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The In's and Out's of Insurance Leads

Posted by Will Erdmann on Jul 20, 2018 9:46:21 AM

Every insurance professional comes to the conclusion at some point, usually when you're doing working through your existing network, that your marketing could and should include some form of insurane lead services.  Insurance leads have been around for a while now, however the method in which they are acquired has developed dramatically since the advent of mailers.

There are plenty of pros and cons that come with paid insurance leads, but they definitely have their place and we recommend all agents consider them in their marketing strategy.  Finding a good lead source does require some time and effort. The payoff can equate to a reliable source of new leads and profit center for your business.

While paid leads do cost money, they can actually save you money (and time) in the long run if worked properly.  It takes a concerted effort and rigid tracking to determine the best ratio paid leads to pure lead generation but finding the best use of your time and resources is critical to building your business.

 

Things To Keep In Mind Going Into Paid Leads

  • Many agents will speak poorly of all paid insurance lead options. You might hear good things about a service from one agent and horrible things about the same service from another agent. There are several factors at play here and it is important to understand all of them.  
  • Not all lead services are going to be a fit for each insurance line and/or geographical region.  Sometimes campaigns run better in certain reasons, sometimes there are an abnormally higher number of claims in another.... a lot of factors come into play when considering sources.
  • Most agents aren’t going to disclose a good lead source. A good source is very valuable and many agents will protect their sources to the point that they tell others that the service is very bad.  You would be surprised at the number of times I hear, "We love you guys, but we don't want to tell anybody near us for fear that they'll take our calls!"
  • There are many questionable insurance lead services and it is important that an agent do as much due diligence and testing with a lead service as possible.  Over my 6 years of experience in the insurance lead world, I can count on more than two hands the number of companies I have seen come and go, change names,  be bought out, or worse... 
  • Many agents do not work paid leads in a profitable manner and in turn have a poor opinion of them. 

 

Insurance Lead Buying Guide

Ok, so you've accepted the fact that you need some sort of lead generation in your agency but need to know where to start..  Look no further!  When getting started with buying internet insurance leads many agents will tend to put too much emphasis on lead price.

Lead price is completely relative to an array of other variables which makes a price point decision flawed. There are many other variables in the lead buying equation that can determine if a $50 exclusive lead or call is cheap or a $2 aged lead with another company is expensive.

A primary piece of the equation is lead quality. Unlike the price of a lead, quality isn’t a known at the beginning of the process. An agent will typically have to do some lead testing to get a good feel of the quality a lead company has to offer.

When looking for a new vendor, here are the criteria you want to be looking for:

Lead Generation

How does the lead company generate their leads?  It’s perfectly reasonable to ask this question, and probably the question I hear least!

Most companies will tell you they generate leads through paid search, organic traffic, or even internal traffic through their own websites. 

Lead Information

The data that a service provides with a lead is critical information. You want as much relevant information as possible which is collected at the point of quote generation.  If you are using a call source, recognize that the more questions a system asks the consumer, the more frustrated a consumer is going to get before speaking directly to you which would result in a lower close rate.  

Look for lead or call companies that can provide enough information to get the conversation started, but understand that sometimes less is more as it gets the consumer in front of you and talking!

Credit Policy

Lead and call companies are constantly looking to apply new technologies to scrub leads against bad data prior to lead delivery.  This is a difficult task considering most leads are delivered in near real-time. The bottom line is that you will get bogus and fake leads with every insurance lead company.  If you ever speak to a vendor who says they never hear of bad calls or leads, a HUGE red flag should go up in your head.

The thing that matters the most in regards to bad calls or leads is the credit policy of the vendor. You want to look for a company that is very flexible with crediting bad calls/leads and makes the process as easy for you as possible.

Although not all the good services offer online crediting, we do offer it for our clients. Time is money and if you have to spend a lot of time fighting to get bad call credits then you have to ask yourself if the business relationship is worthwhile.

Lead Volume

The amount of leads a lead vendor can provide is another aspect to consider when selecting a lead source.  Some companies have better coverage both by line of insurance and geographic areas which can play into the amount of leads that will be sent to you.

It is nice to have a consistent and dependable flow of leads but this factor is not one that we would consider a deal breaker. If a lead company can provide high quality leads you’ll probably want to stick with them even if they only send you a few leads per month.

Shared or Exclusive

Shared leads play a HUGE part in your success.  Some companies will disclose their average ratio on their website, and some won't. The average agents per lead and maximum agents per lead are the important pieces of information. Typically, you want an average under 4-5 agents (or less) per lead sold with no more than 8 agents max per lead.

Exclusive leads are a much better option if you want to eliminate unnecessary competition, but recognize that you will pay a bit more for the benefit of not competing against the agent down the street.

Filter Options

Lead filtering is where an agent can take some control in the quality of lead they purchase with aggressive audience targeting.  Most of the top lead companies will offer pre-set filters and/or custom filter options. Most of the custom filters will increase the price per lead but many agents find the extra expense to be money well spent, however they don't realize that you actually hurt yourself when you request custom filters as you not only dramatically reduce the number of people to speak to by narrowing your search too much. 

