Ideal Final Expense Candidate

[dalleyne]

Hello Guys,

I am an independant agent in Metro Atlanta, Georgia. I have hired some Telemarketers.
I am buying a scrubbed list of names and need to know what criteria should I search with in. I need to know what age, sex, income, etc, should I target. I have a friend who suggested that I target ages 45 and up. What do you guys think?
AGE
SEX
INCOME
Rural or City
Any suggestions?

 

[Tomfromtheshade]

I would look for that target market by having your telemarketers call for medicare supps and then go in through the back door with the FE.

 

[Amber Scherloz]

I agree with that target. Well, it is only difficult at first but if you get use to it then everything will just run smoothly. Good luck.

 

[Frank Stastny]

I think I have posted this before. It is from the MSMS that agents get who I have trained to sell Med Supps.

[FONT=&quot]Although I have never tried to specifically market final expense insurance I have talked to hundreds of agents who have. Based on what they have told me it seems that it would be much more enjoyable for me to go to the junkyard barefooted and kick broken bottles and bricks.

It appears to be way too much work, too frustrating, expensive and time consuming. I have sold a ton of final expense in the last sixteen years and each sale was an easy and rewarding experience. Why? Because I had already developed a relationship with that person and they knew and trusted me.

Every final expense sale I have ever made was the direct result of a Med Supp appointment. Med Supp appointments are so much easier to get and Med Supps are so much easier to sell without the need to spend thousands of dollars buying what I consider mostly worthless "leads". In my experience direct mail is the absolute worst when working the senior market.

Most of the time after making a Med Supp sale I am able to show my new client that not only can they have a policy that will cover their funeral expenses but it will not cost them any additional money over and above what they were already spending.

Over 99% of the time, when I sell a Med Supp policy, I am able to save my new client money. Many times I have saved them a substantial amount of money. (It doesn't occur often but I have saved a prospect over $100 per month on their Med Supp policy.)

After completing the Med Supp application and pointing out the savings it is a very smooth transition to simply make the suggestion that, with the money they saved, it may be a wise decision on their part to invest that savings in a final expense policy.

Since the prospect is not going to have to increase the amount of money already coming out of their checking account, most often they also think that it is a good idea.

Does it get any easier that that?[/FONT]

 

[SRQ Willie]

NO , it does not get any easier !! Well said Frank.

 

[atlantainsguy]

Yes, you are rolling a much smaller rock uphill by cross-selling the FE through an initial Med Supp sale.

Before dealing with the original poster's question which hasn't been answered, let's consider the statement "...direct mail is the absolute worst when working the senior market.".

Mail 1,000 FE leads at $400/K; get a 1% return for 10 leads; and write half. Average AP is $600 per app, so you just made $3,000 at a 100% contract. Your net is $2,600 after subtracting the $400 lead cost (15.4% of net AP). That's a decent ROI.

Phone-only prospecting limits your universe because of Do-Not-Call to 10% - 20% of senior households max. Direct mail reaches them all, unless they are on the DMA nixie file.

To me it makes sense to do both -- phone where you can, and mail part of the rest through intelligent targeting.

You will, however, get 2 to 3 times the return on a Medicare mailing as an FE mailing. I don't know the specific ratio on phoning, but logic says it's probably similar.

The FE cross-sell off Medicare concept makes good sense either way -- phone or mail. Both have a valid place in your marketing mix. I would only dismiss the benefits of direct mail as "worthless" if I was a big fan of generalizations.

To answer your original post:

Age -- solid returns start at age 48. 48 to 60 does about 25% better than 60 - 80, which most agents target. Responses spike again from 80 - 85, but of course you now have many more health issues, plus a huge premium to overcome.

Gender -- target the "woman of the house" where there's a choice. Otherwise, include both female and male heads-of-household. Females as a group are more responsive and more security-conscious.

Income -- most agents cap at $50K. You should seriously consider not including the $0 - $15K group (or even $0 - $20K), because many are on Medicaid and without checking or savings accounts. Monthly direct bill will kill your persistency, and most of these folks can't afford quarterly.

Income is always "estimated" based on sophisticated computer models, but the models frequently go in the tank with senior households. To be sure you are getting lower-income households, you might consider using a "net worth" file as supression to the base file. That will knock-out the affluent households that have "leaked-into" the base estimated household income file.

Geo -- Rural normally does better than urban, unless you really know the area well. In Fulton Co. where you live, there are only a half-dozen 5-digit zips that really pull well.

The typical FE buyer in the Southeast is age 65-75, female, and minority. That's not a value judgement -- just the way it is.

atlantainsguy

 

[dalleyne@]

Thanks Guys. This was my first Thread of 20. Atlantainsguy, Could you do me a favor and reach out to me directly. I guess you can send me a PM, I will reply with my contact info. I would like to speak with you for a few minutes.

Frank, thanks a lot. I read your approach to cold calling on another thread that was very interesting.

Also, I was thinking about cold calling new homeowners for Mortgage Protection. Any ideas on an opening statement?

I was thinking something like," Hi (Name), my names is (Salesman) and the reason for my call is I was recently assigned to your area and noticed you just purchased your home and wanted to educate you on protecting your home in the event of death or disability.

 

[Frank Stastny]

I would only dismiss the benefits of direct mail as "worthless" if I was a big fan of generalizations.

Actually it is not a generalization, it is a statement based on having run thousands of direct mail leads in the past.

