New to Medicare biz, but the math doesn't work

[BennyTrenton]

Hi everyone, I've just gotten into the Medicare Supp sales biz after reading How to Qualify, Present & Sell to Seniors by Justin Bilyj. He's a really great writer who explains the ins/outs and its inspired me. But I'm really struggling with the math in my business plan. In the book he creates a model where you buy Medicare leads for $10 each and close 1 out of 12 to generate a net commission of $240 per sale. That's great, I could make that work (I know the plan will change soon as I hit the real world, but its just a baseline to work against for me).

But the problem is I can't find any legit lead vendors close to the $10 lead cost. If I look at the lead site that the book mentions, the price is $40 per lead. Assuming I'm closing 1 out of 15 for the first year at best (newbie + teles-ales), it makes it difficult.

Is there something I'm missing? I know the benefit of this biz is in the renewals, but it seems like the costs of real-world leads don't match up to what's in the book even remotely.

Appreciate all the advice and direction members of this forum share with newcomers.

 

[LostDollar]

Caveat, NOT an agent.

Just checked the copyright date for your book on amazon. Fall of 2016. 6 years ago.

I doubt you are missing anything. I think posts on the site over that period have suggested lead costs have steadily increased, and you may also find DM returns have dropped in the last couple of years.

 

[DonP]

Hi everyone, I've just gotten into the Medicare Supp sales biz after reading How to Qualify, Present & Sell to Seniors by Justin Bilyj. He's a really great writer who explains the ins/outs and its inspired me. But I'm really struggling with the math in my business plan. In the book he creates a model where you buy Medicare leads for $10 each and close 1 out of 12 to generate a net commission of $240 per sale. That's great, I could make that work (I know the plan will change soon as I hit the real world, but its just a baseline to work against for me).

But the problem is I can't find any legit lead vendors close to the $10 lead cost. If I look at the lead site that the book mentions, the price is $40 per lead. Assuming I'm closing 1 out of 15 for the first year at best (newbie + teles-ales), it makes it difficult.

Is there something I'm missing? I know the benefit of this biz is in the renewals, but it seems like the costs of real-world leads don't match up to what's in the book even remotely.

Appreciate all the advice and direction members of this forum share with newcomers.

I’ll give you some advice . If you do mapd telesales in the lower middle to low income mkt you’ll go broke . Guys like me replace telesales apps left and right . You’ll lose 30-40% a yr in telesales in those mkts . If doing telesales non aep concentrate on sups

 

[UKTX]

If you can find leads that cost $10 each they will be pretty much junk.

You won't close 1 out of 12 @$10 a lead.

You will either have to go high volume, low cost, low quality or low volume, high cost, higher quality.

Either way you go as a newbie is tough, if you want to be Independent. I started with a captive in the 2000's and went independent in 2008/2009. I doubt I would still be in the business if I went out the gate as an Independent when I first got licensed.

My best advice (FWIW) is to forget that book and go learn at a captive first. Make your mistakes on their dime and then make the transition. So many agents wash out of this business because of lead costs......

 

[BennyTrenton]

Caveat, NOT an agent.

Just checked the copyright date for your book on amazon. Fall of 2016. 6 years ago.

I doubt you are missing anything. I think posts on the site over that period have suggested lead costs have steadily increased, and you may also find DM returns have dropped in the last couple of years.

Thanks, yes, that's a good point. Market has likely moved on significantly from then. But I assume that people buying $40 leads are still somehow making enuff money to justify it.

 

[BennyTrenton]

I’ll give you some advice . If you do mapd telesales in the lower middle to low income mkt you’ll go broke . Guys like me replace telesales apps left and right . You’ll lose 30-40% a yr in telesales in those mkts . If doing telesales non aep concentrate on sups

Thanks for the guidance.

I will avoid (or minimize) MAPD.

 

[LostDollar]

Thanks, yes, that's a good point. Market has likely moved on significantly from then. But I assume that people buying $40 leads are still somehow making enuff money to justify it.

The only thought I can offer there is to see you have the cash to support new agent close rates on current lead costs and responses and returns. I would expect your startup costs to be noticeably higher than whatever is posed in the book. For Medigap sales, the other important thing would be to look at the change in Medigap plans that can be sold to new T65's.

 

[Newby]

Is Justin even still in the biz? He used to be very active here but I haven’t heard his name in several years. Anyone know?

 

[axeman462]

Closing ratio should be higher, and mapd pays higher. Especially in NJ

 

[Travis Price]

Thanks for the guidance.

I will avoid (or minimize) MAPD.

I'm 100% telesales and independent. I sell MAPD. I've never had one replaced.

Most of the people Don is replacing is DSNP and those telesales agents are sitting in a call center making 17$ a sale with no chargebacks (so they don't care.)

That's a couple of caveats he isn't telling you.

It's much harder to replace regular MAPD as they have 7 weeks (not counting OEP) they can advertise and seniors go into hiding from mailers when AEP rolls around.

I preserve my book during AEP and take on new people that call me.

Here's the skinny, credibility is PARAMOUNT in telesales (not working in a call center...) You should really take some time to develop your online presence, gain public exposure on Google and other credible websites, and read the damn Medicare and You book.

Your website should be 100% informational with a number to reach you.

Learn how to educate, free of charge, and that'll be half the battle.

Any lead you don't develop yourself usually sucks.

Seriously, if you want to be successful in Medicare telesales (again, non-call center) check out the King of the Hill episode, "The Miseducation of Bobby Hill"