Considering a Move to EFES

[jdeasy]

Say he did get to $16/per at EFES with 15 leads a week. That would be a lead cost of $240. Say he was at a 90% contract, and doing the $3,500/week. He would be making $3,150/week with EFES.

Now lets say he just did it independently with an average of a 110% contract (conservativly) between all carriers. Say he got an average of 1.25% return (conservativly) on his mailers at $425/1,000. At that return he would need to mail 1,200 to get 15 lead cards. That would be a weekly cost of $510 to get the 15 leads.

EFES at 90%= $3,150/week minus $240 (lead cost)= 2,910/week
Independent at 110% conservatively= 3,850/week minus $510 (lead cost)=$3,340/week

That's a $430/week difference, not huge but adds up throughout a year (50 weeks, take 2 off vacation) $430x50= $21,500/year difference. I'm sure I'm not exactly right with EFES's commission % as I've never worked with them, but I bet I'm close.

If he is doing $175,000 per year in ap then he would be at $186 PPL which would be $15 leads. He would also be at 95% or 100% commissions on the lead program.

So let's just say 95% since we are bing conservative. That's $3325 -$225 lead costs or $3100/wk.

Even at a 1% return on mailers, {which ain't happening}, he would have to mail out 1500 pieces per week to get 15 leads. That's a weekly lead cost of $638, if he's lucky. Even then the leads are not going to come in all in the same area on the same day. But that's another discussion. At 110% contract he would make $3850 for the week -$638 in leads for $3212/wk.

Now he's done all the work of his own mail and hopes to get 1% return for $112 more per week. What if the return is .7% or .5%?

There goes that extra money and more with it.

Now if he is in an area where 1.5% returns are possible then he shouldn't even look at someone's lead program.

But there was recently a guy on here talking about all his experience and getting 2% returns and how foolish it was for anyone to n ot do their own mail.

That same guy is now with a lead IMO.

There is not one answer for everyone.

 

[WinoBlues]

First year aside. Are renewals the same?

 

[jdeasy]

First year aside. Are renewals the same?

No. And that's the big deal. most agents don't seem to care about renewals but my renewals at fexcontracting are going to be about double what I get at EFES.

 

[Indy007]

If he is doing $175,000 per year in ap then he would be at $186 PPL which would be $15 leads. He would also be at 95% or 100% commissions on the lead program.

So let's just say 95% since we are bing conservative. That's $3325 -$225 lead costs or $3100/wk.

Even at a 1% return on mailers, {which ain't happening}, he would have to mail out 1500 pieces per week to get 15 leads. That's a weekly lead cost of $638, if he's lucky. Even then the leads are not going to come in all in the same area on the same day. But that's another discussion. At 110% contract he would make $3850 for the week -$638 in leads for $3212/wk.

Now he's done all the work of his own mail and hopes to get 1% return for $112 more per week. What if the return is .7% or .5%?

There goes that extra money and more with it.

Now if he is in an area where 1.5% returns are possible then he shouldn't even look at someone's lead program.

But there was recently a guy on here talking about all his experience and getting 2% returns and how foolish it was for anyone to n ot do their own mail.

That same guy is now with a lead IMO.

There is not one answer for everyone.

Agree there isn't one answer for everyone. IMO EFES sounds like a good deal for the developing rookie agent to learn. Once you know what you're doing, I struggle to see the point to give up any commission for leads I can get myself.

I do know in my area, I consistently get 1.5%+ return on DM. Every once in awhile I'll get slightly less, but its rare. I drop 1,000/week, and have for 6 years. It's not a lot of work to drop your own mail. In your example you're still using the 110% average commission for the high producing agent. We both know its going to be higher than that. You also stated 95-100% commission w/EFES, which is likely true for you (directly under a RD), what about the agents who have more layers in between (agents getting over rides)?

No matter which way the numbers play out, EFES IS making money off of your production, which comes from the over ride they earn. They wouldn't be in business if they weren't. If you don't need the training though, why would an experienced agent stay?

