industry it is very difficult to make it work in the IVA market, and I know from experience

Best Regards

Peter

[johnd]

Hi Peter,

Thanks for the clarification, while I admit that the experience I bring is nearly completely in mortgages and loans some basic things still stand whatever the lead type:

If an Insolvency Practitioner (IP) calls the prospective client within minutes of the enquiry then the conversion will be higher than if they wait till the next day. If people don't get a quick response then they will go elsewhere.

If someone has paid upfront then I believe that they will be more motivated to call them quickly. If however they are receiving the lead with no upfront cost then what's to encourage them to try to call at all on a busy day.

In the past we have sent a large number of leads to a well respected IP and they only emailed and didn't even call. It is no wonder that their conversions were poor.

John

[Peter1_G]

Hi Peter,

Thanks for the clarification, while I admit that the experience I bring is nearly completely in mortgages and loans some basic things still stand whatever the lead type:

If an Insolvency Practitioner (IP) calls the prospective client within minutes of the enquiry then the conversion will be higher than if they wait till the next day. If people don't get a quick response then they will go elsewhere.

If someone has paid upfront then I believe that they will be more motivated to call them quickly. If however they are receiving the lead with no upfront cost then what's to encourage them to try to call at all on a busy day.

In the past we have sent a large number of leads to a well respected IP and they only emailed and didn't even call. It is no wonder that their conversions were poor.

John

Hi John,

My backround is Sales and Marketing, for over 20 years, and i purchased in excess of 2000 IVA leads @ £100 up front in 2007, i am not the IP my job is to turn it into business, my comments on IVA leads still stand, please just realise that it is not !! a sell able product it only a solution that fits a very few people so even with the resources of DFD who have 28% of the market. I think the 140 people who enter into an IVA a day (21 day month) will be very specially cared for and attended to! don't you think,

The point or problem is how many at whatever criteria you fix do you speak to to find the 140, and paying per lead with the current prices is just not good business, unless you are as good as me that is. But even I have to admit faliure at some point

I have a very reasonable deal for Mortgage Brokers at the moment, PM me with your email address and send it over John.


Regards
Peter

[brickblue]

Dean

It's a gamble to deal on back end business with some one who has no gurantee to give the best to complete the sale.I abolutely agree with John what he said as you can't waste your time to wait until 4-6 weeks long time to share commission with the broker.If you just think of oppotunity cost for long lead time the conclusion will be you losing something not asking upfront

Last year I first started working as introducer with a broker who was not FSA regulated.This guy promised to pay simply 35% of the commission he earns from packager according to his company policy.But he cheated me once I passed over dozens of leads to him after successful placement of DIP he asked me to send my copy of CCL.When I apologised to say sorry I don't have but will get one in future he refused to pay me commission until I have my CCL.Ultimately I didn't get paid.Just imagine this is the way we learn from most mortgage brokers who like shafting introducers

Thats not the end.I am attached with secured loan specialist in north west who never gets the issued documents back from client once quoted.Is that my fault being an introducer for back end sharing with wrong peoples ??

I will end up with saying for good quality lead seling upfront payment gives good value the effort we give.But if anybody say 'sorry we only share comission' , then you need to think twice are you really going to be p**** off


Tareq

[daz1034]

umm well i read this with interest.

I must admit i have had only good experience of back end but that was in a different market and i was dealing with a company that worked dam hard to close and in turn we worked dam hard to send leads that new exactly what was going to happen next and fully understood and wanted to go a head.

Now it has been some time since i have worked in any big way with a 3rd party as are last vencher was fully in house. but that is about to change and we are looking for 1 or 2 partners to send leads to and am ok working on a back end deal but reading this i think maybe it is not such a good idea.

On the other hand i will pick who i send them to and if i don't trust them or think they are going to work hard to make us and them money i wont work with them.

The idea about X up front and x% back end is a good one if not a bit heavy on the administration side.

[abc]

a big thing is make sure the leads are worked

dont deal with companies that only send doc's out in the post..(lower conversions)

and ones that are already taking on too much business now..

i have found working with local smaler companies it will work in your favor to work back end as they will do their best to bring the bacon home as it is their livelyhood as well that is on the line.

but then u have to find a broker in every county

Rick

[Michael_Anthony]

We offer a choice of back end or CPA for our secured loans and unsecured loans programs, allowing our affiliates the choice.

Back end works well if you have confidence in your lead quality and can afford the hole in your cash flow that the 2-3 month conversion cycle causes. CPA works well if you can't.

Overall, for secured loans, most of our affiliates opt for the CPA deal. For unsecured, it is almost exactly a 50/50 split between back end and CPA.

Critical when selecting a broker for back end deals is a huge lender panel to ensure that your leads have the highest chance of converting. Back end deals with small brokers, in our experience, do not work out well for the affiliate.