Lead Quality vs Lead Volume

Key takeaways

• Quality only has meaning as a measured rate, not as a feeling about a lead.
• Measure contact rate, appointment rate, application rate and settlement rate separately.
• A capacity-constrained broker should optimise quality; a capacity-rich team can absorb volume.
• Track quality by source and by month - sources degrade over time.

How do you measure lead quality objectively?

Lead quality is not a description, it is a funnel. Break the journey into stages and measure the rate at each one, by source. The stage where a source falls down tells you what is actually wrong with it.

A source with a high contact rate and a low qualified rate is not a "bad lead source" - it is a source aimed at the wrong audience, which is a targeting problem you can sometimes fix. A source with a low contact rate is usually just old data being resold.

When is volume the right answer?

Volume is correct when you have spare capacity, a stable conversion rate, and a channel that does not degrade as you buy more of it. All three conditions matter, and the third is the one that catches people.

Most acquisition channels degrade with scale. The first increment of spend reaches the most motivated audience; the tenth reaches people who were barely interested. So the conversion rate you measured at $3,000 a month will not survive at $30,000 a month, and a plan built on it will not either.

If you are a solo broker with a full diary, buying more enquiries makes your service worse, your response time slower and your conversion rate lower - three costs that all land at once.

What should you do with the leads you already have?

Before buying more, look at what happens to the ones that do not convert immediately. In most broker CRMs the largest single pool of value is enquiries marked "not proceeding" that were contacted once or twice and never again.

• Re-work the no-answer pool - a genuine multi-touch sequence over weeks, not two calls in a day.
• Separate "not now" from "not ever" - a buyer nine months from purchase is a good lead you contacted too early.
• Re-run declined serviceability after a rate move, a pay rise, or a policy change at a lender.

That work costs nothing per enquiry and improves the quality metric on every source you already pay for.

Frequently asked questions

What conversion rate should a mortgage broker expect from purchased leads?

It varies enormously by source, exclusivity and how fast you respond, so an external benchmark is close to useless. Measure your own rate at each funnel stage by source, and compare sources against each other rather than against an industry figure.

Is it better to buy fewer, better leads?

For a capacity-constrained broker, generally yes - your time is the scarce input and a poor enquiry consumes as much of it as a good one. For a team with idle capacity and a stable conversion rate, additional volume can be the cheaper path.

How long should I test a new lead source?

At least one full sales cycle, which for home loans usually means a quarter. Judging a source on its first month measures your speed of response, not the source.

Why did a lead source that worked stop working?

Usually one of three things: the vendor increased how many brokers each enquiry is sold to, you scaled spend past the motivated audience, or your own response time slipped. Check all three before blaming the source.

Related reading

• Why Shared Leads Stopped Converting
• Cost Per Funded Deal: The Metro Broker Maths
• Speed to Lead: Why the First Five Minutes Decide the Deal

Sources

• Moneysmart - working with a mortgage broker — ASIC
• Quarterly mortgage broker market share reporting — MFAA