lead generation

Why Lead Generation Companies Suck

The more I learn about lead generation in the legal industry, the more I believe that our industry is filled with charlatans selling trinkets to ignorant lawyers with deep pockets. Think about it: we are the ideal pray. We don’t have time to learn all about digital marketing and SEO; but, at the same time, we think we know everything about everything. Add to that our collective need for new business and the general profitability of the practice of law and you have the perfect target to sell junk leads.

Routinely, I hear this at conferences from sales people: “If you get one case out of this, it pays for all of it and so much more, doesn’t it?” How did that become the baseline for quality marketing? Why don’t lead generators sell the fact that the dollars you spend with them will give you the highest rate of return out of any marketing spend out there? The answer: because that’s not the case.

The reason that our firm decided to market for ourselves and produce our own leads was that there is no good option out there. For perspective, we now produce over 2,000 potential new client leads per month.  Out of that, about 50% come from non-paid search, 30% from paid search, and 20% from social media (primarily Facebook). As we’ve grown our marketing efforts, we’ve tried almost every lead generation company out there. None of them have produced what I consider to be consistent or valuable results.  I’d like to share my perspective on how lead generations companies work in general.

How It Works: Owned Properties

Some of the larger companies have owned properties, or smaller companies that have been acquired by the larger company, that produce many of their leads. I am unsure what percentage of leads actually come from owned properties, but I would wager that it is a minority of the sold leads. Ask the next lead generator to give you the domains that they produce their leads from. Most likely, they’ll come back with something like: “It’s proprietary.” That’s misleading. Nothing about internet marketing is proprietary. There is not a secret sauce for ranking on Google. It’s an open recipe that consists of 2,000 ingredients. If you do them all together, you get results. Claiming that the process is “proprietary” either means they don’t have a clue or they don’t want to tell you because it makes them look bad.

One note on leads that come from owned properties: if you happen to be talking to a company that has an authoritative domain, go to Google and type in the keywords that you’d want to get leads for like “personal injury lawyer [your city]”. I’m willing to bet that those ‘authoritative’ owned properties are not in the top 5 results. If that’s the case, why would you pay them money for leads that are coming in through results on the second or third page of Google? Most likely, those leads were already turned down by the companies whose domains rank on the first page. (A common joke in SEO circles: Q: Where’s the best place to hide a body? A: Page two of Google.)

How It Works: Affiliate Marketing

Owned property leads aren’t even the worst part of it. The real scum of the lead gen earth are affiliate leads. Most lead gen companies get the majority of their leads through affiliate partners. Some major companies do not use affiliates, but most do. I would ask any lead generator you are considering about this directly.

Affiliate marketing works by allowing affiliate partners to funnel their leads (new/excess/otherwise) into a vendor’s sales funnel. In theory, affiliate partners are supposed to produce high quality leads and send them unfiltered to the lead gen for resale. However, in practice, many of these affiliate partners cherry-pick the best cases and only send the junk through to the lead gen company for resell, thereby significantly diluting the quality of the leads you are buying. I’ve even heard of off-shore affiliate partners that recycle old leads and sell them to multiple lead gen companies so that they can make money multiple times on the same lead.

While affiliate leads are hands-down the worst, a growing number of junk leads are coming from social media.

How It Works: Social Media

Social media is a new medium for advertising. It offers a multitude of demographic targeting options that have never before been seen in the online or traditional advertising space. You can now market to people on Facebook who are between the ages of 37 and 42, that have 2 children, that have college degrees with a household income between $50-75k, and that have been shopping for a Honda Accord within the last 6 months and intend to buy one within the following 6 months. Yes, I’m serious. All of the above options are available on Facebook’s ad platform. So, with all these new ways to target the perfect audience, you’d think that incredible leads would be coming from this platform. That assumption is almost always incorrect.

There is an inherent conflict of interest between the lead gen company and the lawyer. The lead gen charges on a per lead basis. The company is incentivized to produce as many leads as possible. If you spend the time and energy to properly target a social campaign, you will likely spend 10x more per lead and get 1/10th the number of leads. You might ask, then, “Why don’t the companies simply increase the price and sell higher quality leads?” The answer is simple: lawyers compare price per lead to other lead gens and have no way to confirm that your “high quality” lead is that much better.

So instead of doing that, lead gens expand the audience, un-target the demographics, and spam your Facebook users’ feeds using click-bait and many other tactics with the end goal of getting more people to fill out their form, regardless of the quality of the lead. It ends up being a battle of attrition: How many leads can I sell this lawyer until he realizes they are all garbage? That is the question most lead gens seem to be truly asking themselves, although I doubt you’d ever hear one of them admit to it.

Data is King

Your incentive to improve is the value of a case or your attorney’s fee. A marketer, in reality, has no incentive to improve. They usually work on a flat fee or a management fee that equates to a percentage of your ad spend. Whether they spend your $1k/month well or wastefully doesn’t affect their revenue on the spend.  The key problem is that the metric marketers use (price per lead) and the metric lawyers should use (ROI) cannot be bridged. The information on lead pricing, typically, does not translate into the law firm’s CRM or case management system.

I highly recommend you begin to do that if you are not already. Only if you track your marketing source and tie that data into revenue produced will you truly be able to see ROI on marketing spend. It’s best to get granular with this. If your source category consists of “Internet”, you are not doing it right. You need to know if the lead was non-paid Google, social pay-per-click, paid search Yahoo, referral from Yelp listing, etc. Otherwise, you are probably just throwing money and resources at all these media and have no idea whether you should prioritize one over the other.

What Should You Do?

You are probably asking yourself what the hell you should do for leads if lead gen companies are so terrible. I get asked that question almost daily. My answer typically is that I started doing in-house marketing for my firm for that very reason: I don’t think there is a great solution. Your best bet is to find a digital marketing company that is not in the legal sector and vet them to the best of your ability and work with them to help them understand your industry. I would spend 80% of your budget or more on paid search to start and slowly work on your website’s organic rankings.

If you don’t trust any online marketing companies, simply start an AdWords account in Google and go after exact match keywords (Ex. “Personal Injury Attorney”) and limit the ads to your location. This basic level of AdWords is simple enough for anyone to set up and Google’s support team is great in helping you out. If you are not spending enough, add another phrase. If you are spending too much, pause a few. This sounds like a shot in the dark but I guarantee, in the long run, you’ll be better off doing it yourself than buying leads.

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