Continued Reforms Will Make Lead-Gen Industry Stronger

by Brad Powers, Sep 13, 2007, 1:30 PM

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A recent Wall Street Journal article on lead generation painted a picture of pending doom for "incentivized" lead generation marketing. The reality is not nearly so bleak, if one considers an Internet advertising revenue report conducted by the Interactive Advertising Bureau and PricewaterhouseCoopers showing that revenues continued to grow in 2006, totaling $16.9 billion, up 35% from 2005.

Providing incentives for consumers to try products, services or provide personal information is by no means a new or revolutionary marketing technique. Banks employ this practice when they give a toaster (or blender, or gift certificate) to customers who open a new account. Convenience and groceries stores regularly stock milk and eggs at the back of the store so that consumers have to dance their way through aisles of other enticing items en route to their destination product.

The problem with much of the recent press on the topic of incentive marketing is that it is incorrectly focused. The issue is not that there is an inherent problem with the technique of using incentives or cross-sells to attract consumers. Problems arise with the execution of this practice.

Incentivized lead generation is extremely effective at generating a lot of leads at exceptional pricing. Outside of this medium, there are very few places where a marketer can generate 20,000 leads per day. That's the appeal. It's also the pitfall. The success of the medium brought many players into the space -- some with more questionable practices than others. Unscrupulous practices are bad for consumers, marketers, and legitimate lead generation companies. But the industry should not be indicted because of a few players.

The majority of companies in the lead generation industry employ best practices, and provide quality leads or significant return on investment to clients. Companies in the lead generation space have dedicated extensive resources to garner the credentials for TrustE and Safe Harbor certification. These generally require meticulous processes with regard to the handling of consumer data. In addition, the Online Lead Generation Association is constantly touting best practices to the industry, taking the high road on this important subject.

Employing best practices means that when enticing consumers with promises of a shiny new iPod, consumers must know exactly what they need to do to qualify for the iPod. Incentive marketers must do this up front -- and there cannot be a bunch of "gotchas" hidden in the terms and conditions verbiage. Incentive marketers must have valid telephone numbers and contact information for a customer service team. And finally, if the consumers do qualify, they must receive their incentive (that new iPod) exactly as promised.

Failure to comply with industry best practices can be defined as fraud, and this is where the Federal Trade Commission investigations have come into play. Outside of the obvious avoidance of fraud, legitimate lead generation providers employ sophisticated methods to insure that marketers are receiving valid leads. Some of the best ways of doing this are by targeting, data verification and cleansing.

Targeting techniques used by lead generation companies can include anything as basic as showing only specific items to consumers who meet a certain demographic profile, to asking specific market research questions for clients and eliminating respondents who don't answer as desired (example: "Do you have Medicare?" If the answer is no, then the lead generation partner does not send this lead on and does not charge its client).

Cleansing, or the validation, of a consumer's address, phone and email information can be executed by comparing consumer records against U.S. postal records. If they don't match, the consumers can be scrubbed from the data that are sent to the marketer.

Verification techniques generally take the form of double or triple opt-ins, or of further qualification points a consumer must indicate as "true." For example, consumers can be asked to opt in for offers not once, but two or three times to ensure that they are truly legitimate prospects. Most lead generation companies employ a variety of media to gain the attention of consumers, incorporating a blend of display, search, micro-sites and branded co-registration. In many cases, this integrated approach garners the best results.

Incentive-based marketing is a marketing technique -- it can be executed well or poorly, ethically or not. It works best as part of a diversified marketing campaign. In many ways, it can be the beginning of a meaningful dialogue with a consumer, if done in a manner that respects consumers, their privacy and their needs.

Suggesting it's impossible to generate quality leads from incentivized lead generation is dead wrong. Anyone who says it's perfect for every marketer is equally incorrect. If marketers do due diligence to find responsible vendors, understand exactly what incentivized lead generation is, price it accordingly, and use technology to enhance results, it can occupy an important place in a company's marketing strategy.

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