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How to Determine Lead Quality

Posted March 18, 2007 04:03 PM by Steven Talcott Smith

In last week's article, "Online Leads Require a Responsive, Human Touch," we started to examine the service expectations of Internet buyers and the implications for agents who work with them. This week, we will cover some useful concepts to help agents understand the different types of online lead generation with a focus on judging lead quality.

Traditionally, lead sources are compared in terms of the close ratio or the number of leads required to produce a single closing. While the close ratio can depend on how the agent responds to the lead, leads do have inherent quality. Poor quality leads disappoint agents and may cause them to dismiss an entire source of business. To determine the quality of a lead source using the close ratio, the agent needs several closings from that source. This may require working 100's of leads! How can we judge the value of a lead generation system prior to receiving many leads from it?

The Interactive Advertising Bureau recently released an industry guide to lead quality. This report details five components to lead quality:

  • Origination
  • Motivation
  • Exclusivity
  • Age
  • Verification

These components help to compare lead-generation services and determine the likely quality of the leads provided.


Lead Origination describes how the buyer is presented with the opportunity to submit his or her contact information. For example, the buyer might have used a search engine, portal or other website such as or an agent website. Other sources include lead networks and situations where the buyer may have registered for a related service or purchased a related product. Search is often the best origin for a lead as it is tied into the next component, motivation.


One of the first steps in qualifying any prospect is determining their level of motivation. What can we know about the motivation of an incoming lead before receiving it? It all depends on what happens around at the point of lead capture. A consumer who uses a search engine to locate information in the early stages of a property search is a likely buyer-prospect. When they encounter the lead capture form, what if any enticement encourages them to register? Too much unrelated enticement may decrease lead quality. How much information does the form require? How engaged is the prospect?


This component is easy to understand. How many times are the leads sold? Exclusive leads are the most valuable and the value of a lead decreases rapidly if it is resold a number of times.


How fresh is the lead? Last week, we learned that Internet buyers expect a rapid response from agents. In this highly-competitive business, the sooner you can get on the phone, qualify and cultivate the lead, the more valuable it is. "Real-time" or near instantaneous leads are the best and they rapidly loose their value as more than a day or two passes.


How reliable is the lead contact information and other data? Has any of it been confirmed by the lead source? We have all seen bogus addresses and phone numbers submitted through registration forms. It is so easy to submit misleading or false information and we can all understand why some people do this. The important thing is to know what has the lead source done to verify the information provided.

All of these components of lead quality can be scored on a scale of 1 to 10 according to the guidelines in the IAB white paper, however, just keeping these components in mind can help us size up and compare different lead sources at a glance.

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