Questions for Active Med Supp Agents

Discussion in 'Senior Insurance Forum' started by Josh, Dec 24, 2011.

  1. Josh
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    Josh Well-Known Member

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    For next year I'm planning on offering telemarketed Medicare supplement leads and looking for some feedback.

    The concept is telemarketed Med supp leads would be that the agent would be paying for time/dials vs per leads. Odds are the average cost per lead (someone who tells a telemarketer some of their information and asks for someone to call them back about saving money on their Medicare insurance) is probably going to end up around the $10-$25 range, but it's just like direct mail in the sense that you can get a great response rate or a low response rate. The leads are about as exclusive as they come and are only sold once. There would certainly be some garbage in the mix such as folks on tricare or that won't qualify on health, but overall an agent looking to grow their renewals could probably stay quite busy for about the cost of dropping 1,000 piece mailer every week.

    Specific questions for active Med supp agents:

    What would you be willing to pay on a fixed per lead cost without any filters for exclusive telemarketed leads?
    What type of an ROI would you expect relative to FYC?
    What is your monthly/weekly budget for leads?
    How much business do you do over the phone/internet?
     
  2. tins
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    tins Well-Known Member

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    My opinions (which are subject to change).

    What would I be willing to pay without filters? I'd not want to pay more than $20 per lead if there were no health filters.

    I'd hope and be very happy with 2.5-1 return on my money because I know with Med Supps, I'm not just looking at FYC...I get that commission year after year.

    My lead budget is ever-evolving.

    I do all my business face to face...although I have written a few apps from Netquote leads.
     
  3. billyg
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    billyg Well-Known Member

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    Fist, let me say I tried telemarketed leads a couple years ago and they were pretty much a rip-off (though it was with another company). But if I were to try again, following are the answers to your questions:
    1. I would be willing to pay between $15-$20 per lead, depending on volume.
    2. I would expect to see a minimu 3:1 ROI based on FYC.
    3. For Med Supp, I close almost all of them in person, but usually the appointment is scheduled after the customer has committed on the phone to switch/apply (the "Frank" approach).
     
  4. coachd
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    coachd Well-Known Member

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    If I get these leads I do not want a lead that says call me. I want it preset for my agents. For me I sell many over the phone and go face to face and write them up.

    I do not need filters.

    I would pay 10.00 to 15.00 per lead. That is what i pay now for my appointments.
     
  5. jacobtn
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    jacobtn Well-Known Member

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    You forgot to mention you require blank signed check ready when agents stop by.
     
  6. mustfastpitch
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    mustfastpitch Well-Known Member

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    LOL. At least he would have his agents go get it. ha
     
  7. Josh
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    Josh Well-Known Member

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    Thanks for all the feedback and I'm sure more is coming.

    As a point of clarification about preset call vs appointment:

    -Prospects are generally less threatened by a return call than some stranger coming to their house.
    -Once the prospect has had two touches (one by us and he by the agent) it is much easier to schedule the infamous "waiting for me wth their checkbook open" appointment.
    -No one wants to drive around running leads that are going to no show at at least a 25% rate.
    -It can be difficult to schedule a full day of leads, especially around an agents existing schedule.

    That all being said, it's no problem to close to an appointment instead of a return call, it's just usually better to make return calls before setting the appointment.

    To another earlier point, we're looking at a 2:1 FYC ROI most likely for it to make sense to do it on my end.
     
  8. shepnerd
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    shepnerd Well-Known Member

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    I'm ramping up my medicare business in January so this is coming from my previous background, not my medicare selling experience.

    Saying that, my personal concern is more on a return on my time than a ROI on something that is coming back to me that quick.

    For instance, I can get a great ROI calling aged leads or cold calling, but my time would be better spent paying someone else to generate warm leads so I can spend my time doing the things that pay higher per hour worked, like SELLING.

    At the end of the day its more about what you are left with in the bank account at the end of the week than anything else. I'd take a much lower ROI if I could leverage it and sell more faster.

    With that, though, comes the risk factor. With a lower ROI, I would be willing to risk less capital because if the ROI sank, it would have a more drastic affect on profit and increased risk for a loss. Having a lower ROI vs. the competition is OK, but it means you need to have better consistency to be competitive.

    My $.02.

    I'd be willing to try it when you get up and running, Josh. Shoot me note when you get there.
     
  9. Josh
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    Josh Well-Known Member

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    I think you "get it". I'll reach out to you first part of January.

    One of the things I find interesting about some med supp agents (if not most) is that they claim they're in it for the renewals, but as soon as we take a look at ROI they only look at the FYC, so if it costs them $100 to get a deal, they say they only made $100-$150 because all of the sudden we ignore years 2+. Sure there is no guarantee they'll keep the policy for a month let alone years, but on the average it's going to be more than one, probably closer to 4. My math leaves that as follows:

    Average four years X $250 = $1k commission (give or take) which means that a $100 COA puts that at around a 1,000% ROI. Obviously agents need money to eat and pay the bills while they're building their renewal business, but here are the numbers I'm looking at:

    Let's take an agent that is doing this relatively full-time:

    Agent works 40 leads/week and closes 1/8, that's 5 sales or $1,250 - lead cost puts $500 in the agents pocket for that week plus any other sales they are doing, more importantly, that's $1,250 in renewals for let's say an average of four years.

    I could be off with any of the above, but it seems like if I find the right agents to work with that "get it", then it could really take off. To quote Shepnerd above,

    That's the way this works.
     
  10. billyg
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    billyg Well-Known Member

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    I am now "As Earned" with all of my Med Supp contracts, and gald to be off of the advances (12%-18% is a lot to pay in interest). As such, any new sales that cost more than one month commission result in an immediate negative cash flow, though a long term positive cash flow.

    Let's look at the math: I spend $2,000/mo for about 100 leads and lets say I close 1/5 (%20), an optimistic percentage. At the end of the month I have 20 new sales, or about $500/mo in new income. It will be about 4 months before I have made back the $2,000.

    Is this a good investment for the long term? I think it is, since the residual income is what I would be after. However, one must be careful as to how quickly they start dumping money in. If you have $10K sitting around doing nothing, then it might work well. However, if you are looking to grow your business without a lot of debt, it may not be quite as attractive.
     

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