Mailhouses Who Sell Lead Cards

[ChicagoProducer]

Do any mailhouses sell the actual lead cards?
Let them do the mailing, the agent orders (a minimum I'm sure) of x number of cards in select zip codes, wait a few weeks for the cards to come in, and you're off and running.
Seems this would be a decent alternative instead of paying $/1000 mail drops. I ran across a company or two over the years who did this but I can't recall their names.

What do you folks think?

 

[Josh]

They might not be in business anymore. They're not going to get any better of a response if they mail it themselves or if the agent mails it, so they'd have to charge quite a bit per card to make it make sense for them and then the agent will come back and whine about price.

 

[ChicagoProducer]

It's the same principle of the mega-agencies (EFES, AUSREA, etc) providing x number of lead cards per week. Remember, those agencies charge the cost to the agent as well. Why not the agent just do it himself and find a mailer company willing to sell the end-product: the lead card.

2000 mailers with a 1% response is 20 cards. Average total cost approx $800. Thats $40 per card. Even at $700 its $35 per card. Likewise, a mailhouse could sell the cards for $25 each and be in the ballpark.

Mega-agencies use their volume power to get it down to $20 or less AND think they're doing the agent a favor. As well as haircutting his commission about 10-15%

 

[Josh]

Yeah, you don't get it.

The agencies pass A cost on to the agent, but it's most likely only an offset of the cost of the mailer.

Back to the you not getting it part, the response rate could be all over the place. Plus, for the most part agents who buy leads are whinny, temperamental, and overly demanding. What you're proposing is that a company take a gamble on a response rate to make a thin profit margin in the hopes that some agents will buy the lead cards. What if the lead card returned has dementia? Agent will want a refund. What if the lead card had a bad phone number? Agent will want a refund. What if the person who filled out the card doesn't qualify? Agent will want a refund. What if the agent doesn't sell anything on a lead card? Agent will want a refund. You get the idea?

The agencies you're referring to make their money off the override and are lucky to break even on the lead cards.

Let's talk numbers. Let's say there is a 1% response rate (which is never guaranteed) and the cost is $400/1k, we're at the $40/card. Just to break even they would have to sell every card they mailed, including the ones that say "DO NOT CALL" on them at $40/card. To make more money they would have to either sell at a higher price OR pull a higher response rate (which would most likely involve making it an unqualified lead). To be viable they'd have to sell lead cards at the $75-$100 range at which point agents would either not do it or just do the direct mail themselves and see what they end up getting.

It's a suckers bet to sell on a per card basis if you're not getting a piece of the action.

 

[senior-advisor-indiana]

Yeah, you don't get it.

The agencies pass A cost on to the agent, but it's most likely only an offset of the cost of the mailer.

Back to the you not getting it part, the response rate could be all over the place. Plus, for the most part agents who buy leads are whinny, temperamental, and overly demanding. What you're proposing is that a company take a gamble on a response rate to make a thin profit margin in the hopes that some agents will buy the lead cards. What if the lead card returned has dementia? Agent will want a refund. What if the lead card had a bad phone number? Agent will want a refund. What if the person who filled out the card doesn't qualify? Agent will want a refund. What if the agent doesn't sell anything on a lead card? Agent will want a refund. You get the idea?

The agencies you're referring to make their money off the override and are lucky to break even on the lead cards.

Let's talk numbers. Let's say there is a 1% response rate (which is never guaranteed) and the cost is $400/1k, we're at the $40/card. Just to break even they would have to sell every card they mailed, including the ones that say "DO NOT CALL" on them at $40/card. To make more money they would have to either sell at a higher price OR pull a higher response rate (which would most likely involve making it an unqualified lead). To be viable they'd have to sell lead cards at the $75-$100 range at which point agents would either not do it or just do the direct mail themselves and see what they end up getting.

It's a suckers bet to sell on a per card basis if you're not getting a piece of the action.

$400 per 1,000 is what it costs the agent. How much does it actually cost the mail house? It would definitely cause too many problems on a pay per lead basis. My leads average out to around $15 so I wouldn't g that route anyway if it was offered.

 

[Josh]

$400 per 1,000 is what it costs the agent. How much does it actually cost the mail house? It would definitely cause too many problems on a pay per lead basis. My leads average out to around $15 so I wouldn't g that route anyway if it was offered.

Exactly. Plus, what you'd call a lead vs what you'd pay for if it was a lead are two different things. Like I said before, if someone wrote "DO NOT CALL" on a lead card you wouldn't want to pay for it, but in your $15 number I'd bet a shiny nickel you're including it.

As to the cost to the mail house, I don't know the numbers, but they're not making much of a profit margin on it because it's a volume business. I would be surprised if they were making more than $100/1k.

 

[senior-advisor-indiana]

Exactly. Plus, what you'd call a lead vs what you'd pay for if it was a lead are two different things. Like I said before, if someone wrote "DO NOT CALL" on a lead card you wouldn't want to pay for it, but in your $15 number I'd bet a shiny nickel you're including it.

As to the cost to the mail house, I don't know the numbers, but they're not making much of a profit margin on it because it's a volume business. I would be surprised if they were making more than $100/1k.

I include every card I get back no matter what it has on it. I don't get very many at all that say do not call. I just stop by their house instead.
$100 per 1000 is a lot of money to make on mail. I figured it would be less than that.

 

[Josh]

I include every card I get back no matter what it has on it.

That's what I thought.

$100 per 1000 is a lot of money to make on mail. I figured it would be less than that.

I think that is a high number, but it's certainly not more than that. I think agents are under the impression that lead vendors make fortunes off of supporting them.

 

[josephlogaan]

Well I think they are no more doing the business

 

[STIBROKER]

I hear they all became telemarketers......

Well I think they are no more doing the business