 

[WinoBlues]

No. And that's the big deal. most agents don't seem to care about renewals but my renewals at fexcontracting are going to be about double what I get at EFES.

Double over the life of a policy Xs the number of policies you write is big money.

Are they still your clients to contact and service? To seasoned agents like us existing clients are a form of renewals through rewrites and referrals.

 

[agentjhc]

Indy do you actually do your on DM or a mail house?

 

[jdeasy]

I have stayed with EFES because of the leads. No other reason really. Of course they are making money on my production. I have no problem with that. They couldn't stay in business if they were not.

My business would certainly have suffered without them. So it's a win/win.

I know the numbers here too. I would have to mail 2250 pieces per week to get 15 leads every week. That's about $47,000 in lead costs. I spent less than $10,000 per year over the last 5 years with EFES. So yeah I give up 10 to 15 points in commissions to save $37,000 per year.

Plus I get the leads all in the same county on the same day each week.

EFES is still able to make money on me because they don't have to spend $425/1000. And their commission levels are at a point that I could get anywhere as a sole proprietor.

They claim that they do not make maoney on my business but I fail to see how that could be.

I have never been one to care what someone else made on my business as long as it wasn't at my expense. I made more money by being with EFES that I could have without being with EFES.

The fact that they made money too is due to their being able to send out mail cheaper than I could and able to get higher contracts than I could.

Agree there isn't one answer for everyone. IMO EFES sounds like a good deal for the developing rookie agent to learn. Once you know what you're doing, I struggle to see the point to give up any commission for leads I can get myself.

I do know in my area, I consistently get 1.5%+ return on DM. Every once in awhile I'll get slightly less, but its rare. I drop 1,000/week, and have for 6 years. It's not a lot of work to drop your own mail. In your example you're still using the 110% average commission for the high producing agent. We both know its going to be higher than that. You also stated 95-100% commission w/EFES, which is likely true for you (directly under a RD), what about the agents who have more layers in between (agents getting over rides)?

No matter which way the numbers play out, EFES IS making money off of your production, which comes from the over ride they earn. They wouldn't be in business if they weren't. If you don't need the training though, why would an experienced agent stay?

 

[TDFnCali]

No. And that's the big deal. most agents don't seem to care about renewals but my renewals at fexcontracting are going to be about double what I get at EFES.

Im getting between 110-120% on all my contracts now....but my renewals are between 6-9%.


Sounds like Im not getting a good deal!!

 

[Indy007]

JHC, I use multiple mail houses. Doing it totally myself would take too much time and effort. I got ripped by a local printer my first drop with the free mailers from MoO. Dropped 2,000 twice, and got one reply. I'm positive he "dropped" them, directly in the trash. I have found a couple of reliable shops since.

JD, I see your point since your area has fairly low return rates. That'd be a tough pill to swallow. Med sup has always gotten me a better return than FE. Have you ever thought of mailing them, and cross selling FE? I know you're mainly a FE agent, but it might work. BUT, then there's the old saying, "if it ain't broke, don't try to fix it".

 

[jdeasy]

Never done mail for med sups. I understand that returns much better here too.

If I were not having the success I am with being an FE agent then I would sell med sups and cross sell FE.

But I am an FE agent. I'm not a med sup agent, an MAPD agent or an annuity agent. I only prospect for FE. I only work to learn everything I can about FE. I will sell the occasional term or UL that falls into my lap and the same for med sups.

I do ask every I meet with for FE who they have their med sup with. The vast majority of FE mial responders are not med sup people. They are MA people but I don't touch those at all now.

JHC, I use multiple mail houses. Doing it totally myself would take too much time and effort. I got ripped by a local printer my first drop with the free mailers from MoO. Dropped 2,000 twice, and got one reply. I'm positive he "dropped" them, directly in the trash. I have found a couple of reliable shops since.

JD, I see your point since your area has fairly low return rates. That'd be a tough pill to swallow. Med sup has always gotten me a better return than FE. Have you ever thought of mailing them, and cross selling FE? I know you're mainly a FE agent, but it might work. BUT, then there's the old saying, "if it ain't broke, don't try to fix it".