I have been toying with the idea of starting a small lead generation service. I do a large volume of marketing in multiple industries and joined this forum to do research for a new insurance agent in florida. Oddly enough. I ended up with a continuing insurance education client as well. After meeting several other sources for leads when it comes to internet I realized how crappy public sources are. The thing is, it is just to profitable to sell leads to multiple people than just to one.
So I might have come up with a middle ground. I am thinking about starting to spend a lot more money on PPC marketing insurance leads, but would like to have about 10 buyers for those leads. If anyone is interested in being a part of this you are welcome to contact me via P.M. I will explain my qualifications.
Or is 10 just to much. The thing is I won't work with a client unless they can make money off of my services. I would like to provide leads to the perfect number of agents where they all can make money (obviously some will make more than others) and I make a good amount of money two. Here is what I am thinking in my head. If I can generate real, quality leads for $15-$20 a piece. I mean the kind of lead that get distributed within 2 minutes of a real person filling it out, and an agent stands to make $500 over the next 3 years off of that lead, at what price could I sell that lead to 10 people and have it so I can make a great return and they are still happy with theirs. You input would be much appreciated. Please no jokes as to saying just one person for $5. Suggestions on number of agents and price per lead combo's would be very helpful.
This is all good conversation. I know an agency that uses direct mail only. They send out about 5,000-10,000 mailers per month for P&C and achieve some great results. I watch them consistently put $40,000 per month in premium on the books (one agent). I can't figure out how they are achieving these results from direct mail alone.
I think the secret to their success is the quality of the mailing list. These mailers are being sent to the right people. I would estimate that the average cost is about $2,800 per month. Assuming an average 16% commission = $6,400. Not bad when renewals start coming in. Does anyone else know someone who is putting up that kind of revenue with only 5-10,000 mailers?
Only problem there is that they are only doing $3600 Net and if there is a chargeback it can get ugly quickly. I hope they are adding other products to the mix and are not only relying on those deals.
Mickey Mouse SEO, you are over-thinking this. Your only concern from the agent position is this. Will the agent generate a decent ROI to keep them coming back for more?
If I can make 5:1 at a minimum, I might be in. 8:1 almost guarantees I will.
$20 a lead sold to 10 agents is BS. There are vendors out there selling "exclusive" leads for that much.
Projecting a 3 yr income stream based on 1 sale, then factoring in referrals or multiple sales to one lead is a pipedream. Most agents will be lucky if they get 1 sale off 1 lead.
If you want to sell leads you need to work it from your side, not ours and then decide if it is worth it.
Most of the experienced guys here no longer buy leads, so your market will mostly be those starting out. They won't shell out $20 for a shared lead when they can get them for half that or better from other sources. If they do pay you that price, they won't be paying it for long.
It's always good to see a old thread hijacked and resurrected
Orlando - 10 agents a lead is unsustainable. 4 to 5 agents is reasonable. You will find it is very hard to make the numbers work for everyone, the PPC costs will kill you if you are not careful. The lack of agents buying them will kill you if you overprice them. I can buy health leads shared with 4-5 agents for under $10 easily. You would need a compelling story to make me pay anymore. Define quality.... how do you know your lead is better than the netquote lead or the vimo lead?
GAHealth - P&C chargebacks are not the same issue they are in health. That's why this type of system works out okay for P&C, but in the end, you do it for the second year commissions, you MIGHT break even the first year. I know, I've done these mailings. Of course, in P&C, the whole business is based on renewals, unlike life and health, where renewals are a sweetener, but not the real money.
Thanks for the feedback guy's. So to recap the feedback:
5 agents, around $10/lead? lets us use homeowners insurance as an example.
The whole point of this service would be to find the happy median of our profitability and those buying the leads. I would like to see an agent's ROI at somewhere around 5.5:1 To do that with a group of agents is more of a trial and error working it our. Than anything else.
....I would like to see an agent's ROI at somewhere around 5.5:1.....
How would you measure this? Even the basics:
5 agents / 10 a lead, $150 avg commission per sale for homeowners.
