If Quality is King, What is Scoring? The Ace in the Hole?

Moderator, Alex Baydin, CEO of PerformLine, led a second-day 2009 LeadsCon panel discussion on lead quality with speakers:

• Dave Wengel, GM of Interactive Markets at TARGUSinfo
• David Sobie, VP of Marketplaces at LeadPoint
• Matt Wise, CEO of Q Interactive
• David Dowhan, SVP of Online Markets at eBureau

The discussion began with each panelist defining quality.

• Wise [Q Interactive] began the discussion by defining quality as a function of conversion rates and customer acquisition costs.
• Sobie agreed and noted that LeadPoint serves a range of buyers with varying needs. Some buyers, based on their operational costs, want only the highest converting leads. For this, they are willing to pay a premium. Other buyers, with low operational costs find that they are able to derive a strong value from lower converting leads that are also priced lower. Scoring leads based on their likelihood to convert, assigning them into band, and appropriately pricing them is a part of the LeadClass Quality System that LeadPoint has worked on since its inception and just recently launched.
• Wengel said that TARGUSinfo seeks to establish a baseline for quality. He added jokingly (but with some seriousness) that if it was up to him, incentivized marketing would be completely abolished.
• Dowhan [eBureau] said that unless a lead converted it was not a good lead. Everything else that occurred with a lead was just an indicator.
• Wise countered Dowhan’s statement and reiterated that quality cannot focus solely on conversion, but must take into account costs (as Sobie had pointed out). Often times, he said that search generated leads are perceived to be the highest quality. However, search generated leads are also typically the most expensive and do not always guarantee as good an ROI. Quality must factor in the cost per sale. Ultimately, a quality lead is a lead that provides a buyer with the greatest return on their investment. It is impossible to figure out an ROI without understanding one’s full loaded cost per sale (i.e. the number of times you may need to call that lead to get in touch with the consumer, the competition for converting that lead, etc.).

Each panelist was then asked how they go about scoring a lead.

• Dowhan explained that eBureau looks at 3 areas: user intent, data validity, and product fit.
• Wengel noted that a lead score is worthless unless a lead can be contacted. He emphasized the value of TARGUS is that it provides buyers with a greater understanding in whether they will actually be able to reach a consumer
• Wise agreed with Wengel and noted that evaluating whether a lead could be contacted was vital, but contended that conversion was equally important. A seller could just pull names from a phone book and TARGUS would validate them as contactable leads. Technology is an equally important part of the equation and is needed to better target customers. Buyer feedback is an essential input of scoring engines to better predict conversion rates.
• Sobie agreed with both and noted that the LeadClass Quality Scoring System scored both the likelihood that a lead could be contacted as well as scored the likelihood that it would convert. Buyer feedback in addition to LeadPoint random sampling are both utilized to assess the likelihood of a lead converting.

Next, panelists were asked if they used their scoring to help sellers generate better leads.

• Sobie noted that an advantage of LeadClass was that it provided an economic incentive for sellers to shift marketing spends to generate higher quality leads. Through LeadClass leads are segmented by quality and sold at prices that reflect their respective performance. This improves market efficiencies, rewarding direct marketers with the “True Market Value” for their marketing efforts and higher payouts for higher performing leads.
• Wengel noted that TARGUS helps sellers as it helps them to understand that lemons can’t be sold within the market.
• Dowhan noted that 30% of the leads that they score are valueless. Scoring provided greater efficiencies by helping sellers know how much they can charge.

With the final question, panelists were asked how much they charged for their scoring services?

Sobie noted that LeadClass quality scoring is included in the price of the lead sold through the LeadPoint exchange and that no additional fees are tacked on. The other panelist noted that the value was dependent on how predictive their services were.

Key Summary Points of the Panel

1. Buyers need to provide feedback to help sellers provide them better leads. This was a key theme brought out in many panels at the conference.
2. Quality needs to be tied to costs to more effectively determine a buyer’s ROI
3. Lead scoring was useful in predicting the performance of a lead. This is particularly useful when it can be used in helping a buyer with their purchasing decisions.

Readers interested in learning more about LeadPoint’s industry-leading, quality initiatives may do so by clicking on the following links:

• LeadClass Quality System [LeadPoint website]
• LeadPoint Launches LeadClass Quality Scoring System [press release]
• LeadClass – Quality Taken to an All New Level [blog post]
• Zen and the Art of Lead Gen [blog post]

Making the Most of Current Economic Conditions

Two second day LeadsCon panels (Kings of Counter-Cyclicality and The Future of Lead Generation – Getting to 2.0) touched on tactics that companies should follow in order to succeed during our current economic conditions.

Key takeaways include the following:

• Stay focused.  Don’t get distracted by other companies’ successes and lose focus of your core competency.  Stay true to your business model and be the best within your given niche.

• If you can, take advantage of lower prices in ad inventory.  Current low costs provide an excellent opportunity to significantly ramp up one’s business and attain critical scale.  By growing now, you may be able to better absorb subsequent ad increases later on through economies of scales.

• Focus on technology to create barriers to entry (this is sound business advice in both good and bad economic times).

• Recognize that lead generation is really about connecting consumers with something they want.  Thus, be sure to leverage consumer information to provide consumers with the services they are seeking.  Companies that invest in technology that processes data to better target consumers will be dramatically smarter than their competition and will serve their customers better.

• Be cognizant of the power of social media.  Over 100 million Americans are currently on the Internet communicating through social networking sites.  Consumers are blogging about bad experiences they have with companies.  All one needs to do is search Twitter to see what consumers are saying about a company.  If a company provides a lousy consumer experience IT WILL get picked up in social media.  Both employees and consumers are ganging up against companies that provide poor services.

• Get information back from your customers and use it to better serve them.  This will enable you to provide more value to your customers and subsequently grow in scale.  If you are a customer, give feedback to the company you purchase from so that they can improve the services they provide you.