I wasn’t planning on this being a 2 part post, but I got some great comments and I wanted to republish and respond…
First a great suggestion from Used vans girl:
Have you considered buying lists. There are a numerous companies out there who produce lists for every type of business, consumer lists etc. You have to work out what type of individual or business do I need to target then contact one of these companies to see if they do a list for the area you are looking for. That way yes you have to pay but you are getting targeted people to contact. Hope this helps. Google adwords can be expensive if you don’t convert click through’s to sales.
Great idea… I am unfortunately no more versed in this area than AdWords… But I bet someone with experience could do very well with this strategy.
Next a pair of comments from the brothers Tom and Matt that run a great new Prosper blog — Prosper Lending Review (I hope they keep it up… so far I like what they are doing):
Matt:
My brother and I created a Prosper blog. While the primary purpose is not referrals and most people are already Prosper members we did include some referral links and had one person sign up so far as a referral. I also got one referral who is a family member in addition to my wife who signed up and loaned out $50. I think in general it is difficult to obtain referrals because it is a difficult process. First, they must sign up, get their identity verified, get their bank account verified, transfer money (which could take up to a week), bid on a loan, win the bid for the loan, have the loan complete the verification process so that it is fully funded. All of this has to be completed within 90 days, and I think there is a lot of attrition at each step in the process. Not trying to discourage anyone, but just trying to be realistic about the process.
Tom:
I thought about using Google Adwords. I have some experience and have managed thousands of dollars worth of Google Adword campaigns. Ultimately I decided that it not likely to be worth the money spent. Let’s assume that you spend the very minimum for each click - 5 cents. To break even, 1 out of every five hundred that click on your ad have to sign up and complete the process as Matt described above. I think that you are unlikely to get conversion rates that high. In addition, it’s going to be difficult to keep costs to 5 cents an ad in the competative loan ad market. I know that nonattender is running some googleads though and after the first week he was a referral leader - #2 I think. It would be interesting to see what his results have been and how much he has spent in the process.
I agree that there are holes in Prosper’s funnel, but as a blogger that has been attempting to make money from day 1, in 8 months I did more revenue in one month of the Prosper Referral Program ($125) than from any other single source in a single month. Granted I spent about $100 in an Adwords experiment, but I have over 50 referrals. 5 of which are already lenders.
I think the 90 day window is sufficient to get a referral through the funnel. Do you really think the average time through the funnel is greater than 3 months? I don’t think so… It took me less than 2 weeks to get into my first loan.
I have been tracking my referrals with ProProsper Referral Tracking and I believe I will get a few more through the funnel before I am done.
All that being said, I am admitting that I am an AdWords novice. I think someone who knows what they are doing would do very well targeting lenders. Good borrowers are more expensive to target, but I think there are quite a few cheap sources for lenders referrals.
Also I found this thread on the Prosper forum: http://forums.prosper.com/index.php?showtopic=27860 Any idea what site he runs?
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Categories:
Prosper.com, Referral
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3 comments ↓
Kevin - thanks for the feedback and mentioning our blog. I certainly hope we keep it up too. I noticed there are lots of great Prosper blogs that were active for a month or two and then have been idle for several months. I admire how you have been going strong for over six months. It helps that we have two writers - we keep each other motivated and can pick up the slack when things get busy for one of us.
Thanks for sharing the results of your Adword experiment. Sounds like you got quite a few sign-ups. Were you targeting borrowers or lenders or both? What was the final CPC for your campaigns?
As for the 90 day time window - I do think that it is long enough to get someone through the window that wants to lend. The problem is that there are so many hoops to jump through (which Matt mentioned in his comment - I think you got our comments reversed, btw) that you lose people at each step. I’m willing to bet a very small fraction of your 50 referrals make it all the way to full borrower or lender. Luckily you have already recouped the cost of your Adword experiment investment. This whole referral process is fascinating to me and I’m interested in how it is working out for Prosper overall.
I tried to target both… But I think I had more success with the lenders just because of the cost.
My only point on the 90 days is that you get paid for people who make it through the funnel. I think you are more likely to have people fall out of the funnel than make it through after 90 days.
Good point about the 90 days. I think you are right. If they are going to commit that’s enough time to do it in.
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