Thinking of Starting a Lead Company

[jaugusta]

Now before when I sold, I hated leads, the cost of them, never having enough, and now that I am back in the business I am feeling the same way. Before I started my own direct marketing campagne so save money on leads. I was thinking about doing that again since it didnt work out that bad, but then I started thinking that everybody hates leads and has horror stories about their companies they get leads from.
So I was thinking, im an honest guy, I wouldnt do these people wrong like these companies seem to always do, why cant I generate leads on a larger scale and sell them at a fair price, and if I do people right they will do me right by purchasing more and more. So in my mind it loos like a win win for everybody if I could do this.
So here is the problem, im not sure how to do it on a large scale at a cost efficient way.
I was thinking using a direct mailer company to generate the leads based on what people want, then process them from there. Im not sure if thats how this works though.
This is just a thought that has the gears turning a little bit so if anybody has any suggestions then please and thank you
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Let me expand on this by asking, what would you like in a lead company. What problems do you have with your current company that you would want to see different in a new start up company if you were going to consider it. My gears are turning on this today so any thought you can give me would be more then appreciated.
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Again another question. Would people like to order say, 1000 direct letters sent to a targeted demographic with either a template or their own wording for a flat rate and all the leads generated from that be their own "exclusive leads"? The leads could either be scanned and emailed to the agent or have their address on it so that it came straight to them which ensures the exclusivness of the lead and the knowledge that it is a TRUE hot lead.

 

[craigthinks]

I was thinking the same thing. I would like a lead company to ....

The #1 thing is for both the insurance agent and lead source to make a profit.

Do not lie to the leads
like Benepath site, get instant quotes online, when they click... An agent will be calling you.

Or most others in small print in a hard to read color, 5-10 agents will be calling you.

Or save 30%-50% off health insurance or other as if there are some specials at Kmart on insurance.

Don't send leads to ehealth insurance, selectaquote or other large online to compete with the local agent.

Good refund policy. If the phone does not work, refund. If asking for the impossible, refund. I bought a few leads last month one lead for life insurance with major health problems wanted a life insurance so when he dies, his wife with have a $250K retirement plan. Did not want anything lower than $250K. Insuranceleads dot com thought that was a good lead. I don’t even think I could get a FE on the person.

Connect to CRM's & quote engines.

 

[lmspeir]

It seems to me that the problem with the whole concept is that what motivates the lead company is not what motivates the agent.

The agent is looking to get a deal on a good lead. He wants to maximize his ROI by getting a great lead unique to him at the lowest possible cost. And, rightfully so, the lead company wants to maximize their return on producing the lead by getting the most revenue possible.

Where is the middle ground? Isn't there a way for the lead company to provide a lead to a single agent at a fair price so that both make money on the deal? The lead company should know what it costs them to produce a quality lead. Apply their needed ROI to the cost and wouldn't that be a fair price for a unique lead? Of course, this means the quality lead is going to cost the agent more, but most people would understand the value proposition.

I think this sort of synergy would make more sense than the adversarial nature of the transactions today.
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[YouGotMyMoney]

Isn't there a way for the lead company to provide a lead to a single agent at a fair price so that both make money on the deal?

Well, let me break down a few things for you if you didn't already know:

Most affiliates get $5-7 per net lead. Meaning just because someone fills out a quote request, doesn't mean the affiliate get's paid. Sometimes the lead vendor already has the lead, so you're not gonna get credit.

So let's say 60% of the leads you send to ABC leads, whom all complete a quote request form are accepted by the vendor, you are really only getting $3.00 to $4.20 per lead.

I'm sure you can understand (even if you don't like it) why affiliates will submit the lead to 3-4 vendors, so they make $12 to $16 per net lead.

With that being said, if you wanted a legit exclusive internet lead, meaning an SEO lead....consumer went your a site , filled out a form, and this wasn't a lead purchased from netquote and sold to you an exclusive lead, then I'd say $25 would be the price point or around there.

