Direct Mail Vs Telemarketed Leads

Josh

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I've been having some discussions with folks about leads offline a bit and I thought I'd run it by you fine folks.

As I previously mentioned, I'm considering offering telemarketing service. I am going to be getting much more aggressive with telemarketing, the question is if I'm going to work with agents/agencies or if I'm just going to continue to keep everything in-house. This leads me to my question:

If you had a direct mail piece that was guaranteed to pull 1%, that would probably be a fair deal, right? Most folks seem to agree that it is. Based on a $400/1,000 cost that means each lead card is going to cost $40. They may or may not qualify on health, finances, or even actually be interested. Out of the 10 leads you'd have some that are junk off the top, so let's say you sit with half of them, that means you've paid $80 per appointment PLUS you had to actually call to set the appointments and work them. At this point I'd suspect you're saying "wait a minute, a guaranteed 1% doesn't sound like a good deal anymore." Right?

I think an intrinsic flaw in the notion of telemarketed leads (as I've said before) is the believe that they can be generated and sold on a per lead basis with some measure of quality control/filtering. All the time agents say "I won't pay for a lead unless I know..." then finish the sentence with whatever qualifications. In my experience and opinion, I don't believe that a telemarketers job is to do anything by find interest. Not to qualify, not to get banking information, not to do any of a list of a bunch of other things. They should find interest people, ask a few basic questions, and then pass the lead on. If you want a good telemarketer, you have to pay $10-$15/hour. No way around that. Recruiting telemarketers to a per appointment pay structure just doesn't work. Let's say it takes 3 hours to generate a good lead and the telemarketer was getting paid $10/hour. At anything less than $30/lead it's guaranteed the lead generation company would be losing money. I've had telemarketers call in areas where it was easy enough to generate a good FE lead in less than an hour, in other areas it can take all day and still not get anything. That, I believe, is the intrinsic flaw in the notion of paying per lead. No telemarketing company can predict the true cost of a quality lead so they can't sell it on a fixed price and be sustainable.

So back to my direct mail comparison, at a guaranteed 1% response rate on lead cards that means $40/lead card whether they have any interest, include their number, have money, qualify, are actually interested, etc. At the $40 price point per lead matching the quality of a direct mail card I think is much closer to being viable.

I know JD says that telemarketing doesn't work long term for FE, but if agents were paying in line with the way they were paying for direct mail leads, I think it could be viable. If agents want to keep sticking to paying per lead at unrealistically low prices expecting the leads to be waiting with the checkbook (being slightly facetious), I think we're going to keep seeing the same thing happen every time, which is that no FE lead company is coming through with anything reliable.

Your thoughts?
 
No telemarketing company can predict the true cost of a quality lead so they can't sell it on a fixed price and be sustainable.

Read more: Direct Mail Vs Telemarketed Leads

Unless you make close to half a million calls a day and look at the numbers. =) It's a numbers game, and the law of averages will guarantee sustainability at a $30 price point, easily, even $25 if you have enough telemarketing talent. For that, however, you need a few things. First, a major contract with brokerage firms that can spread you across the states, so you get the easy areas and the hard areas. Or, tons of clients and lots, but I mean lots of telemarketers. Make enough calls, get the data to build a model, and get the snowball rolling. Shoot me an e-mail if you have any interest in working some of our overflow. We currently outsource to some smaller companies that are not keeping up with the quality.
 
Unless you make close to half a million calls a day and look at the numbers. =) It's a numbers game, and the law of averages will guarantee sustainability at a $30 price point, easily, even $25 if you have enough telemarketing talent. For that, however, you need a few things. First, a major contract with brokerage firms that can spread you across the states, so you get the easy areas and the hard areas. Or, tons of clients and lots, but I mean lots of telemarketers. Make enough calls, get the data to build a model, and get the snowball rolling. Shoot me an e-mail if you have any interest in working some of our overflow. We currently outsource to some smaller companies that are not keeping up with the quality.


