The short answer
Two numbers decide whether a lead source is worth it: cost per funded deal and time and effort per funded deal. Brokers usually ask only about cost per lead. A lead source can push cost per lead and even cost per funded deal close to zero, as a UCC list can, and still lose. The floor then dials sixteen hours a day to reach anyone, which is a cost even though it never shows up on an invoice. Real-time leads need roughly 20 to 30 leads per one or two funded deals, so far fewer hours sit behind each deal.
The question Alex gets asked most is what the cost per lead is. Cost per lead is the least useful number in the business. He tracks the full funnel from first dial to funded deal and how much each deal funded for, and he reduces it to two numbers that brokers rarely ask about.
The two numbers
- Cost per funded deal: total marketing spend in a month divided by the deals funded. Fund ten deals and you can see what each one cost, and which source most of them came from, so next month’s budget follows it.
- Time and effort per funded deal: the dials, texts, emails, voicemails and follow-ups behind each funded deal, in rep hours. Nobody invoices you for it, so it goes unmeasured.
The second number is the one that catches out cheap data. In Alex’s words, he could bring a shop’s cost per lead and cost per funded deal down to zero, and the shop would be dialling sixteen hours a day calling dead leads. Hours are a cost even when payroll treats them as fixed. A rep spending a day on a list where about 1% connects is not working the lead who asked to be called.
How the two numbers compare by source
| UCC data | Real-time leads | |
|---|---|---|
| Cost per lead | Cents | $30 to $100 |
| Leads per funded deal | A very large list | Roughly 20 to 30 per one or two deals |
| Cost per funded deal | Often high, at best comparable | Usually equal or lower |
| Effort per funded deal | Immense, even at 12 hours a day | Far lower: they are expecting the call |
To measure it, tag every lead with its source, log rep hours by source for a month, and divide by deals funded from each. It does not need to be precise to be decisive. If real-time leads produce one deal per 25 leads and the list produces one per several thousand records, the hours per deal will differ by an order of magnitude whatever the payroll assumption. The cost per funded deal calculator handles the money half, and the comparison of UCC and real-time leads covers what to do with the answer. Which lead a shop should buy depends on whether it has more time or more money: pay with time or pay with money.