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Leads and Trigger Leads: How Do They Work?
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Companies in the lending industry are hugely dependent a continuous stream of new customers. After all, these businesses can’t just rely on repeat customers like other retail or service companies. Once a customer has purchased the desired product, he typically won’t be in the market again for quite some time.
So finding leads for new customers is a vitally important part of business for loan providers, and it's to the point that many companies spend more time looking for new leads than closing sales. Today’s most successful lending companies are looking for better solutions for lead generation. Let’s take a look at some great sources for leads.
All About Trigger Leads
Trigger leads are excellent opportunities of the lending industry. Named because the consumer has “pulled the trigger,” or actively initiated his own loan search, they represent serious buyers with definite plans to apply for a loan in the very near future. How do they work?
Using the mortgage industry as an example, the consumer visits a mortgage loan company and fills out a 1003, or uniform residential loan application. This comprehensive application records the consumer’s employment, income, assets, liabilities and proposed loan transaction. When the application is complete, the credit bureaus verify the information through a “hard” credit pull, credit check or credit inquiry.
It’s important to understand that although the consumer has filled out the 1003 with one lender, he is not required to obtain a loan through that lender. Today’s free market has established a mechanism for other lenders to obtain his 1003 application information, and make him a loan offer that may suit his needs.
That mechanism is the trigger lead. The credit bureaus make the consumer’s loan application information available to other lenders, who are then able to evaluate creditworthiness and issue a loan offer of their own. The consumer is free to select the offer he prefers.
Most lenders agree that trigger leads are a great tool for finding qualified customers. The question becomes where to find these gems. Again, the free market has established convenient, fast and flexible approaches to provide lenders with trigger leads. Companies known as marketing data intermediaries obtain loan application information in aggregate from the credit bureaus. They process the data and turn it around to other lenders, who may purchase just the information they desire, whether for a certain geographic region, credit score, dollar amount of the proposed transaction or any other preferred data combination.
There are a couple of drawbacks to using trigger leads. First, the cost may seem prohibitive, especially to smaller companies or boutique firms. Keep in mind that the leads may seem expensive, but the upside potential is huge. A careful analysis of the return on investment can help lenders determine whether the cost of purchasing trigger leads is worthwhile. Privacy advocates and consumer protection agencies are also making some noise about trigger leads potentially violating consumer rights, but to date no legal or legislative action has taken hold in any state.
Other Sources for Leads
Trigger leads can be costly, and the competition for customers can be vigorous. For these reasons, lenders in the market for new leads sometimes choose to look beyond trigger leads for other sources of leads.
The Internet has revolutionized the way consumers shop for loans. With unprecedented speed, convenience and selection, consumers are now taking control of their financial needs and searching for rate quotes on their own. Taking advantage of new online forums for finding loan quotes, consumers find that researching loans is now a pleasure instead of drudgery.
Known as Internet marketing companies, these online forums allow a customer to fill out a single brief application with their basic personal information and lending needs. The website does the rest of the work. It processes the consumer’s data and delivers it to its lending clients, who can then contact the customer directly with a preliminary loan offer.
The customer reviews his offers and contacts the company with the terms he prefers. At that point, formal applications and credit checks are made, and the loan proceeds in the usual manner.
It is probably obvious that shoppers in online rate quote forums, while motivated, are not as far along in the process as those at the trigger lead stage. This can be beneficial for lenders in several ways. First, the competition for these leads may not be as strong. The greater quantity of such leads can enable lenders to get their message to a much wider audience.
Finally, the ease and convenience of online rate quote services generally capture a larger pool of shoppers. These shoppers may not have sought a quote directly from a given lender, yet may end up doing business with that company.
If you decide that obtaining leads from an online rate quote forum is an appropriate lead solution for your business, there are several things to keep in mind. You will want to look for a company offering leads in real time –- delays of days or even hours can mean lost business.
The company should also offer rock-solid technology with quality assurance controls that process, scrub, filter and protect the data. Look for a company that offers scalability to your needs, and a powerful lead management system. On the financial side, select a company with fair pricing, no set-up fees and no back-end charges.
Whether your business “lends” itself to using trigger leads, online quotation forum leads or both, consider your potential for growth and profitability. Leads and trigger leads can help you improve both. |
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