The Secret to Selling Medicare Supplements

[Glen Shelton]

$200??? You lost me with that figure. Then you said $400??? There's no way. Plus, $1800 assumes 100% persistency for 6 years. I'm at 95%, including death of policyholder.

If the "big boys" have deep enough pockets, spending $400 to acquire $1800 over 6 years (even if it's a 90% persistency) is still an amazing return on investment.

 

[TDFnCali]

That's a lot, especially if you are not cross-selling. Looking at my per client comp that's almost 18 months to break even.

I scream if it takes me 6 months to break even.

I wouldnt spend $400 per client, but I spend about 400 now & I get 2-3 supp clients....or 135-200/client. I spend about a 125-150 per MAPD client (most of which are T65, so full $500+). 400 is rich!

 

[somarco]

I don't spend much on client acquisition any more. Occasional FB advertising. That's it. When I do invest $$$ my acquisition cost is less than $200. Actually less than $100 since FB advertising is so inexpensive when it works.

That being said I have also run FB campaigns that resulted in zero new clients. But that was mostly in the past.

When I run FB ads I limit the spend to $5/day and never run more than 30 days. Most are around 2 weeks. Some I have pulled after a few days.

I don't need the volume that some people on here need. Don't have a lot of overhead, no support staff, no downline agents.

My renewal block allows me a comfortable income. Adding another 100 - 130 clients a year, mostly through organic search, some from advertising, some by referral, works for me.

Hard cost for client acquisition is relatively low. I spend a lot of time researching and posting articles that attract eyeballs. Probably about 2 hrs a day. If I factored in my time cost for acquisition it would be much higher.

Avg comp is around $23/mo, about $280/yr. If I paid $400 to acquire a client it would take around 18 months to break even.

 

[kgmom219]

I don't spend much on client acquisition any more. Occasional FB advertising. That's it. When I do invest $$$ my acquisition cost is less than $200. Actually less than $100 since FB advertising is so inexpensive when it works.

That being said I have also run FB campaigns that resulted in zero new clients. But that was mostly in the past.

When I run FB ads I limit the spend to $5/day and never run more than 30 days. Most are around 2 weeks. Some I have pulled after a few days.

I don't need the volume that some people on here need. Don't have a lot of overhead, no support staff, no downline agents.

My renewal block allows me a comfortable income. Adding another 100 - 130 clients a year, mostly through organic search, some from advertising, some by referral, works for me.

Hard cost for client acquisition is relatively low. I spend a lot of time researching and posting articles that attract eyeballs. Probably about 2 hrs a day. If I factored in my time cost for acquisition it would be much higher.

Avg comp is around $23/mo, about $280/yr. If I paid $400 to acquire a client it would take around 18 months to break even.

I sell 3 lines (small group, U65 and O65). I spent around $500 in marketing last year. I will spend the same amount this year. (I host breakfasts for financial planners, they send me referrals)

Between 10/15/15 and 10/15/16, I'm on pace to add 200 policies. Persistentcy is running at 95%.

I get the "spend $400 to make $1800" idea and I'm glad it works for people.

But I'm with Bob, I don't need the volume and have barely any overhead. Couldn't be happier with my business plan.

 

[somarco]

Jen, your referral marketing results are amazing. How long did it take you to get a steady flow of referrals? How many FP's, accountants, etc are resources for you? I believe you have posted before that you host a breakfast every few months for your COI's.

Over the years I have tried a lot of different ways to generate prospects but what I do now works for me.

I have participated in networking groups, big zero.

Direct mail, nominal results.

Telemarketing, another flop.

Toyed with seminar marketing but my "models" weren't a good fit. People I knew that were running seminars had them ever 6 weeks or so at a cost of $6,000+ for each. That was a bit rich for my blood and they appealed to a different crowd.

When you find something that works for you, stick with it.

 

[Bevo]

That's a lot, especially if you are not cross-selling. Looking at my per client comp that's almost 18 months to break even.

I scream if it takes me 6 months to break even.

I would guess they are most certainly cross-selling. And I'm with ya, I'm addicted to a very fast ROI.

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My renewal block allows me a comfortable income. Adding another 100 - 130 clients a year, mostly through organic search, some from advertising, some by referral, works for me.