 

[Pangaea]

Well, let me break down a few things for you if you didn't already know:

Most affiliates get $5-7 per net lead. Meaning just because someone fills out a quote request, doesn't mean the affiliate get's paid. Sometimes the lead vendor already has the lead, so you're not gonna get credit. [note 2]

So let's say 60% of the leads you send to ABC leads, whom all complete a quote request form are accepted by the vendor, you are really only getting $3.00 to $4.20 per lead.[note 2]

I'm sure you can understand (even if you don't like it) why affiliates will submit the lead to 3-4 vendors, so they make $12 to $16 per net lead. [note 1]

With that being said, if you wanted a legit exclusive internet lead, meaning an SEO lead....consumer went your a site , filled out a form, and this wasn't a lead purchased from netquote and sold to you an exclusive lead, then I'd say $25 would be the price point or around there. [note 3]

No offense, but you're very wrong about how things work.

1. Affiliates don't submit leads, an affiliate drives traffic to a predetermined lander and gets paid on that traffic's conversion -- per conversion (cost per action). You're confusing the roles of affiliate with lead vendor. Vendors sell the leads, affiliates never see the information of who's applying.

2. That's not how lead scrubbing works. Leads are scrubbed based on the accuracy, frequency, and lead source to make sure that the leads meet the advertiser's TOS (terms of service). Not "If a vendor already has a lead".

Plus NO AFFILIATE would work with a vendor if 40% of their conversions were thrown out (we call it scrubbing). If an network or advertiser scrubs over 10% it would be considered a lot... If the traffic source was legit and the pixel fires.

Also, affiliates that drive in high numbers demand higher payouts. I have one insurance company paying me $30.00 per conversion -- 2insure4less $10 per conversion...

3. A "legit" internet lead does NOT mean an "SEO" lead. Any non-incentivized lead from a traffic source allowed by the advertiser is a "legit" lead. It's only considered exclusive to the vendor if they don't sell it more than once...

I apologize if I sound like a wise butt, I just make most of my money in CPA marketing and wanted to clarify things.

 

[jaugusta]

ok, so any comments on what i posted in the start?

 

[Crabcake Johnny]

I'll comment. If you have an idea that you think is do-able and you have a capital necessary to take the risk and you really believe in your idea then go for it.

 

[jaugusta]

Thanks. Well im trying to get an idea of how to go about it. Such as like I stated earlier, would people be interested in a direct mail drop of 1000 targeted mailings at a time with a return address that took the lead directly to their office so they can be sure that it is guaranteed exclusive? What would be a fair price for that service?Im not interested in making a million bucks, I just wanna do an honest service that provides quality to the agents and through offering quality then I would be able to do better then the others.

 

[Crabcake Johnny]

I believe NAA has a working model of selling mailer leads. If memory serves, they charge their agents around $20 for an exclusive mail generated lead, however they get extra revenue selling it as an aged lead.

The basic math will give you a starting point and your value would be some kind of mailer that returns "good" leads. Start with a 2% response rate and 60 cents per mailer and 1,000 mailers costs $600 and returns 20 leads at a cost of $30 per lead.

Since $30 per lead (your cost) doesn't seem do-able that means either your cost per mailer has to be less than 60 cents or your return needs to be more like 5%.

Something else you have to decide is which line to target. Although an agent selling med supps might not pay over $30 for an exclusive mailer lead, an agent selling annuities might.

 

[dfrench]

I did the same thing as you are thinking about. After I sold for a while in I got fed up with the same things in leads, so I started my own lead company. I think coming from an agents perspective you get the lead business a lot more. Sure I still need a good ROI, but I work with nothing but exclusive leads, driven by SEO at a fair price. I refund for bad numbers, un-insurable, etc. It is fair to me and my agents I work with. If you do it, and do it fair, it can be a real win win situation.