Lead generation failing due to data tricks

Largely due to the competitive nature of online financial advertising, an increasing number of lead generation firms are using ‘sludge design’ – that is, any tactics that make it harder for the consumer to do what is in their best interest – to trick people into parting with their data.

Lured onto a marketing landing page by the promise of a free mortgage calculator or an instant life insurance quote, consumers input their details only to find it has been captured and sold as a sales lead.

Many consumers then find they are inundated with calls and emails about financial products when all they wanted was a quick illustrative quote or calculation.

Not only is it frustrating for consumers, but it is a breach of the FCA’s consumer duty, a focus of which is the customer sales journey.

Consumer research bears witness to this problem; according to Data Control Matters, a survey of 5,000 consumers, 29 per cent admitted having had a negative experience when getting a quote for a financial product online. 

Of those, 24 per cent said that when they had first tried to get an online quote, it had not been clear that they would have to submit their details, a further 24 per cent said they had wanted an online quote but were called instead, while 30 per cent said they received too much contact too quickly after inputting their details. 

As a result, almost a third (31 per cent) said they are less willing to share their data online than they were five years ago, while almost half said they would either have reservations about sharing their phone number (37 per cent) or would never share it (8 per cent) to get an online quote. 

The problem is getting worse

Consumers are increasingly starting to input fake data in online forms to protect themselves in case the ‘instant quote’ they have been promised is in fact a ploy to capture their data and sell it on. Consumer mistrust online is making lead generation more expensive and less effective.

For more than 20 years financial services firms have bought leads in good faith that the consumer has a genuine interest in their product or service, but increasingly lead generation is failing.

There is a perfect storm coming.

Not only does sludge design annoy the consumer, but it is not good for the lead buyer either as the lead they have paid for is essentially a dead end.

We work with firms to certify and validate the leads that are coming through by analysing the authenticity of the customers’ journey and the details they have provided.

In 2022, the average proportion of leads that were rejected by our platform after being identified as containing fake data was 5 per cent. So far in 2023, this has almost doubled to 9.7 per cent.

The spike suggests that consumers are becoming increasingly savvy in the way they respond to internet forms that promise them a quote and will input fake data if they think they are about to be collected as a lead for a call back.

A savvier and smarter consumer is going to recognise advertising ‘tricks’ and both the lead generation firm and their clients will suffer.

And why wouldn’t they? Not only is it frustrating for them, but it is a breach of the FCA’s consumer duty, a focus of which is the customer sales journey, specifically on misleading advertising that pulls a customer into a journey they did not want or expect. 

Under the consumer duty proposals, all regulated firms will need to be able to evidence that they have oversight of the whole customer journey, and that they have challenged sludge design.

This, as mentioned earlier, includes things like online quotes and calculators that do not deliver an online quote but instead capture the consumers’ details, which are then passed on.

A change is coming

There is a perfect storm coming: consumers becoming more and more suspicious of the validity of the quotes they are being promised online and the FCA clamping down on misleading advertising means the invalid rate for lead generation is only going to get worse.

Add to that the rising costs of internet advertising and firms that rely on leads will suffer. 

There is a better way. By offering the consumer the chance to book an appointment, create an indicative quote based on the lead detail a website is collecting or even offering the chance to buy the product online will build consumer trust. 

The answer lies in consumer choice. From now on, a savvier and smarter consumer is going to recognise advertising ‘tricks’ and both the lead generation firm and their clients will suffer.

The time to invest in the brand behind the customer journey is now. Give the consumer the choice to decide how they want to speak, interact and buy from you to beat an increasingly invalid data trap.

Alain Desmier is founder of Contact State