This is what I would call "The sweet spot". Exactly the numbers I would shoot for if I were to fly solo again.

If the "big boys" have deep enough pockets, spending $400 to acquire $1800 over 6 years (even if it's a 90% persistency) is still an amazing return on investment.

No doubt. They can afford to shell it out and wait. The numbers will come, that's only waiting 16-20 months (a LOT of variables here guys) for a ROI. I would bet heavy that this will only keep going up.

The small guy unfortunately, cannot.

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But I'm with Bob, I don't need the volume and have barely any overhead. Couldn't be happier with my business plan.

Absolutely awesome mindset IMO.

 

[kgmom219]

Jen, your referral marketing results are amazing. How long did it take you to get a steady flow of referrals? How many FP's, accountants, etc are resources for you? I believe you have posted before that you host a breakfast every few months for your COI's.

Over the years I have tried a lot of different ways to generate prospects but what I do now works for me.

I have participated in networking groups, big zero.

Direct mail, nominal results.

Telemarketing, another flop.

Toyed with seminar marketing but my "models" weren't a good fit. People I knew that were running seminars had them ever 6 weeks or so at a cost of $6,000+ for each. That was a bit rich for my blood and they appealed to a different crowd.

When you find something that works for you, stick with it.

I actually started with a BNI networking group. I did it for a few years, made some great contacts. Best the part of BNI, IMO, is the training on HOW to network. Made a lot of contacts and thats how I started getting into FP offices. There was a successful FP in the group who introduced me to her colleagues. I still regularly talk to people from the group.

I probably have about 50 active COIs at this point. But it took me about 7 years to get here. (Which was fine, because from a personal view, I really couldn't put any more hours in until then.) I used to host breakfasts quarterly, but now I do one a month in June, July, Aug and Sept. The numbers increase each time and usually in Sept I have to tell people its full. Its around $10 per person. The room holds 15 people.

I'm too cheap for direct mail, so that hasn't happened.

A few years ago, I put $1K into internet leads. I think I got one policy out of it that stayed on the books for 3 months.

I think its great that people can sell to virgins over the phone, 6 states away via bought leads. I can't do it. I sell to people that were referred by friends or the person who handles their money. I network better than I sell.

My "tricks" are:

1. I only sell health. I even terminated all my life contracts, so they know I'm not selling their clients anything else. My Medicare presentation tees up LTC and at that point, I know the health history, so I pitch the Pac Life annuity or LTC and tell them I will have their FP contact them to discuss. The FPs love that. And I'm shocked at the number of people who think Medicare will pay for their nursing homes.
2. I sell myself as a way to keep their clients from talking to anyone else, who just might happen to sell annuities or LTC or whatever.
3. They use me to bring the clients in at 64. I talk about Medicare and they talk about moving the 401k to an annuity. Then I let the client know I will follow up with them 90 days out for Part B, then 60 days out for Plan G and Part D.
4. If some gets laid off, the first person they call is their FP. Who tells them to call me ASAP, before they sign up for COBRA. Sometimes I sell it, sometimes I tell them to stay on COBRA. BUT...right now I'm helping these people for zero comp. Which isn't great, but keeping the FP happy is worth the hour. Plus, there aren't any jobs in the 75K to 150K range anyway, so they get contacted during OEP and I get the sale at that point. Its not like Im working that hard right now, anyway.
5. Small business looking to start a group plan typically meet with their FP to get the money. I have a bunch of micro groups. Some stay micro, some grow, some go out of business. I still wind up keeping the clients.

I'm at 80% phone only. And thats probably going to hold. I only schedule out of office meetings on Tues and Thurs, unless its critical. I have NO Friday meetings, phone or in person EVER. Fridays are for my to-do list only. Scheduling appts. Making sure applications are processed. Sending thank you cards. Follow ups on service issues. I usually wake on Friday to 20-30 tasks. I really think making this shift has been critical to my success.

Anyway, thats my exciting "how I do it" list. And why when you say $400 a policy, I don't get it.

But to each its own. I want everyone to be successful, with whatever works for them.

And thanks, Bevo!

 

[TDFnCali]

I sell 3 lines (small group, U65 and O65). I spent around $500 in marketing last year. I will spend the same amount this year. (I host breakfasts for financial planners, they send me referrals)

Between 10/15/15 and 10/15/16, I'm on pace to add 200 policies. Persistentcy is running at 95%.

