Lead Value Question - Personal Lines

[djs]

At the moment it appears the problem is the p&c agents not getting paid enough to buy leads.

Thats a really bad assumption, not even sure how you got there, but it explains your thinking in a lot of ways.

The point is, for P&C leads, I can get telemarketed leads for $15-$20 very easily, whether I do them inhouse or hire it done. To pay more than that is almost foolish. The trick is to get it down to $10-$12 a lead so you can make more money, this can usually only be done by having the telemarketer in house.

The only way the value of a telemarketed lead really increases is to have it with a 'pain-point' of why they are willing to change or need a different coverage. This is why agents love referrals from mortgage brokers, there is a change in their life, making the lead extremely actionable. Its unfortunate, but simply saving people a few dollars doesn't really get them motivated to switch. Saving them a lot of dollars does, but its almost a myth you can save anything really that significant (yes, it does happen, but not like the ads make it sound).

Its also unfortunate that telemarketed leads tend not to be the higher value clients for P&C. Yes, some great leads, but I've never successfully telemarketed $1,000,000+ homeowners (they are abundant in the bay area).

Now, if you do commercial telemarketing, there is a lot more room to work with, but the expectations skyrocket.

Dan

 

[Josh]

Thats a really bad assumption, not even sure how you got there, but it explains your thinking in a lot of ways.

The point is, for P&C leads, I can get telemarketed leads for $15-$20 very easily, whether I do them inhouse or hire it done. To pay more than that is almost foolish. The trick is to get it down to $10-$12 a lead so you can make more money, this can usually only be done by having the telemarketer in house.

You're comparing apples to turnips.

Sure you can hire folks to work in your office and buy lists for them and have ok results.

Option A: $15-$20/lead. Hire a telemarketer to work from home or in your office. Have them dial by hand or pay $100-$150/month for a dialer. Buy data at a higher rate because of the lower volume. Only be able to generate X amount of leads. Under this scenario the agent has to take the time to train, manage, and support the telemarketer(s).

Option B: $30-$40/lead (some flexibility). Have a telemarketing organization generate leads on a per lead basis that will have accountability for the quality that can generate any number of leads on a consistent basis so that the agency can grow at whatever rate they would like, fast or slow. Under this scenario the agent spends 0 time interviewing, hiring, training, or providing support for the telemarketers. All the agent does is specify which area they want the leads in and sit back and take phone calls of folks who are interested in switching because the telemarketing organization knows how to effectively develop scripts and train the telemarketers to generate hot prospects, not just ones that would like a free quote.

Dan, I respect you and I'm not trying to give you a hard time, but I think you're too readily dismissing the quality of the TM lead and comparing what I'm proposing to what you've seen, heard of, or experienced in the past.

In more context, when I was running an Allstate agency I worked leads from two different telemarketing companies and they are complete garbage. Even if I could get ahold of them they were a lousy risk with a low premium and/or completely unmotivated to switch. @ $30-$40/lead I wouldn't expect an agent to pay for that. I'd only expect them to pay for a lead that has decent premium and is motivated to change.

 

[Wochoppi]

After putting myself in your shoes, my main concern would be those of us P&C agents who have been sold over and over again on "good quality" leads only to have them turn out to be as crappy as a regular internet lead. Also, the commissions are generally small by comparison for those of us in the P&C market so there is little room for error when purchasing leads. However, if you can actually provide good quality leads, many would be willing to pay a little extra for good quality, but that's just it...it would only be a little extra and you would have to prove yourself before you would be able to squeeze extra $ out of us.

A good example would be an experience I had with Bolder Calls. They apparently were "hot stuff" and my company even had its managers trying to talk us agents into using them. They charged $16/lead. After a quick trial, roughly only 1 out of 10 was worth even trying to talk to and all the rest were garbage idiots with 1 vehicle and a DUI who said "sure it would be great to save some money on my car insurance." This in essence turned out to be a situation where I was paying about $160/decent lead and quickly cut this service. The sad part is, I know many other agents out there that are still using similar services and investing way too much in crappy leads so there is an opportunity out there for you.

I would recommend a variable pricing structure that would charge us agents a certain price per policy NOT per prospect. Say $5/policy. An example would be:

$5/1 vehicle prospect
$15/1 home and 2 vehicle prospect
$35/1 home, 4 vehicle, 2 rental property prospect

This has many benefits to both parties and could change the game. I know it is tougher to budget a variable pricing model and everybody works on the typical $X/lead theory, but we get paid more on bigger policies and less on smaller ones, so why not reflect that pricing into the lead cost? You give us larger sale potential and we pay more for your service...seems simple. On your end, you can legitimately make more $ by being more thorough and backing up the "quality" aspect. On our end, we know you aren't just pestering some lonely *** into saying he wants a quote on his car insurance and sending a bad lead our way. The more policies you try to include on a lead before sending it gives us substantially more accurate information which gives us better prospects and the more potential policies you discuss with the prospect makes you more money. Win=Win.

