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What would a lead for someone with a non-competitive carrier interested in a quote be worth? An actually lead, not just a list.
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What would a lead for someone with a non-competitive carrier interested in a quote be worth? An actually lead, not just a list.
Josh - I could handle 50 leads a week. Would love to have 50 solid leads a week.... lets do the math.
Auto: Average annual policy is about $750 nowadays. 10% commission means $75, but lets round up and say $100 for each auto policy.
Now, lets say I can sell 1 in 5 of your leads, or 10 a week. Face it, nobody will sell 100% of solid leads and not all leads will be solid. 20% closing ratio seems viable to me for good, qualified leads.
So, 10 sales a week, $100 a sale = $1000 a week in annual commission.
$1000 / 50 leads = $20 a lead, assuming you don't need to recover any other costs involved, which usually is about 50% of the commission recieved for the sale. If I recover that, then I'm at $10 a lead. Split the difference, for solid leads, I'm at $15 a lead.
Now, before you say cross-sell, renewals, life time value of clients, etc, remember, I'm already using numbers that assume they stay on the books for a year (no guarantees) and didn't factor in retention rates. Also, I haven't made a dime yet, nor have I covered any overhead, just the cost of selling that lead, hoping I can cross-sell or get renewals to pay for my services.
This is why its tough to be a P&C agent and hire out telemarketing.
Dan
Dan, I think it was a brilliant decision for Sam to ask you to be a moderator and I'm totally picking up what you're putting down.
I think you're numbers are relatively fair. I really wish you weren't in California. I'd even consider doing it on more of an at cost trial basis.
If I roll forward with offering auto leads it would be auto & homeowners. We'd call on married homeowners and gather basic info (how many drivers, cars, etc) along with a commitment from the prospect (for whatever it's worth) that if we could save them X% of what they're paying for the same coverage they have, they'd be willing to switch. Obviously they can change their mind, but at least at that point they'd realize it was serious, not just saying yes to get someone off the phone.
Interesting discussion.
The way the leads would read is:
Jim and Mary Smith
123 main st
Drives a Ford Fusion and Honda Odyssey
Currently paying $150/month for both cars, would switch if he can save $25/month.
Obviously not everyone would give up all their information, but that's what we'd be shooting for.
@NCPCLHnoob, send me your number again (I think I have it somewhere) and I can give you a call to go over how this would flesh out. I know the margins are going to be tight to have it make sense for everyone involved, but I definitely think it's viable. If companies like Bolder and TRI can sell telemarketed auto leads and make money at it, I can't see why I wouldn't be able to do a better job and make a buck at it.
@RBA, same to you as with NCPCLHnoob, send me a contact number if you want me to give you a call. Idea would be to be selling the telemarketing services/leads, not just a raw list. There is no way I can do that level of information at $49/1,000, but I can probably do a tremendously better job than internet leads.