Founder of The Successful Advisor, James McCracken explores whether Facebook lives up to the hype as a lead generation platform for brokers
Right now, you could be forgiven for thinking that broking has turned into a competition as to who can best use Facebook to drive more leads into their business.
But before you, too, go and spend your time, energy and money on this, it's worth exploring whether having a paid lead generation funnel on Facebook is really all it's cracked up to be.
Thought we hear stories of people who created lead generation systems on autopilot, generally these are misleading and inaccurate. Whether it is a broker who reports that they "tried traditional marketing, spent thousands, but nothing worked until they finally cracked the code", or a business whose focus is on selling online lead gen solutions, most times the tangible results fall short of the mark.
In particular, a great result isn’t about the number of new leads or how to get a lower cost per click. These are mostly irrelevant. The key metric should be how much does it cost me to actually get a new client – otherwise known as the cost per conversion – and how much more money do I have in my bank account now compared to what I had before running the campaign.
So, before thinking Facebook is your salvation, let's dig in and look at things a bit more, because there are several key questions to ask.
What is your cost per conversion? It can easily go well into hundreds of dollars per new client, so you need to compare the real cost of client acquisition to other lead gen sources.
While you may only be paying $15 per ‘lead’, poor-quality data or an uncommitted prospect can severely impact your conversion rate. I have spoken to brokers who got as many as 110 Facebook ‘leads’ from a lead gen company but had zero conversions.
Who is your target audience and what is your compelling offer? Articulating the offer the right way gets flippantly thrown into the ‘just write some good copy’ basket, but good copy is immensely harder to produce than most give it credit for and can easily make or break a campaign.
Is your business actually suited to Facebook advertising? For many residential brokers, creating a compelling point of difference isn’t easy. Sure, you might run an ad saying “If your home loan interest rate doesn’t start with a three, you’re probably paying too much”, but invariably you’ll attract rate shoppers, much the same as you get on other lead gen sites.
The brokers who tend to get the best results from Facebook ads have a niche audience to whom their message and offer is more relevant and targeted.
Many suppliers run the same campaign for a lot of businesses. If you do contact them, ask if they can generate more leads for you on Facebook, and if they give you an immediate yes before seeking to understand more about you and your business, that should be a point of concern.
The best marketers and suppliers are actually cautious about who they work with, and they don’t make a promise that they can’t deliver on. Marketing is an art, requiring a bespoke strategy – spray and pray does not deliver results.
A great result isn’t about the number of new leads or how to get a lower cost per click. These are mostly irrelevant
Are you great at selling? The sales skills required to convert a cold Facebook lead are very different from those needed to convert inbound referrals into clients, and let’s face it, if we only ever got inbound referrals, that’s all we would want. If your sales skills aren’t acutely refined, chances are your conversion rate will be worse off for it.
Next, it’s critical to look at your competition: what are the top brokers doing? By choice, most top brokers don’t invest heavily in Facebook ads. Instead, they choose to invest in relationships with clients, drive inbound referral business through strategic partners, and maybe, if they want a top-up, then they might run a campaign for a while.
For newer brokers, I recommend getting clarity on your own value proposition and delivery process before diving into paid advertising, otherwise it could cost a small fortune to learn the hard way.
For established brokers, there is often far more gold to be found offline than online. Building a business on the foundations of a great customer experience and excellent processes will outperform a Facebook campaign every day of the week. One is short-term and tactical, the other is strategic and long-term.
In summary, it's not that Facebook can't be great, because it can be. But you need to ask yourself if it is the right platform for your business, and you need to be aware that there are a lot of moving parts and it is harder than most people want you to believe to get consistent, high-quality results.
The Successful Adviser