Why has this not been done? I have no idea, but I am sure you can find plenty of guinea pigs to test something like this out and report on it. God forbid we ever find somebody willing to tackle telemarketing who actually provides a solid value.

Good Quality + Good Price = Good Business

Random 1st post! Hope it helps or gives some insight!

 

[GeorgeF]

How many leads of homeowners with 2+ cars who want to shop their policy can you provide in a day in FL & GA? I would be interested. Send me some info to [email protected]

 

[1manshow]

If the leads were exclusive...and actively looking for options...the lead value goes up dramatically. Problem currently is that nobody offers these types of leads.

All my marketing is based on first year ROI and...lifetime client value ROI so a higher acquisition cost would be justified if the lead quality was good. Problem is, lead quality has never been good in the past..so, the skepticism continues

 

[Josh]

If the leads were exclusive...and actively looking for options...the lead value goes up dramatically. Problem currently is that nobody offers these types of leads.

All my marketing is based on first year ROI and...lifetime client value ROI so a higher acquisition cost would be justified if the lead quality was good. Problem is, lead quality has never been good in the past..so, the skepticism continues

As well it should.

Let me ask you this: If I were to offer to do lead generation for you based on performance meaning you only pay if you like the leads, is that something you'd be interested in doing?

 

[1manshow]

Certainly...especially if they were exclusive

 

[Josh]

Certainly...especially if they were exclusive

Send me your number and I'll try to give you a call next week and we'll set something up.

 

[gbbengi]

I used all of the active cold calling companies out there. I also hired internal telemarketers, which cost me more in headaches, but not much less money than I paid for leads once I figured in costs for babysitters, keeping the agency open, heated/cooled, lit up, long distance charges, extra water usage every night for 4 hours, these things add up fast!

My favorite provider offers exclusivity and will provide me information above and beyond contact info, drivers info, and vehicles. They guarantee a DOB (not an age range of say 58-63). They will ask for DL#s, and they will read MVR and credit disclosures for $19.00.

 

[Gbbengi1]

I am interested in learning more about this call center you own and what you are doing with it. I just stepped down from running a call center as the sole operator for over 4 years. I do not have a non compete statement, and I have plenty of customers/employees willing to follow.......
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Hiring telemarketers is a great idea, if you have patience. But a big hassle for alot of people.

The turnover is high, so hiring, firing and training can get old. One DNC mess-up can be costly and it's not just about the "do not call list", there are other regulations you should educate yourself on.

Realistically, you might go through 7-9 people in your first month or two to find 2 reasonably decent people who will stay with you for a couple of months.

Hypothetically speaking if you pay one telemarketer $9.00 an hour, they get ZERO leads during their first three days working a 4 hour shift from 3:30 to 7:30... Your cost for ZERO leads is $108.00. This is worst case scenario. Now imagine if you had two new telemarketers and they both had this happen, or if your first 2 months of hiring, firing and training and and you had 4-6 telemarketers fail like this. I know, not likely BUT it happens!

If a caller were to get one lead per day, your cost per lead is about $38.00 (the going rate is 2-4 dollars commission on top of hourly)

2 leads per day? Cost is about 20 bucks per lead.
3 leads per day? About 14.00 per lead-getting better!
4 leads per day? $11.00 per lead is not sounding to shabby.

But wait.... that is only the cost of labor....

Let's look at other expenses:

Typically agencies are open until 5:00 or 5:30 PM. But now you have telemarketers in house until 7:30. Your part time staff just became babysitters. They may be there an extra 8-12 hours per week so they can make sure the callers are working, and that the office gets locked up.

Now that your agency is open an extra 8-12 hours per week you need to keep the heat/air/electric on longer.

You have 3-4 phones in your office for your regular staff that leave at 5:30 right? Oh no, I have telemarketers coming in at 3:30, they need phones! Time to order more phone lines and phones!

Gotta remember if you call outside of your county there could be long distance charges too!

Go to donotcall and sign up for your san number to stay in compliance with DNC regulations, it's free and it only takes 15-20 minutes to do if you speak government lingo.

Order your calling lists from cole directory or whereever at say 10 cents a pop.

Those have to be scrubbed every 31 days, you can purchase scrubbing software or use an online vendor who will charge you monthly.

Your telemarketers are going to have full use of facilities. Including but not limited to your coffee, microwave, water, restrooms, toiletries, office supplies, equipment.

Now that you have extra desks used daily, your cleaners will have to spend extra time and product in your office.

I can come up with more expenses based on my personal experiences with my agency, but I am sure you kinda get the point.

You can purchase leads individually for a set amount and that would be your only expense. $14.00 -$22.00 each.

There are a handful of lead providers out there, and the quality ranges. I would be willing to bargain that the cheaper leads are cheaper for a reason.