Insurance Agent Forum

[Markingriffin]

[COLOR=black]Free Leads and Lower Commissions?? HMM[/COLOR]

I’m going to try and keep this simple as I can.

50% Commissions and Free Leads
75% Commissions and leads only cost $15
85% Commissions and leads only cost $25

More is More and Less is Less.


The lead is worth, let’s give it an value of “ x “
You can fight over what the value of “ x “ is all day long. You decide what the value of “x “ should be.

The bottom line is, you should never give up more money in commission then what “ x “ is worth.

Example let’s say that “x “ = $30 bucks. Lets say that you can get a good lead for $30.

Let’s use an avg monthly premium of $50.

Agent #1. Has 100% commissions and no free leads. He makes $600 in commissions.
Agent #2 Has 50% commissions and makes $300 and gives up $300 in commissions

Agent # 2 just gave up $300 for the value of “x “ which is $30 in this example.
If the value of “x” is anything greater then $300 the agent is foolish.

Agent # 2 gave up $300 to save $30. Even if you say a good lead would cost $200 a lead, he is still giving up $300 for $200 lead.

Now I would give up anything less then $30 in commissions to save $30.

You need to always sit down and see how much you are losing to take lesser commission for leads.

Some IMO’s even charge you for the lead and give you lesser commissions.

Let me show you how this works.

The IMO goes and makes a deal with a lead company and gets the lead on avg for $10 to $15 bucks. Next the IMO charges the agent what he has in the lead and breaks even or more then what he paid for it and made a profit. Let’s not forget he is also cutting your commission. So the IMO is out of nothing and making more money.

But I can’t find good leads, and they help me find them. Hmmm.
If you are losing $300 a sale, hmm. Could you find at least 1 lead for $300 bucks to break even? Could you find a lead for much less then $300??

Let’s say a good lead cost $50 bucks. On just 1 case the agent could buy six $50 leads. I would think that a $50 lead would be a good lead. The agent could have 6 good leads for what he gave up in commissions on just one lead.

NEVER GIVE UP MORE TO MAKE LESS.

You decide whatever you think the value of “ x “ should be and never give up more then that for leads.

[myinsurebiz]

Originally Posted by Markingriffin

[COLOR=black][/COLOR]I would think that a $50 lead would be a good lead.

Yea they are.

Want some - LOL . . .

Tom

[YouGotMyMoney]

In your example, you are assuming a 100% close ratio.

For every $30 lead bought, you placing a case.

That's not realistic.

Let's say you close 1:5, with an average premium of $50 a month, with a 100% contract that's a COA of $150 to gain a client, and an ROI after paying for the leads of 3:1, a 300% profit.

Now if you close 1:5 with those "free leads", no COA, cause they are free leads, and your commish is going to be $300.00.....hmmmm......the same comp at the end of the day.

[stormtracker]

The heirarchy ought to be glad there are any agents that will pay for the leads, given the fact that said agency will probably wind up keeping all the renewals plus their part of the commissions. Sounds like an unfair labor practice in the union world...

[insuranceexec]

The agent is giving up a lot more than $300.

I will not even begin to go into the cluster of numbers that you have thrown out there, but will say this:

Who is working on a 85% contract?

[moonlightandmargaritas]

Originally Posted by insuranceexec

I will not even begin to go into the cluster of numbers that you have thrown out there

Gives me a headache just lookin' at it...

[magagent]

When I first got into this business, I could either work on a .70% life insurance contract with leads provided, or a .60% with preset appointments. Since I was young, I am sure you can figure out what deal I took.

Fast Forward, life at .115% life insurance contracts and I am in charge of my own marketing is much better...