When it comes to shared leads the most important factor for a buyer is lead quality. Pretty obvious statement, right?
As obvious as it might seem the industry is in the process of a correction simply because lead quality did take a back seat to other factors in recent years. Before we look at the correction, let’s take a look at how it all happened.
A Fever Pitch
The 2000’s were a decade of extreme growth for internet based lead companies. High speed access was readily available , and people were starting to shop for and buy insurance online. An industry was born. Traditional and newly formed lead companies began racing to get their piece of the pie.
As we’ve previously discussed, a ping/post system was created to allow lead companies to sell leads to each other when they did not have a buyer. This “ping tree” model is a solid method to ensure consumers requesting a quote actually get a response. Everything works well as long as there are some controls in place.
As the decade wore on the race for market position among lead providers intensified. The focus was quickly shifting to lead volume and scaling operations. Access to the ping tree was loose. Each lead company could allow affiliates and partners the ability ping leads into the system which lead to an eventual lack of control.
A bogus lead sent into the system and directed through multiple “partners” became very difficult to track and people started to take advantage.
Adding to the problem was a lack of oversight over affiliates industry wide. In order to get volume and scale, many programs allowed anyone to start selling leads with no approval process at all. While most sellers have sophisticated lead scrubbing filters that can prevent leads from Mickey Mouse and John Doe from being delivered, nefarious affiliates took things to another level. Bulk leads starting coming in with real user info that passed scrubbing filters. Leads from real people who never requested an insurance quote. This problem was one that filters could not weed out. It was a problem that required more oversight in general.
The Fall Out
By 2009, the industry was starting to feel the impact of a focus on quantity over quality. Agents were lashing out publicly. Bogus leads and low contact rates had drastically changed the value proposition of internet leads. Even though most sellers provide credits for fake leads they still cost agents time and lost productivity.
Bad leads going into the system drove lead prices down for sellers. In response to the lower payout, many quality lead sources began to seek alternative channels to monetize their leads. It was a downward spiral. By mid 2010, the industry had a tarnished reputation, and it became very clear things needed to change quickly.
>>> Keep Reading: Regaining Control
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