Some Thoughts On Improving Direct Mailer Response Rates

Rearden

Guru
5000 Post Club
Hi Guys:

We have discussed at length on simpler ways to lift final expense lead response rates, chiefly through eliminating references to life insurance on the reply card.

Today I'd like to explore other ways to lift response without changing the lead piece, namely through modification of the mailing list itself.

For you final expense agents marketing to the "final expense" market (50-85, 0-50k HHI), I would wager all of you share similar breakdowns of your final expense clientele:

1) 90% or greater are on a fixed income.

2) Most sales made to single person households aren't earning any less than $650 a month, and sales made to multi-person households aren't earning any less than $1300 a month.

3) Anecdotally, less than 10% of sales are made to either (a) single person households, or (b), multi-person households, making more than $2500 a month.

4) Building on Point 1, virtually all sales are made to people on Medicare.

Based on my personal sales experience above, here are some thoughts I am having:

A) There are close to 60 million people in America between the ages of 50 and 64 -- there are close to 9 million people classified as "Disabled Workers," which I would figure would represent (a) 18-64 year olds, and (b), would overwhelmingly be in the 50-64 age bracket.

Here's my point -- if 90% of my clients aged 50-64 do not work, are disabled, and on Medicare, why should I continue to waste so much marketing dollars on leads going out to a low-opportunity suspect?

B) In one of my favorite counties to work, there are approximately 12,000 50-85 year olds with a household income of $0k-$50k. Putting an income filter of $7k-$30k on 50-85 year olds cuts that number of mailing recipients in half.

My thoughts are - even if I lose a small minority of respondents by focusing the income strata, even with the nearly 50% reduction in names, if I get the same number of "ideal" names to respond anyway, I should close to double my response rate, thus reducing my lead cost by half.

C) If 90% of my customers 50-64 are on disability, and 95%+ are on Medicare, why not just mail people ages 50-64 who receive Medicare benefits, versus wasting marketing capital on low-opportunity names?

Just some out-loud thoughts I wanted to share; with response rates continuing to plummet, it's important to think creatively on how to maximize our marketing dollars so this life insurance niche remains profitable to pursue.
 
Seems like a lot of overthinking and worry. The response on the E64 has not plummeted here. In fact, it continues to increase.

And mine is an area with some counties where EFES stopped mailing because of the low response. I mail to the $0-$40,000 incomes and ages 50-80.

I don't track percentages of the ages I sell but I know I sell quite a bit to the age 50-60 group.

Then I get referrals from them too. Just this week I got a referral from a 36 year old client. Sold her 2 years ago. I get a call from a lady that said this girl told her about me. I ask no questions other than where they live so I can go see them.

I had in my mind that it was someone in the same age group as the referrer and was thinking another $25/mo sale like the the referrer pays.

Turns out it was a 61 year old lady and her husband who was 69. Left there with $196/mo. total.

Of course the 36 year old that referred me was a referral herself.

When one puts limitations on the people they will mail to then they are also putting limitations on their own sales.

In my experience anyway.
 
Seems like a lot of overthinking and worry. The response on the E64 has not plummeted here. In fact, it continues to increase.

And mine is an area with some counties where EFES stopped mailing because of the low response. I mail to the $0-$40,000 incomes and ages 50-80.

I don't track percentages of the ages I sell but I know I sell quite a bit to the age 50-60 group.

Then I get referrals from them too. Just this week I got a referral from a 36 year old client. Sold her 2 years ago. I get a call from a lady that said this girl told her about me. I ask no questions other than where they live so I can go see them.

I had in my mind that it was someone in the same age group as the referrer and was thinking another $25/mo sale like the the referrer pays.

Turns out it was a 61 year old lady and her husband who was 69. Left there with $196/mo. total.

Of course the 36 year old that referred me was a referral herself.

When one puts limitations on the people they will mail to then they are also putting limitations on their own sales.

In my experience anyway.

Thanks, John.

There is a difference between over-thinking and worry versus intelligent planning and vetting out low-opportunity.

Arguably an agent is not limiting who he sells to if he figures out a way to trim his marketing budget and focus on the names that fit his most common group of customers.

Have you not said most of your clients are making below $1000 a month, meaning most of your clients are on Medicare?

If the group above represented 90% of your sales, why invest up to 50% of your marketing capital on 10% of your customers?
 