I'm not interested in that at all. I don't believe the numbers you're talking about are viable because of my experience working this market.
 
Unless you make close to half a million calls a day and look at the numbers. =) It's a numbers game, and the law of averages will guarantee sustainability at a $30 price point, easily, even $25 if you have enough telemarketing talent. For that, however, you need a few things. First, a major contract with brokerage firms that can spread you across the states, so you get the easy areas and the hard areas. Or, tons of clients and lots, but I mean lots of telemarketers. Make enough calls, get the data to build a model, and get the snowball rolling. Shoot me an e-mail if you have any interest in working some of our overflow. We currently outsource to some smaller companies that are not keeping up with the quality.

All this from a guy whose large company and experience advertises a gmail account for email....Makes me wonder who is shoveling the BS now.
 
I have two partners that use Gmail for their specific reasons.
One is a R.E. expert who does multiple seminars a month, sells packages and has done thousands of R.E. transactions personally. He uses Gmail due to his travel schedule and the services work well for him.

I have another producer in Texas that uses his Gmail account even though he the co-founder of an agency. He wrote over $85,000 in premium personally last month so obviously, his email address hasn't affected his business.

Some people just like Gmail services... or aren't technical enough to make a switch from an email address that they have been using for years... maybe they just don't want their agency snooping around in all their email addresses on a corporate server... there are multiple reasons to use Gmail instead of a corporate account.

I wouldn't hold that against someone too strictly. It's just something to notice and be aware of.
 
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I have two partners that use Gmail for their specific reasons.
One is a R.E. expert who does multiple seminars a month, sells packages and has done thousands of R.E. transactions personally. He uses Gmail due to his travel schedule and the services work well for him.

I have another producer in Texas that uses his Gmail account even though he the co-founder of an agency. He wrote over $85,000 in premium personally last month so obviously, his email address hasn't affected his business.

Some people just like Gmail services... or aren't technical enough to make a switch from an email address that they have been using for years... maybe they just don't want their agency snooping around in all their email addresses on a corporate server... there are multiple reasons to use Gmail instead of a corporate account.

I wouldn't hold that against someone too strictly. It's just something to notice and be aware of.

If this was a producer instead of a new troll looking for business on this site without spending time and contributing to the betterment of the producers of this site, maybe my responses might have been different.

You see my point, right.
 
I'm pointing out the obvious to most, but you can have your own domain email and still use Gmail to process your messages. So no excuse.

As for the leads, I think you're right however it might just be sticker shock for many agents. the problem may be keeping a price structure when response levels can be so different across the country.
 
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Tele leads work, and can work for $25-$30 per lead... the problem is that the lead companies crap on the small independent agents and take care of the lager IMO's- ....makes sense.. they place larger orders.. I get all that- but dont BS the small independent agent and take his money to produce other leads,, It's the whole rob Peter to pay Paul, and unfortunately it's the independent guy that places the small 15-20 leads a week or bi-monthly that usually ends up with his pants down.

Telemarketrs on hourly basis is no different from the scumbag DMH's out there that mailout half your order and blame it on the area.

I'd suspect they'd do the same thing with telemarketers on an hourly basis... I can see it now

"Hey, wheres my leads?.. I've paid you $400 and only got back 4 leads...."

I'd want accountability- but wouldnt put it pass most of them theives to fudge the reports

Naw.. not me.. If I'm going to pay a telemarketer by the hour.. I want to manage my dialer.. I want to know exactlly how long that persons been logged in, how many live pickups there were etc.....

Been boned to many times to trust any lead generating company.. They all start off all smelling rosy but after about 6 months they'll smell like sh*t
 
In Central Florida I'm being told the mailers aren't even pulling 1% The guy has used all kinds over a years time. Before the economy dumped here he was getting 1.5% on average. Last month he stopped but he was mailing 2000 pieces per week. Forgot to ask him who he was using.
 
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