Went to the SL meeting
- Thread starter billyb
- Start date
- 17,068
If the leads are exclusive and will never be resold then it's maybe acceptable if you are broke and trying to get into the biz without saving up some money first and doing it right. But it's not a great deal.
Do the math. You are saving $12 per lead over normal. So if you buy 20 per week that is a savings of $240.
But you are giving up 30% on your commissions. Most FE companies pay 120% so 90% is 30% less. So you are losing $300 for every $1,000 in premium you sell. If you only sell $2,000 per 20 leads which is way low (you should be selling $3000 or more per 20 direct mail leads) you are giving up $600 to save $240 on your leads. Not great unless you plan to sell less than $750 premium per 20 leads.
Also you want to know the quality of the leads. The two biggest quality markers are: Will these leads ever be re-sold? If yes, (or maybe) I would only pay that price if I was at full commission. And what are the GUARANTEED ages. 55-79 is what you want. 50-85 is OK as long as most are in the middle range. 40-85 is not acceptable at all.
There are a lot of factors to look at. But I would not take free or discounted leads at reduced commissions. If I was a broke agent I would mow lawns or drive Uber on weekends to cover my leads until I got things flowing.
- 7,090
If this:
and the other things like it which you have been saying about your territory for the last two years are true;
then the answer to this:
is NO.
The only reason you are asking the question is because your hope is being preyed upon.
WHAT is this company going to do differently than any other lead source you have dealt with in the last two years to get you enough brand new (never been mailed before) leads (with folks anxiously waiting by their phones for your call) to earn a living from in the territory you have to work with?
and the other things like it which you have been saying about your territory for the last two years are true;
then the answer to this:
is NO.
The only reason you are asking the question is because your hope is being preyed upon.
WHAT is this company going to do differently than any other lead source you have dealt with in the last two years to get you enough brand new (never been mailed before) leads (with folks anxiously waiting by their phones for your call) to earn a living from in the territory you have to work with?
- 7,090
- 6,134
We are the ones that he saw with $18 DM and 90% comp. With production, that can move to 100% comp and $12 direct mail.
We also do high comp (street or above) with full price leads.
Those two programs both have the same lead and we don't resell the leads.
I always tell agents that the higher comp and higher lead price is better in a perfect world. Unfortunately we don't live in a perfect world. Very few agents can come into this business and invest a large enough amount of money for a weeks worth of leads.
The reason we rolled out the other option was because so many agents wanted the highest comp possible, but when we would receive their DM order, it was for 10 or 15 leads per week. Agents usually want the minimum and dip their toe in. That doesn't work in this business. The lower lead cost option allows the agent to get the 25-30 range each week.
I have agents that would be more profitable on the higher comp program and I've told them several times that they can switch over to it. They stay because paying $240 for 20 fresh, exclusive DM each makes them less stressed.
Again, we just wanted to have OPTIONS for the agents. Some agents want to run leads for 20 years and write unpronounceable carriers that pay as earned on a 100% contract. Some want a different option.
Hope this clears up the confusion.
We also do high comp (street or above) with full price leads.
Those two programs both have the same lead and we don't resell the leads.
I always tell agents that the higher comp and higher lead price is better in a perfect world. Unfortunately we don't live in a perfect world. Very few agents can come into this business and invest a large enough amount of money for a weeks worth of leads.
The reason we rolled out the other option was because so many agents wanted the highest comp possible, but when we would receive their DM order, it was for 10 or 15 leads per week. Agents usually want the minimum and dip their toe in. That doesn't work in this business. The lower lead cost option allows the agent to get the 25-30 range each week.
I have agents that would be more profitable on the higher comp program and I've told them several times that they can switch over to it. They stay because paying $240 for 20 fresh, exclusive DM each makes them less stressed.
Again, we just wanted to have OPTIONS for the agents. Some agents want to run leads for 20 years and write unpronounceable carriers that pay as earned on a 100% contract. Some want a different option.
Hope this clears up the confusion.
- 17,068
Ben you just re-stated my 1st paragraph: "If the leads are exclusive and will never be resold then it's maybe acceptable if you are broke and trying to get into the biz without saving up some money first and doing it right. But it's not a great deal."
But I do like options. If every IMO does the exact same thing then the world would only need one IMO.
I have helped a few agents with low commissions and cheap leads several times but I hand pick those guys very carefully and use it sparingly and get them to full commissions quickly. Because most people who aren't motivated enough to come up with extra money to go into a business are not motivated enough to do whatever it takes to succeed once they are in the business. Could be wrong. You guys are obviously having success making the cost of admission easier or else you wouldn't continue to do it.
But the answer to the question he asked is: No that is not an attractive pay plan/lead cost. It's not my opinion. It's math. If you have to start that way, get off of it as soon as possible.
- 6,134
You are 100% correct!
Even with this program, we are very selective. The person from this thread that asked me about going on that program, I passed on. It's not for 10 leads per week. It's for someone to get started and move up.
During an agents first 2-3 months, they will make several mistakes while learning. This program allows them to buy MORE leads so those mistakes don't hurt as bad. As soon as they are consistent and happy with their results, they shoot over an email and we move them up.
- 5,954
$18 and 90% vs $32 and 100% ... I got to say that if I were a new agent I'd go for the 18/90 rather than the 32/100, not because the math works out more favorably, but because I'd run 35 leads a week at 90 for $640 rather than the 20 leads at 100 ... now the numbers will more than work out.
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- 5,954
Can't put a price on lowering the stress level, that's for sure. I've been knocking cold doors and knocking aged leads I (or someone else) paid for long agao). I'm whistling while I work with little to no lead cost. Far less stress than trying to cover a $30,000 to $50,000 nut every year ... especially when that nut comes at you in big chunks on a weekly basis.
I think your deal is probably a very good one for quite a few folks. I get Newby's math, but at this point Newby's been sitting pretty for so long he likely forgot what its like to be a working man (or woman) trying to cover your biz cost and family costs while starting a new biz. Good on you for offering such a program to new agents with a clear path to move up if they want.
- 4,120
To write 200-350k that's the return on investment not even time
