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Very nice contracts. It's our way of providing additional perks. We go the extra mile to earn business.
Do Any Mailhouses Sell The Lead Card Only?
- Thread starter ChicagoProducer
- Start date
- 15,319
Would you offer a higher commission in lieu of subsidized mailers? A cash bonus for $2,500 in production of say $250?
Just playing devils advocate. Yeah, I know it's a stretch!
Rick
- 159
GreenSky said:
Rick, short answer is no. We give top contracts with our lead co-op program on top of it.
It is a company deal., similar to Monumental's..
- 11,996
One thing I don't think you get about agents is that some do need help prioritizing marketing dollars. Folks finance cars because they can't or don't want to wait until they can afford the car they want, they pay for things with credit cards and pay interest because it helps spread out the cost of large purchases (like major car repairs for example) over a longer period of time. Agents work under lead programs because it helps keep them focused on selling instead of trying to manage their finances. Tons of agents have "top contracts" but can't figure out how to keep leads coming in. Although subsidized lead programs aren't for everyone, for many agents it works out very well.
- 16,906
The cheapest way to buy leads (long term) is always going to be with YOU paying for the drops and taking the risk. No company is going to lose money or even break even on your leads.
If you find a place that sells you individual leads, you will have to pay MORE for the individual ones than if you just paid for the drops. The only other way is to give up commission to subsidize it. For instance, if street level commissions on Monumental Life are 115% and you take a 90% in order to get free leads, you are giving up $250 per $1,000 of annual premium that you sell. So if you average $2,000 AP per 10-leads, you have paid $500 for a lead drop that Monumental does for $300. It gets worst if you have to pay for the leads. If you pay $20 per lead the 10- leads would cost you $200 plus the $500 you gave up in reduced commissions for a total of $700 you paid for a $300 lead drop.
I can definitely see where agencies start out trying to be fair and evolve into these 60-70% contract levels because agents are begging to be screwed over. It would be like shooting fish in a barrel to give out low contracts and sell recycled leads to them at $10 a pop.
The smart way to buy leads is (drum-roll please) is buying them yourself at full price.
If you find a place that sells you individual leads, you will have to pay MORE for the individual ones than if you just paid for the drops. The only other way is to give up commission to subsidize it. For instance, if street level commissions on Monumental Life are 115% and you take a 90% in order to get free leads, you are giving up $250 per $1,000 of annual premium that you sell. So if you average $2,000 AP per 10-leads, you have paid $500 for a lead drop that Monumental does for $300. It gets worst if you have to pay for the leads. If you pay $20 per lead the 10- leads would cost you $200 plus the $500 you gave up in reduced commissions for a total of $700 you paid for a $300 lead drop.
I can definitely see where agencies start out trying to be fair and evolve into these 60-70% contract levels because agents are begging to be screwed over. It would be like shooting fish in a barrel to give out low contracts and sell recycled leads to them at $10 a pop.
The smart way to buy leads is (drum-roll please) is buying them yourself at full price.
- 159
Newby said:
Newby, I tend to agree with your numbers, but we don't reduce commissions to offer our lead program. We contract direct with agents so we can give good contracts AND assist agents with the cost of leads.
- 16,906
But can they sell ANY company that fits the needs of the client with the leads?
I could offer agents FREE lead drops for every $3,000 in production with a certain company BUT the company is uncompetitively priced. It's a bad deal. I choose not to do it. I don't need the charge backs.
I think it's smart for FMO's to offer creative lead programs to agents because that's definitely what agents are looking for. But the point of my post is that it's smarter and cheaper for the agent to pay for his own leads and be completely independent.
I used to think that FMOs that gave agents 60, 70 or 80% commission levels were ripping off agents. I no linger see it that way. Agents will line up to sign up for that...IF they THINK they get free leads or low cost leads.
If you are offering 100% or more commission levels and free or low cost leads (especially pay per lead pricing) you are definitely doing a good service to your agents. But if the product they are selling is easily replaced...those agents are going to fail in the long run.
There are no restrictions as to where you place the business you write from the lead..But in order to get another subsidized lead drop (you can pay full price if you like) you have to place another $2500 with them from somewhere.. Commissions, premiums and underwriting are competitive. Only drawback is no Best rating.
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