If I have a 1,000 piece mail drop done it will cost me between $350 and $400 today. Your estimate of 1% return is pretty accurate. A 1.5% return is considered very good. If I paid $400, then each return card will have cost me almost $27. I think that is pretty high.

However, with Med Supps I have not experienced writing apps on 50% of them. It is way, way lower than that. If you are doing that on a regular basis then you need to begin offering training to sell FE and charging for it. You are obviously much more skilled than the average agent I have talked to at what you do.

In the last sixteen years I have tried to sell Med Supps every way one can possibly think of. Hands down, the easiest, most productive, cost effective way for me to sell Med Supps is for me to call from a list and do it myself. Much more productive than paying for Direct Mail "Leads".

I have found that for the most part they are nothing more than a name, address and phone number of someone who may have been curious at the time the filled out the card but have no recollection of having done so when I contact them. At least if they do remember most will not admit to it when I call.

It sounds like you are experiencing a much higher degree of success with FE mailers than I have with Med Supp mailers. I think we all would appreciate knowing what you do to close 50% of them.

It would be interesting to hear from other agents who are working direct mail leads for FE and the experience they have had.

 

[atlantainsguy]

Didn't mean to get you defensive, Frank, and I apologize if that was the result of my post. You are incredibly experienced, and willing to share your knowledge with one and all -- much to your credit and the benefit of everyone on this Forum. We just disagreed where direct mail is concerned.

I think there's a place for both mail and phone in the prospecting mix, and internet too for that matter. I'm reluctant to discredit the benefits of any of them until proven otherwise. If skywriting for prospects worked, I'd say do some of that too. I'm not a proponent of putting all the eggs in a single basket. I don't like omelets that much.

Your basic point is absolutely correct -- do the Medicare first, and then cross-sell the Burial insurance. I've been an advocate of that strategy for years, as you obviously have been too. That's the most important message for folks to pick-up from all this.

I just felt the out-of-hand dismissal of direct mail was too generalized. It can work quite well if done properly. But, it may not work as well as something else -- and that's probably closer to what you meant.

You're right that 1.5% is not an uncommon return, but I was trying to be conservative with the numbers.

A 50% conversion rate is also conservative for an experienced "Burial Lead Runner". Most of the Lead Runners I know actually close about 80% of their direct mail leads. Again, I was trying to undervalue the results. They NEVER use the phone to set appointments, and that's part of the difference. That, plus the fact that they've done this for many years.

It seems one of the primary issues here is using the telephone, as opposed to to seeing people face-to-face. But, that's an assumption on my part, because I don't understant your full system -- other than it works extremely well for you.

As you should be, you're a proponent of what works best for you. Unfortunately, not everyone is comfortable or good on the phone. For them, direct mail may well be an extremely viable alternative.

atlantainsguy

 

[Frank Stastny]

Didn't mean to get you defensive, Frank, and I apologize if that was the result of my post. You are incredibly experienced, and willing to share your knowledge with one and all -- much to your credit and the benefit of everyone on this Forum. We just disagreed where direct mail is concerned.

I think there's a place for both mail and phone in the prospecting mix, and internet too for that matter. I'm reluctant to discredit the benefits of any of them until proven otherwise. If skywriting for prospects worked, I'd say do some of that too. I'm not a proponent of putting all the eggs in a single basket. I don't like omelets that much.

Your basic point is absolutely correct -- do the Medicare first, and then cross-sell the Burial insurance. I've been an advocate of that strategy for years, as you obviously have been too. That's the most important message for folks to pick-up from all this.

I just felt the out-of-hand dismissal of direct mail was too generalized. It can work quite well if done properly. But, it may not work as well as something else -- and that's probably closer to what you meant.

You're right that 1.5% is not an uncommon return, but I was trying to be conservative with the numbers.

A 50% conversion rate is also conservative for an experienced "Burial Lead Runner". Most of the Lead Runners I know actually close about 80% of their direct mail leads. Again, I was trying to undervalue the results. They NEVER use the phone to set appointments, and that's part of the difference. That, plus the fact that they've done this for many years.

It seems one of the primary issues here is using the telephone, as opposed to to seeing people face-to-face. But, that's an assumption on my part, because I don't understant your full system -- other than it works extremely well for you.

As you should be, you're a proponent of what works best for you. Unfortunately, not everyone is comfortable or good on the phone. For them, direct mail may well be an extremely viable alternative.

atlantainsguy

I'm sorry. That is why this is a less than desirable way of communicating.

I didn't mean to come across as defensive. I apologize if that is how it sounded. I was very sincere about having talked to other agents who tell me that they are not having that kind of success and equally sincere when I suggested that you may want to offer training.

Agents do not "give good phone" because they don't know how to do it correctly and smoothly. That is what makes them believe that they hate it.

It isn't something that I get excited about doing when I get up in the morning but the way I do it, it isn't something that I hate doing either. It is just a part of "my job" as an insurance agent who works the senior market and wants to keep as much commission income for myself as I can.

When you get a direct mail lead do you first call them or go to their house and knock on the door? If you are calling first, since you have never spoken to that person before, I would still call that a "cold call". Many disagree with that premise and I understand why.

I call first and then go see them. However, sometimes I sell it over the phone and sometimes not. For an agent who wants to cross sell FE going on the appointment is almost necessary.

I still think Med Supp direct mail leads suck and are a poor investment of an agents marketing dollars.