I get the "spend $400 to make $1800" idea and I'm glad it works for people.

But I'm with Bob, I don't need the volume and have barely any overhead. Couldn't be happier with my business plan.

I spend 2-3x that a month....someday I'll be there though, where Im spending very lil on marketing, thats time.

 

[Glen Shelton]

I actually started with a BNI networking group. I did it for a few years, made some great contacts. Best the part of BNI, IMO, is the training on HOW to network. Made a lot of contacts and thats how I started getting into FP offices. There was a successful FP in the group who introduced me to her colleagues. I still regularly talk to people from the group.

I probably have about 50 active COIs at this point. But it took me about 7 years to get here. (Which was fine, because from a personal view, I really couldn't put any more hours in until then.) I used to host breakfasts quarterly, but now I do one a month in June, July, Aug and Sept. The numbers increase each time and usually in Sept I have to tell people its full. Its around $10 per person. The room holds 15 people.

I'm too cheap for direct mail, so that hasn't happened.

A few years ago, I put $1K into internet leads. I think I got one policy out of it that stayed on the books for 3 months.

I think its great that people can sell to virgins over the phone, 6 states away via bought leads. I can't do it. I sell to people that were referred by friends or the person who handles their money. I network better than I sell.

My "tricks" are:

1. I only sell health. I even terminated all my life contracts, so they know I'm not selling their clients anything else. My Medicare presentation tees up LTC and at that point, I know the health history, so I pitch the Pac Life annuity or LTC and tell them I will have their FP contact them to discuss. The FPs love that. And I'm shocked at the number of people who think Medicare will pay for their nursing homes.
2. I sell myself as a way to keep their clients from talking to anyone else, who just might happen to sell annuities or LTC or whatever.
3. They use me to bring the clients in at 64. I talk about Medicare and they talk about moving the 401k to an annuity. Then I let the client know I will follow up with them 90 days out for Part B, then 60 days out for Plan G and Part D.
4. If some gets laid off, the first person they call is their FP. Who tells them to call me ASAP, before they sign up for COBRA. Sometimes I sell it, sometimes I tell them to stay on COBRA. BUT...right now I'm helping these people for zero comp. Which isn't great, but keeping the FP happy is worth the hour. Plus, there aren't any jobs in the 75K to 150K range anyway, so they get contacted during OEP and I get the sale at that point. Its not like Im working that hard right now, anyway.
5. Small business looking to start a group plan typically meet with their FP to get the money. I have a bunch of micro groups. Some stay micro, some grow, some go out of business. I still wind up keeping the clients.

I'm at 80% phone only. And thats probably going to hold. I only schedule out of office meetings on Tues and Thurs, unless its critical. I have NO Friday meetings, phone or in person EVER. Fridays are for my to-do list only. Scheduling appts. Making sure applications are processed. Sending thank you cards. Follow ups on service issues. I usually wake on Friday to 20-30 tasks. I really think making this shift has been critical to my success.

Anyway, thats my exciting "how I do it" list. And why when you say $400 a policy, I don't get it.

But to each its own. I want everyone to be successful, with whatever works for them.

And thanks, Bevo!

I must admit - very impressive! Networking is key for really any business and it sounds like you have really figured out what works for you!!!

As an independent agent I would definitely struggle with a customer acquisition cost in the $400 range, but I can see where it makes sense if you are a large agency/IMO/FMO/Call center and you have a marketing budget of lets say $100,000+ I could see where spending $400 per client to net 250+ clients would make sense.

I'm all about getting the customer acquisition cost as low as possible!

Even if it means additional sweat equity.

 

[vic120]

I just had a long convo today about this with a trusted affiliate. Seems some of the big boys are paying $400+ with ease for Med supp clients.

as far as $400 cost per acquisition all things in perspective.If I was able to do 40 or 50 deals myself per month and I had the finances to do that, Then It makes sense

I can get my cost per acquisition down under $100 per deal but It would require working very shared leads (from one of my FMO's) and going through so many That I could not do more than 5 deals in a month on my best month. Right now my Cost is Around $200 pe deal and that works for me for the amount of deals per month