What is a BAD Lead? It seems like an easy question to answer, but many of us find it difficult to hold ourselves accountable to the definition. Let me explain.

Over 80 percent of those we spoke with told us a bad lead is a bad phone number, a disconnected phone number or someone who said they did not apply. What we in fact discovered is that, at times, a good percentage of us are looking for credit for customers we cannot get in touch with or even some who want credit for leads that did not go to application. If the lead company provides a lead from an interested party and the contact information is valid, then they did their job. After that the onus is on us and our trained loan officers to close the deal.

There needs to be a healthy give-and-take in the relationship between the lead vendor and the mortgage company. Just like a dating relationship, we try to be on our best behavior, and somewhere down the line, our true colors are shown. Each of us needs to have a healthy appreciation of the other’s business; if we have that, we can put our best foot forward in maintaining a strong business partnership.

We all know changes occur in our operations, e.g., new loan officers start, programs change, new competition etc. Contrary to a few beliefs out there, not every lead you receive will fund. It is the lead provider’s responsibility to prevent you from getting “bad” leads and in fact credit those where the customer obviously was not interested. That being said, it’s the mortgage company’s responsibility to not take advantage of the situation.

In my travels to industry tradeshows and seminars, I am still amazed by the type of questions I get from lead buyers: “Greg, do you know what companies ‘guarantee’ their leads?” or “Can your company ‘guarantee’ a funding rate of 5% or higher? Do you give credit for ‘ineligible’ customers?” When I ask them their definitions of “guarantee” or “ineligible,” I get a variety of answers.

The simple truth is that their questions are a direct response to the frustration that has built up over the past couple of years. A healthy initial dialogue on the part of the lead buyer and seller is needed before marketing dollars are spent and contracts are signed. There are some specific questions to ask the lead provider in determining the overall value and lead quality they bring to your company.