Telemarketer Commission?

[Tylerstc]

I'm sorry for this question since I know there are similar threads, but I would appreciate any advice and input! I have had someone contact me that is a cold caller/telemarketer, and he wants to work together. Since I've never done anything like this, I'm not sure what kind of pay structure that is fair for both of us.

This is for Auto leads (might extend to home leads in the future). He buys aged leads, makes about 300 calls per day, and states he can get about 5 to 10 people interested in a quote. He would get all of their information, send it to me, then I would quote and follow up/bind the policy if interested. He would pay for the leads, I would be the producer and service the policies.

I never thought of giving renewal commission for a telemarketer since I would be the agent quoting, issuing, and servicing the book. Initially, he wanted 50% new/40% renewal commission, with no hourly or salary. To me, that seems ridiculous (the renewal commission).

We talked more, and got down to 25% new/25% renewal, plus $10 per qualified prospect he sends me. How does this sound? He is looking towards the future, and is wanting to build residual income. I have read of others paying telemarketers hourly plus bonuses, so not sure if anyone does commission. According to him, he is good at his job, so we would do a trial first.

Sorry for the long post, and again, I appreciate any advice!!

 

[SonnyJ]

I would pay him just like a lead company that provides live transfer leads. Those leads tend to cost around $20 - $30 per lead. He is providing the same service so pay him accordingly. I dang sure wouldn't give renewal money to him.

 

[sdguy]

I wouldn't pay him any percent of the commission. Pay him either a fixed rate per lead (example $25) or per sale (cost per acquisition ... $60 .... I am making up numbers). But I would never give up commission or renewal.

 

[thomasm]

Is he even licensed?

Does he want to become a producer?

If he wants to learn what how to quote bind and whatever else is involved once he turns the lead over to you, then yes I would work out some kind of split agreement as producer trainee under your agency, with some kind of buyout agreement once he's ready to go indie.

If he just wants to supply you with leads and collect a residual of your book? Tell him to keep dreaming!

 

[Tylerstc]

Thank you very much for the advice! That's what I was thinking, just wanted confirmation. Yes, he is licensed. He doesn't want to be a producer as far as i know. I'll just tell him it won't work and keep looking. Since I've been doing this solo, never had a producer, and get my business by referrals, this is all new to me.

I've never tried live transfer leads, I think I will give it a shot. I researched into it a little bit, and have seen allwebleads.com and livetranfers.com as two options. Any advice between the two is welcomed, but I will also do some more research.

Thanks again,

Tyler

 

[insurance1822]

No renewals for his telemarketing leads. Everybody is always trying to get their hands into renewals.

SDguy was spot on. Certain amount per lead + extra if it closes (assuming he's licensed..I wouldn't trust him telling you he is as proof.)

 

[1manshow]

I'll play the bad guy here. Firstly...what is your closing ratio? So...assuming you will actually close a certain percentage of these leads that you otherwise wouldn't have received.....how is it a losing proposition? I would actually consider a 10-15% renewal payment for additional business that will boost my contingency check...boost my production bonuses and boost my bottom line. Unless I was so freaking busy writing new business that I just didn't need any more.

 

[Tylerstc]

Thanks again for the replies and advice. I did check, and he is licensed. He is not interested in producing at this time. I would feel better about doing it myself as he hasn't been a producer so I wouldn't have to train him.

I think I would consider maybe 25% new and 10% renewals. That way I don't have an expense for business not placed. I write a decent amount of business, but not much of it is preferred. So I'm looking to grow my preferred book, maybe I could offer a bonus or commission for preferred Homeowners only.

I would also try and get referrals from the clients I write, and he wouldn't get anything for that, so that could be a good way to offset the commission he gets. I should probably try live transfer leads first though. This is a great forum and I appreciate all of the insight of wisdom you all have to share!

 

[marksinsurance]

I agree with SonnyJ - pay them per lead on the trial period - say 90 days. And you guys can renegotiate after the evaluation period. If the service is fantastic and generates great leads that you close (90 days should give you plenty of time to close hot Auto leads), then that should help you make up your mind on commission split.