If you really want to narrow it down, the stat you need most is the percentage of each group that replies. There are several ways to accomplish this but the easiest would be to simply mail 1000+ 50-60 one week and see how many replies you get...1000+ 60-70 in the same income group the next time, so forth and so on and then track the replies you get. If only 1/4% of the 50 to 60 reply and 2% of the 60-70 reply, you know where to concentrate your efforts. Might cost you some money initially but might also pay off in the future with increased returns.
 
Thanks, John.

There is a difference between over-thinking and worry versus intelligent planning and vetting out low-opportunity.

Arguably an agent is not limiting who he sells to if he figures out a way to trim his marketing budget and focus on the names that fit his most common group of customers.

Have you not said most of your clients are making below $1000 a month, meaning most of your clients are on Medicare?

If the group above represented 90% of your sales, why invest up to 50% of your marketing capital on 10% of your customers?

Many are on medicare and many more are on medicaid. I've found that the income levels are not all that accurate anyway. I still pull up at million dollar homes from the E64 card.

If I knew who the buers were in advance then of course I would only mail to them. But since we don't know then we have to mail to the masses.

If it ever gets developed to the point that the buyers can be identified before the mail is sent then the companies will just target them and sell direct to them without an agent.

Until that happens they depend on us to find the buyers.
 
Today I'd like to explore other ways to lift response without changing the lead piece, namely through modification of the mailing list itself.

Dave, I have tweaked to death every age, income, and race scenario humanly possible on Direct Mailers using the good ole Generic "E64" lead in order to find that sweet spot of buyers and have failed miserably! lol

The one thing that I keep asking myself is, "how can my wife and I get in front of more buyers?"

What seems to work for us is using Direct Mail, targeting 50-80 yrs old and $0-$50,000 annual Income filters along with rotating Tele-market Lead companies in our areas.

Mixing in a dependable Internet lead is the next step to expanding that market.

We are presently in the process of figuring out how to add these leads to our system but are having issues. We work different counties that are spread across the southern half of Florida and the last thing I want to do is get in a couple of good internet leads only to sit on them for a few weeks for when we go back to that specific county.
 
The other thing you would be able to calculate is the amount of commission per 1000 mail pieces each group generates. That would be based on you closing ratio with each group and premium per case written. Does one significantly out perform the other.

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Dave, I have tweaked to death every age, income, and race scenario humanly possible on Direct Mailers using the good ole Generic "E64" lead in order to find that sweet spot of buyers and have failed miserably! lol

The one thing that I keep asking myself is, "how can my wife and I get in front of more buyers?"

What seems to work for us is using Direct Mail, targeting 50-80 yrs old and $0-$50,000 annual Income filters along with rotating Tele-market Lead companies in our areas.

Mixing in a dependable Internet lead is the next step to expanding that market.

We are presently in the process of figuring out how to add these leads to our system but are having issues. We work different counties that are spread across the southern half of Florida and the last thing I want to do is get in a couple of good internet leads only to sit on them for a few weeks for when we go back to that specific county.

Telemarket???? .:1wink:
 
Just a snapshot of first few weeks in biz:(10 apps)

70% of sales are Females

70% of sales are Smokers

80% of sales between 50-66

60% Preferred

40% Graded

Used mix of TM and DM. Jane leads did well.(Higher % of DI on these but higher ROI than DM)

DM was E-179 card. Horrible response rates.(.6) Fixed price leads the ONLY way for me looking forward. Might try the E-64 in my areas also.
 
I ran across a guy that got the highest return on the E64 I ever heard of. Nearly 10%.

He said he always gets 3.5. % but in one sweet spot there were only 1400 to mail and he got 137 leads.

Now that is sweet!
 
Just a snapshot of first few weeks in biz:(10 apps)

70% of sales are Females

70% of sales are Smokers

80% of sales between 50-66

60% Preferred

40% Graded

Used mix of TM and DM. Jane leads did well.(Higher % of DI on these but higher ROI than DM)

DM was E-179 card. Horrible response rates.(.6) Fixed price leads the ONLY way for me looking forward. Might try the E-64 in my areas also.

Too small sample to actually draw any conclusions but the 80% 50-66 surprises me. Would think that the age group that produces the most sales would be higher.
 
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