Don’t Lower Your Commissions for Leads

[Mark]

Let me show you what I mean.

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

Free Leads and Lower Commissions ?? HMM

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

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 companies 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.

A lot of agent that try this also end up owning the imo for crappy leads and then you get on vector.

 

[bluemarlin08]

Re: Don’t Lower Your Commissions for Leads.

Its really about the return on investment. One guy may be on a 50% plan but have a higher close ratio. When I bought leads I looked for a 6 to 7 to 1 return on my investment. The problem for many is they are hooked on the leads and never learn to develop their own. I know guys that leads are like crack to an addict.

 

[DS4]

Re: Don’t Lower Your Commissions for Leads.

It's all about the quality of the leads. I have NEVER seen a lead program that supplied quality leads. The leads were either stale, already called/sold, didn't remember requesting info, or, the lead was not insurable.

You will always do better generating your own leads.

 

[YouGotMyMoney]

Re: Don’t Lower Your Commissions for Leads.

I know of an agency that pays they're agents about 15% commission and has them on a web dialer dialing netquote-quality leads for individual health.

If they would telemarket or call aged leads they would :

1. Make more money.

* Higher commission level.

* Actually generate more clients.

* Not have to look over they're commission statements with a fine tooth comb...

2. Have a better outlook and a more positive attitude.

 

[sshafran]

Re: Don’t Lower Your Commissions for Leads.

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.

 

[1manshow]

Re: Don’t Lower Your Commissions for Leads.

You will always do better generating your own leads.

Ditto that

 

[Crabcake Johnny]

Re: Don’t Lower Your Commissions for Leads.

These arrangements are traps. If you're writing a lot of business then you're taking a bath. Between 15% and 20% writing 10K per week you're giving up $2,000 a month in comp.

If you're not writing a lot of business you'll find that those leads dry up or you can't write business off the leads they sent. Now you're spending your own money and trapped on a lower comp.

 

[Frank Stastny]

Re: Don’t Lower Your Commissions for Leads.

It's all about the quality of the leads. I have NEVER seen a lead program that supplied quality leads. The leads were either stale, already called/sold, didn't remember requesting info, or, the lead was not insurable.

You will always do better generating your own leads.

The reason neither you nor I have ever seen them is that they are like Leprechauns and the "pot of gold", they don't exist.

Selling insurance is work. The work part is prospecting, that's why agents are always looking for a Leprechaun to lead them to the "pot of gold". They only want to do the "fun" part of selling insurance which is filling out the app and getting paid. The problem with this business is that there are too many "Leprechauns" making promises they know they can't fulfill.

Give a man a lead and he may sell a policy, teach him to prospect and he will never lack for someone to sell to. Or something like that.

 

[DS4]

Re: Don’t Lower Your Commissions for Leads.

The reason neither you nor I have ever seen them is that they are like Leprechauns and the "pot of gold", they don't exist.

Selling insurance is work. The work part is prospecting, that's why agents are always looking for a Leprechaun to lead them to the "pot of gold". They only want to do the "fun" part of selling insurance which is filling out the app and getting paid. The problem with this business is that there are too many "Leprechauns" making promises they know they can't fulfill.

Give a man a lead and he may sell a policy, teach him to prospect and he will never lack for someone to sell to. Or something like that.

Very good words of wisdom grasshopper. You have snatched the pebble from my hand.

 

[Frank Stastny]

Re: Don’t Lower Your Commissions for Leads.

Very good words of wisdom grasshopper. You have snatched the pebble from my hand.

Does that mean that I now have to pick up that red hot pot and burn dragons in my arms?

I use "old school" methods because they still work the best. Let the young guys knock themselves out making the lead companies rich. I'll generate my own and be happy with damn near 100% return on my investment. Plus, I don't have to sell nearly as many policies as they do to make more money than they are.

I've never been very good at math so those are numbers I can easily keep track of.