- 11,995
What would a lead for someone with a non-competitive carrier interested in a quote be worth? An actually lead, not just a list.
Idunno. When you say lead, you mean that they are legitimately looking to shop around?
Probably as much as any other qualified lead I guess, since competitors will still win out. It's not 100% against any carrier- if so then I don't think they'd be in business anymore. I still lose to Allstate who didn't charge for a claim as much as others with accident foregiveness, and things like that.
The lead would still be the same but I think more people would be willing to purchase based on knowing the carrier, does that make sense?
- 11,995
It makes sense, but in my albeit limited experience, selling agents leads is almost always a suckers bet. To compare it to selling supplies to gold miners, it's like insurance agents only want the equipment guaranteed to find gold.
If I have a telemarketer (stateside or overseas) call to generate leads I need to pay them on an hourly basis and I have fixed costs whether they generate leads or not. A few years ago I called a local P&C shop (indy) and asked how much they would be willing to pay for telemarketed leads. He said he's only pay $10 and only if it was for both auto and homeowners because, and I quote, "you need me more than I need you". I've had similar conversations with P&C agents from time to time and I just can't wrap my head around it. I like having my telemarketers call on commodity products and they do a pretty good job of it, but when agents only want to pay $10-$15/lead with unlimited free returns forever, it's not viable. In the Medicare supplement world I'm going to try to get back in the business of doing lead generation, but it's on an hourly basis with no guaranteed results. Agents hate to hear that, but it's no different than doing a direct mail campaign and the cost is less.
I believe that if I could find a good indy agent that has good carriers and can either sell over the phone or lives in a large enough area where they could handle a considerable volume (like 50 leads/week) I think that agent or agency could make some serious coin building up their book of business. Maybe that's why I was only in the P&C world for a year.
If I have a telemarketer (stateside or overseas) call to generate leads I need to pay them on an hourly basis and I have fixed costs whether they generate leads or not. A few years ago I called a local P&C shop (indy) and asked how much they would be willing to pay for telemarketed leads. He said he's only pay $10 and only if it was for both auto and homeowners because, and I quote, "you need me more than I need you". I've had similar conversations with P&C agents from time to time and I just can't wrap my head around it. I like having my telemarketers call on commodity products and they do a pretty good job of it, but when agents only want to pay $10-$15/lead with unlimited free returns forever, it's not viable. In the Medicare supplement world I'm going to try to get back in the business of doing lead generation, but it's on an hourly basis with no guaranteed results. Agents hate to hear that, but it's no different than doing a direct mail campaign and the cost is less.
I believe that if I could find a good indy agent that has good carriers and can either sell over the phone or lives in a large enough area where they could handle a considerable volume (like 50 leads/week) I think that agent or agency could make some serious coin building up their book of business. Maybe that's why I was only in the P&C world for a year.
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
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
I concur. P&C doesn't make a lot of money up front, that is why the agents count on renewals a lot more than life.
I'd do 50-100 leads a week. I do that now through leads generated through another business but the closing ratio is a little low. We might do about 20-25k/month in written premium with about 100 leads/month between another agent and me from a mortgage company.
If you could get the carrier that people use I think that is excellent. It has a lot more uses than usual- for example I don't have to always sell them NOW. If they have Nationwide and decline, I'll wait until NW files for a rate increase and target all of those declines again. There are multiple uses for a lead like that.
Unfortunately, in NC, the homeowners policies are just SUPER inexpensive. I will write HO policies on 250k+ houses and the premiums are only like 300-400/year for some of them if the credit and loss history are nice. That is too inexpensive to really be worth it (and the ins. companies agree hence an across-the-board increase for most, if not all companies.)
I think that in places that do high HO and auto premiums that would be good. I'm thinking like NY, NJ, MD, TX, places like that. I see a LOT of expensive TX HO in the range of like 1200-1800/year.
I think that you would just be best cross-selling those leads to people along with life leads. I'd buy those P&C leads for an extra 50 bucks if I was getting life leads as well, ya know?
- 11,995
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.
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.
I'm one state over from you and handle nothing but phone leads now. If you are interested in a guinea pig agency let me know. My agency does leads in NC, SC, VA, TN, GA, and MD, but mainly NC, SC, and VA.
Let me know if you're interested, but it won't hurt my feelings if you don't want to do anything. I think it would be interesting and I'd love to do a little beta testing for something every once and a while :-p
G
Guest
Guest
Josh, if you can get the info we want, Count me in also
- 11,995
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.
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.
I'lll PM you a number.
It would be great to get the carrier as part of that, and if they have bundled insurance (if not, who is home and auto through?)
That will make your leads a lot more viable.
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