How Lead Scrubbing Can Kill the Goose that Lays the Golden Sales Leads
If I haven’t beaten the point into you by now, online lead generation isn’t very easy if you don’t have the right people.
Lots of moving parts… lots of specialty knowledge… and lots of “stuff” in general that you have to master if you don’t want to your cost per lead to skyrocket.
But there are some brave souls that venture into it.
For that, I give you a hi-5.
(And if you need help generating leads, why ain’t ya calling us?)
Now, if you’re working with a lead generation company with affiliates, listen up.
I know I mentioned that unless you know what you’re doing, a WRONG affiliate network can really screw you big time.
But the sword goes both ways – in fact, you can screw them.
I’m a man of my word and ethics.
The ONLY way to win in the business world is win-win.
I don’t recommend you do this.. but you should be aware of this in case any of your uninformed colleagues give you any unintentional advice to shave leads.
Yes, scrubbing, or more specifically, shaving leads.
In the affiliate world, where fraud is rampant, lead scrubbing is quite prevalent.
What is it? Basically not giving credit to affiliates for the work they’ve done.
Why is it done? No idea. You can call it shady/evil business tactic but it’s routinely done.
For example, suppose you’re willing to pay $20 for a lead and you strike a deal with the affiliate network.
The affiliate network brokers the deal to its affiliates at $18 per lead.
A top producing affiliate brings in 100 leads per day.
The owner of the shady affiliate network OR the advertiser (lead buyer) decides to scrub 2, and record only 98 leads.
Eh, only 2… no big deal, right?
Now what if he scrubs 3… or 5… or 10… where do you draw the line before the affiliate decides that enough is enough.
In fact, in certain industries, as much as 17-23% of leads are shaved.
Lead Scrubbing is STUPID
Whoever is doing the scrubbing (whether it’d be the lead buyer or the affiliate network) has NO idea what the margins are for the affiliate.
Only the affiliate knows (duh).
In fact, even the SLIGHTEST of the scrub can mean that the advertising campaign he or she is running can be positive or negative.
Yes, the slightest… i.e. even 1 lead scrubbed.
Let me give you an example.
Suppose an affiliate network has a $50/lead deal where a super-affiliate (i.e. affiliate who does a lot of business) brings in 100 leads a day.
That is $5,000 total revenue per day for the affiliate.
Suppose 5% of the leads are scrubbed, and only 95 leads are recorded, netting the affiliate $4,750.
Eh, not so bad right?
The advertiser or the network keeps $250… but affiliate is still happy..
1) You have no idea what that affiliate’s cost to revenue is.
If his cost was higher than $4,750, the greed just turned this affiliate’s campaign into a negative campaign.
Affiliates have no loyalty… affiliates are in it for the ROI just as much as you are.
The day your campaign turns negative, affiliates flee like roaches.
2) You have no idea what the affiliate’s financial strengths are
Affiliates have a payment term that’s different from the payment term that the affiliate network has with the lead buyer.
In another words, if his advertising costs are high yet it takes 2-4 weeks for him to get paid, he has to float the costs on his credit card.
What rate does he pay? Who knows.
When does he have to pay his credit card? Who knows.
And what if the lead buyer runs away, or goes belly up… or God forbid, the affiliate network goes belly up.
Then the affiliate doesn’t get paid.
If he doesn’t get paid, trust me.. he WILL tell his affiliate buddies about your company or the affiliate networks he is with.
If you get “blacklisted”, that’s it.. say good bye to affiliate marketing as a source for your lead generation because these affiliates are 1) internet savvy and know how to ruin your reputation and 2) they’re quite bitter people.
Trust me.. i used to be one of them. But i’m reformed! <smiley face> <peace sign>
3) You just made your offer not very interesting.
Suppose, the affiliate spends $4,500 to make $250.
That’s 5.6% return.
Suppose the affiliate spends $4,000 to make $750.
That’s 18.8% return.
Now, is your offer the ONLY offer on the planet?
There are LITERALLY THOUSANDS of offers where super affiliates can make 20-50% return daily with their eyes closed.
By scrubbing leads, your offer went from slightly interesting to roadkill.
Don’t be greedy.
Don’t be stupid.
Don’t kill the goose that lays the golden eggs.