What should I be charging for w/c insurance leads to a PEO or agency?

[qommander]

Hopefully, my question is not against the community guidelines. Disclaimer: I am not seeking to sell leads on here. I just need to understand the P&C industry a little better and I need to learn how to place a value on my leads.

So I routinely generate queries from artisan contractors seeking workers' compensation quotes. I have been selling these to a PEO which makes money on the comp, admin fee, suta, futa, etc. However, I happen to know that others in my trade are selling them for quite a bit more than I do. I have estimated that the average gross revenue of an artisan contractor (my leads) to this PEO is around 6k per year. The PEO is closing on average around 4 of these per month out of around 280 leads per mo. So the annual return on these monthly leads is around 24k for the PEO. 24k per mo x 12 mo= 288k annually. I'm going broke on these leads too because the price keeps increasing for me to the point to where it's almost not worth it anymore. I already know the PEO is resistant to higher pricing, so I am considering going with another PEO. All my leads are exclusive.

Note: I have to charge per lead because my cost is variable. Meaning, some months there will be 200, some months there will be 300 and each of these leads cost me money. So I really need to place a value on each lead.

So, the final questions are:
1. What are these leads really worth to you if you were the PEO closing them at this rate?
2. What are they worth to you if you were a P&C agency closing them at this rate?

Thanks in advance for any feedback from y'all experts. Apologies if I have violated any rules or if I sound like a complete fool here. I'm just a lowly internet marketer. :/

 

[BADTROUT]

Maybe a different model... heck If you have a license, I'll give you 25%. If it's on a lead by lead basis and they close that much 25 bucks maybe? I dunno retention or premium volume... It's the guessing that makes it hard. I always wondered why there wouldnt be an arrangement where it was commission based, then if your lead servicing agency wasn't cutting it you would shop when your agreement was up.

 

[VolAgent]

Commission based off closed deals sounds great and all, but it requires being licensed. Also, it requires trust. How many lead buyers are willing to completely open up their books for verification?

That said, I'd like to know where you came up with the 6k in revenue per closed deal.

 

[VolAgent]

I agree on that.. So the PEO can get a slice of the comp, suta, futa and also charge a fat admin fee each month (its' all recurring revenue). So on average, they are getting about $500 per mo on the whole deal with all these fees. These higher risk contractors get slammed on these fees and usually PEO's are the only ones who will touch them so they can get away with it pretty easily. So it's about $500 per mo because you have small ones and big ones - this is an average. The $500 per mo x 12 mo is where the 6k comes in..

Gotcha, and of those only comp would be revenue for an insurance agency, unless they are also a PEO. There are other insurance needs that could bring it back up.

Any idea what the average payroll and number of employees are for these contractors?

 

[BADTROUT]

Anyone know if I can hide this post from search engines? lol..

If it happens on the internet, it stays on the internet!

 

[EugeneM]

Depends on what the finished product is - mid markets (25+ ee) confirmed gauranteed to show appointment (dont pay for no show) with the decision maker will go 100-300$ all day long.

If it is just an x-date with someone that showed some interest at some point and no physical appointment is set 40-75$

Not sure why you are selling to PEO's only... brokers would gobble up these leads and cross sell GL Commercial auto Inland Marine and then sell the owner life.

I would like to see an example... I would consider buying some for my brokers...

 

[newera]

Gotcha, and of those only comp would be revenue for an insurance agency, unless they are also a PEO. There are other insurance needs that could bring it back up.

Any idea what the average payroll and number of employees are for these contractors?

If I had to guess I would say 30 employees with an average wage of 40k ($1.2 million in wages). I have been in the PEO industry for twelve years now. I pay 40% of residual commissions on the admin fees for any lead that closes. Ten deals can get an agent or broker 100k per year in residual income!!!

 

[Greg Nowick]

Not sure if it's helpful but, I have a PEO list company and I charge created a subscription model for these leads and charge anywhere from $15 per lead down to $10 based on volume. These are marketing qualified leads, meaning the companies are able to buy, are with a PEO, but might not necessarily buy from you or entertain a meeting.

If they commit to the subscription, I let the client choose the size of the company, contact level, and PEO they want to target. I'll then provide the company name, address, PEO, WSE count, contact, title, direct line (cell or ext) and their email address. I'll also replace any of the leads that have outdated or incorrect information. Goal is for 100% accuracy across all leads purchased.

I hope that helps