Don’t Lower Your Commissions for Leads

[ksigmtsu]

Re: Don’t Lower Your Commissions for Leads

That is very true. An agent has to have some skin in the game. I was recently given some free leads by the company that I buy leads from. They were leads that someone else apparaently bought and didn't work. They are in an area of Tn. that I don't work very often and I will get to them in time. You can bet that, if I had paid for them, I would have already worked them.

If they're east TN i'll work them right now, lol.

 

[jdeasy]

Re: Don’t Lower Your Commissions for Leads

If they're east TN i'll work them right now, lol.

Nah, they are in Montgomery County, {Clarkville}. I'm gonna be in the Hopkinsville, Ky area in a couple of weeks, I'll try to work them in then.

But, thanks anyway!!

 

[Guest]

Re: Don’t Lower Your Commissions for Leads.

Not in every case, HSA for America pays a higher comp if you generate your own lead/referral, and they have the structure of providing leads and paying a lower comp like the topic of this discussion.

However, since everyone on this forum seems to think they know what they're talking about, they only usually know their world, so allow me to show another example or two.

It was stated that if you give agents leads, they won't work as hard, true in most cases but . . .

1: HSA for America (who provides leads) had a few of their agents do over 1 million in av last year, so I'd say they ain't slacking off.

2: The three med supp agents who I provide leads for write over 30 policies each per month and growing. We are connected via technology all day, they're working.

3: If you hire someone and they don't work, fire them, it's simple, you need to run a business, do not allow people who don't want to succeed bring down your overall profitability by disregarding the leads/tools etc.

Also, the idea about an agency getting leads and taking a piece is true and it's lame!! I was appalled that when I set up lead agreements (discounts for my agents) that almost every lead broker offered me some kickback, like to give me $.50 profit off of every lead that my agents buy, what BS, why do I need to make fifty cents per lead if that agent is selling under me? Isn't it more beneficial if my agent gets a better price for the lead?

For example, because I don't take a cut, my agents get ileads for $4 a pop (instead of $5), so they can buy more leads and create opportunities to sell more. Now for $20 they get 5 leads instead of 4.

If you hire better, and treat them better, then they'll do better.

What REALLY REALLY REALLY stinks, is that even when someone who is in a contract like this would generate their own lead by working hard to get a referral...they STILL get a low commission.

 

[VacantHomeIns]

Re: Don’t Lower Your Commissions for Leads

We could not agree more, our entire vacant home insurance model is based on this as well. This is very good information and we think, unlike many, posts like this are great

 

[GreenSky]

It's not what you make, it what you keep.

If someone would provide me with great appointments, I'd take reduced commissions. But I have yet to find anyone that could create a direct mail piece that generates as good a return than I do.

Rick

 

[Tom Highway]

Re: Don’t Lower Your Commissions for Leads

To extrapolate a little further on your example:

_An agent writes $2000 ann. prem. for the week.

_Assume agent worked 20 FE leads that week to get that $2k prod.

_Which is best (for the agent):

1. 100% comm., paying $400 to drop 1000 FE pieces, and getting back a 1% response (which means $40 per lead), so we will assume this agent paid $800 to drop 2000 pieces to bring in the 20 FE leads. (2000 x 1%).. (still $40 per lead)...1% response pretty good ave. figure for us to use...usually .5% - 1.5% response rate for FE.

2. 85 % comm. paying $25 per lead for 20 leads (buys these leads from his upline), the upline assumes all the risks in response rates of the mail drops.

3. 50% comm. with 20 free leads

Scenario #1: $2000 prod. x 100% x 75% advance = $1500 in comm. $1500 - $800(for the 2000 pc. drop) = $700 Net Profit.

Scenarion #2: $2000 prod. x 85% x 75% advance = $1275 in comm. $1275 - $500 (20 leads @ $25 each) = $775 Net Profit.

Scenario #3: $2000 prod. x 50% x 75% advance = $750 in comm. $750 - $0 leads costs = $750.

Net profits pretty close to each other considering the wide difference in comm.% for each of the 3 agents.

The leads cost the agent pays influences the Net Profit for the agent as much if not more than comm. %.

Now it's true the agent at 100% comm. could avoid lead costs by cold calling all week knocking on doors. But the EXTRA time it would take cold calling to write the $2k prod. would kinda be offset in that he would make less comm. per hour. (we assumed in the 3 scenarios above that the same amount of time was spent working the 20 leads)

Scenario # 2 is the best right?

If there is an error in my math please point it out.

Your cost for a mail drop in scenario 1 is too high.

 

[theinsuranceman]

Re: Don’t Lower Your Commissions for Leads

Your cost for a mail drop in scenario 1 is too high.

Powerstreet does 1000 pcs. for $400, unless they've INCREASED their price. Who do you know who drops 1000 pcs. for much less than $400? Inquiring minds want to know.

 

[Tom Highway]

Re: Don’t Lower Your Commissions for Leads

Powerstreet does 1000 pcs. for $400, unless they've INCREASED their price. Who do you know who drops 1000 pcs. for much less than $400? Inquiring minds want to know.

i
I can do it for less on my own, don't need main street power mail

 

[theinsuranceman]

Re: Don’t Lower Your Commissions for Leads

i
I can do it for less on my own, don't need main street power mail

Sounds great! Can you lay out the math on this? Don't forget to include your TIME to do the 1000 pcs., as you could be selling rather than hand addressing the envelopes.

 

[sshafran]

Re: Don’t Lower Your Commissions for Leads.

Robliano,

HSA for America sounds like they have a good program.

Not in every case, HSA for America pays a higher comp if you generate your own lead/referral, and they have the structure of providing leads and paying a lower comp like the topic of this discussion.

However, since everyone on this forum seems to think they know what they're talking about, they only usually know their world, so allow me to show another example or two.

Most of what is posted in the forum should be qualified. What I mean by that, is there are few absolutes. Just because I didn't qualify to your satisfaction, didn't mean that in general the statement was not accurate.

Thanks for the info on HSA for America. If I were a betting man, I'd say that they are an exception to a general rule. Would you agree?


----------------


EDIT - Nevermind about the comment, "HSA for America sounds like they have a good program." Just looked it up on the forum...looks like it is not well-liked.

But, I do like the idea that IF you are going to set things up to pay someone for you leads at a lower commission, if you do generate your own business, you get higher commission.