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In the previous article we have already talked about basic advantages of PPL affiliate programs. In this review we want to concentrate on pricing questions in such systems. As an example we’ll research T3leads affiliate program, especially, because it’s already familiar to us.
After a certain period of working with us, an affiliate can ask himself a question: “Why for one sold lead I was paid $7, but on another one I earned only $2?” Frequently, the average lead price of a separate affiliate may not coincide with general average price which is indicated in affiliate program. The answer to this question lays on surface. The price for every separate lead depends on many factors, or so-called filters, which are imposed on the application form filled by a visitor.
Leads buyers, on behalf of banks or insurance companies, have the right to sort filled application forms depending on type of data. Banks aspire to receive maximal profit from potential customer and, therefore, they are inclined to pay more for those leads which contain more favorable data.
The data that is indicated by a visitor in application form pass check through the certain set of filters. Separate filters can vary depending on the type of financial product.
At the same time, there is a set of general filters which are involved in checking process of each financial product.
First, it is the state where lives the visitor who has filled application form. All U.S. states can be rotated by a principle of their benefit for affiliate. This rotation is applied to “Home Loans” products:
1. High benefit: Florida (FL), Maryland (MD), California (CA), Arizona (AZ) and Nevada (NV).
2. Average benefit: Colorado (CO), Connecticut (CT), Delaware (DE), Massachusetts (MA), Michigan (MI), Minnesota (MN), Нью-Гэмпшир (NH), New Jersey (NJ), New York (NY), Pennsylvania (PA), Rhode Island (RI), Virginia (VA) and Washington (WA).
3. Low benefit: all other states which have not entered into two previous categories.
This factor affects some other products:
- Low home insurance leads price in Florida (FL) and Louisiana (LA) states;
- Low health insurance leads price in New York (NY) and New Jersey (NJ) states;
- Low car insurance price in Massachusetts (MA);
- No payday loans in Georgia (GA).
Sometimes, at buyer’s will, there is may be added another regional filter – selection will be carried out depending on Zip code.
Besides regional factor, huge value has credit score of visitor who has filled application form. Credit score is a history of duly payments for earlier received credits (municipal services, phone, etc.), and absence of unsecured debt, bankruptcies, etc. In the U.S. credit score of each citizen is counted up by special bureaues (http://www.experian.com, http://www.equifax.com, http://www.transunion.com). Depending on counted points, the credit score can be characterized as "Excellent", "Good", "Satisfactory" and "Bad". The type of credit score of a potential customer indicates his ability to make payments for loans in future. Credit score essentially affects lead prices.
The amount of loan also affects the lead price. This factor can be referred to “Home loans” and “Payday loans” products. The bigger the amount of future loan, which is specified in filled form, the more profit a potential customer may bring to credit company.
Now we’ll briefly research the filters that affect final lead price on separate financial products.
The loan-to-value (LTV) ratio is a mathematical calculation which expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property. For instance, if a borrower wants $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000/$150,000 or 87%. Loan to value is one of the key risk factors that lenders assess when qualifying borrowers for a mortgage. The risk of default is always at the forefront of lending decisions, and the likelihood of a lender absorbing a loss in the foreclosure process increases as the amount of equity decreases. Lenders can require borrowers of high LTV loans to buy mortgage insurance to protect the lender from the buyer default, which increases the costs of the mortgage.
In “Debt Relief” products leads buyers consider the amount of unsecured debt of a potential client. The state does not play any role in this group of products.
In “Payday loans” products, besides the state and credit score, credit companies also check if the person, who has filled application form, is currently a client of any other lender. It is carried out by checking of Social Security Number and bank account number. This data is verified through internal base of credit companies. It is obvious, that this factor can’t be managed by affiliate. On this filter depends, whether the lead will pass checking process.
In the group of insurance products great value has the age of potential customer. For example, the insurance companies pay smaller amounts for car insurance leads that are bought by young drivers. Insurance company will pay less for life or health insurance lead if the buyer of insurance policy is an elderly person.
In many respects, the success cooperation with T3leads affiliate program depends on that, how correctly affiliate manages to operate with all described filters. The earnings in our affiliate program depend not only on the quality of traffic, but also on conformity to recommended norms.