Of course every agent wants to write a consumer with multiple cars who is a homeowner with good credit and has life insurance needs but realize that number is much smaller than the general public and you would be doing yourself a dis-service.

Lead Delivery

When and how a lead is delivered plays a vital role in the insurance sales process. When working internet insurance leads the rate of success is much higher when you are working with an inbound vendor.  

You'll want to make sure you have a good cap of total calls you want to handle in a day, spaced out (or throttled) so that your producers or LSP's do not get overwhelmed, and set up a schedule for when your team is available to take calls, or leads.

Marketing & Training Content

Some lead companies offer marketing content and training programs to their customers. (Similar to what you'r reading right now)  This material can be especially useful for a new agent that is learning the ropes. Personally, we use it as extra effort to take care our clients, and share useful information to potential clients on best practices.  After all, an agents success IS our success.  We love hearing success stories, and we thrive on bringing that success to as many agents as possible.

Lead Price

Last but not least, we talk about the topic that agents typically want to talk about first.  Price.

With everything else considered, price should be considered in the context of close rate and cost per acquisition.  If you have a life or health lead priced at $50 for an exclusive call, and it takes you two calls to close a policy, then your CPA is $100.  Inversely, if you would rather take a shared life or health lead priced at $15 per lead, but it takes you 10 leads to close a policy, then your CPA is $150 which ultimately costs you more! 

This is why you should ONLY look at lead price in the context of CPA, and the best way to do that is to start at a comfortable level, and test your results until you're ready to dive in deeper.

 

Internet Lead Buying Expectations

Having the right expectations when buying internet insurance calls or leads is a vital part of a successful campaign.

You will hear agents complain about lead services and say things like, “half the leads I paid for were junk”. The thing is, they are probably right, yet that does not matter. If there were companies that offered only perfect leads that are guaranteed to close then insurance agents would be lined up around the internet block waiting to pay ten times the going rate. 

The reality is that most leads cost a around $10-20, and most inbound calls cost $35-55. Although many services tout how well they scrub their leads, there will still be some junk that makes it through in order to deliver in real time.  Additionally, recognize that for an inbound vendor to be in compliance for TCPA, there is only so much a vendor can do legally to generate genuine inbound traffic which means often times you will be speaking to more of the general public which is hard to filter fully based on their responses.

Most successful agents only covert around 8% to 12% of their internet leads to the book, and for inbound calls they are looking at closer to 25-35%. Close rate varies on the line being sold, the carrier who is closing them, and the location the consumer lives. 

When it is all said and done the only thing that matters is ROI (Return on Investment). Inbound calls and leads are all about numbers.  If you have a positive ROI with a lead source and there isn’t a better use of your sales time then you should continue with that source.

The key to this game is to test, track and repeat.  Insurance calls and leads aren’t golden sales tickets, and they might not always close on the first call!  They have to be worked thoroughly and consistently or they will not be profitable.

Each lead company has it’s own strengths and in fact, we encourage agents buying calls from us to test as many companies as possible in comparison to see which ones perform the best for their location and line of business.

You’ll probably find 2 or 3 companies that are profitable and may want to consider using all of them on a regular basis.

 

How To Get Started Working Insurance Leads

There are a few things to remember when getting started:: 

Be Persistent

As previously mentioned one contact is not going to net profitable results with internet leads. If you aren’t able to make contact or were not able to close the deal on first contact, by all means do not stop. Follow up at every reasonable opportunity and DO NOT throw the lead away!  I've seen many times where a call was submitted for credit when suddenly two days later out of the blue the consumer calls back in and wants to close immediately.  It happens more than you think!

Know Your Product & Offer Solutions

Making contact with a prospect is only part of the battle. There is a good chance there are several other agents calling as well so you need to have a unique angle and offer quality solutions.  Cross sell complimentary lines when the situation lends its self as often as possible for added value. 

This means knowing your product extensively. Instead of simply running up an auto generated quote listen to your prospect and offer a sound solution tailored to their unique needs.

Take Notes

I don't know about you, but I am taking notes CONSTANTLY.  Record as much information as possible when speaking with your prospect. Take note of every detail you can down as you talk or immediately following your conversation. Ask questions to determine the prospect’s current needs and if they are currently insured try to determine what company they are with. Also try to determine how often they pay for insurance and when they renew.

This information allows you to follow up at peak times such as immediately following a price increase or just before a renewal period.

No information is too trivial to record including personal info such as pets, kids, or anything else that is mentioned in conversation. All of this information helps establish ongoing rapport and allows you to follow up and engage quickly into meaningful conversation with the prospect  ultimately helps close more business.

If you are looking for a new vendor and are interested in setting up a complimentary consultation with one of our inbound marketing experts, click here to submit a request for someone on our team to reach out!

 

Tell us what you think?  Do you have any advice for new or blossoming agents?  We want to hear from you!

 

Topics: tips, insurance marketing systems, insurance consultant, insurance leads, marketing, ROI, Increase close rate, Insider, follow up, insurance marketing, insurance agent, insurance broker, insurance specialist, insurance marketing group, insurance marketing agencies, marketing ideas for insurance brokers, quality insurance leads

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