Figure half the leads cannot be contacted, don't buy anything, whatever.
Also, figure each of the 5 agents sell an even amount (just for numbers sake). This means one lead out of 2 is sold, or, for each agent, one lead out of 10 is sold.
At $10 each, I'm spending $100 to hopefully earn $150. That is, at best, an ROI of 1.5:1, not counting any other expenses of working the leads.
Now, put real numbers in this, meaning only 50% can ever be contacted and only 50% of those ever actually buy (25% buy something from someone that the lead was sold to), the ROI is upside down.
This is why I don't work many P&C internet leads. The numbers really don't make sense for the agent. The only way you can come close is by making sure you can get credits for anything that isn't 100% a true lead.
By the way, health and life numbers work out different (not necessarily better, just different), but P&C is a brutal business.
Dan, health is brutal too, but in a different way. You can write HO or renters insurance on anyone, but people have to qualify for health insurance.
And I run into the same thing you indicated. Half will never answer the phone or give you bogus contact info.
Most of my leads now come from my site yet the numbers don't change.
At least half, probably more can never be contacted. Half of those who are contacted are either broke or can't qualify medically. So I am left with 2- 3 out of 10 leads who are viable prospects, can qualify medically, and have the money.
Even then I get folks like a lady earlier this week who was looking to replace coverage through her husbands job. Their premium was increasing from $220 to $280 per month for a plan with $20 copays and a "big" deductible of $1000. Best I could offer was $600/mo for something similar. She thought I was lying because she KNEW there were better plans out there for less than they were paying.
I asked her to call me back when she finds them so I can offer them to others as well.
You know, I never do get callbacks on those mystery plans.
How & where do you get these lists for the senior market & what company's products or organizations do you suggest I get started in for this market?
Jason
Originally Posted by Frank Stastny
The main reason is they don't exist.
Some are better than others for a while but that can fluctuate dramatically and does. There are companies that are a total rip-off and others that may be sorta kinda okay most of the time.
Although I can't back this up with stats, my guess would be that a new lead company may have decent leads for a while. As more and more agents sign up with the company the demand for "leads" will increase. It that increase in demand that will usually cause their leads to go from good to poor to just plain crappy.
I believe a lot depends on what kind of leads the agent is looking for and the type of lead the company is offering. Direct Mail is the worst. Internet leads use to be pretty good, I used them a lot about five years ago with acceptable success. Telemarketed leads can be super or pure crap. They are when the telemarketer works for agent and the agent does the training. (I wouldn't pay a nickle for telemarketed appointments unless the person setting the appointments is my employee.)
There are only so many people in a given area who may express an interest or be curious about a particular insurance product at any given time. The more agents that company has who are interested in contacting those people the less valuable that lead is going to become. The agents who will have the greatest success with shared leads are the ones who are sitting at their desk with their finger already on the telephone key pad when they receive the lead.
Lead companies will sell the same lead to a number of agents. Some companies will claim only to sell to five agents, others will make the same claim but sell them to fifty agents. Truly exclusive leads, where only one agent is given the lead, not five, ten or fifteen agents, are almost not existent.
Remember, lead companies are in business to make as much money from each lead as they possibly can. This does not work in the agent's favor.
I work the senior market and over the past fifteen years I have tried everything, twice. The one single method that enables me to write more apps with a minimum amount of time invested is for me to do my own telemarketing from a list. It is quite easy compared to telemarketing for other insurance products
How & where do you get these lists for the senior market & what company's products or organizations do you suggest I get started in for this market?
Jason
I get my lists from Lead Concepts, leadconcepts.com. However, there are a number of companies that sell lists. The last time I checked their price was $95.
You may also want to check with USADATA, 877-616-6242. I recommend you give them a call and actually talk to them. Their lists I believe start at $.035 per name with a $50 minimum order.
I can also help you get contracted with Med Supp companies if you are interested. I offer better contracts than most and also can provide you with training to sell Med Supps.
------------------------------------
Medicare Supplement Sales Training and Coaching.
"The Perfect Contact Management Program (CMP) for the Insurance Professional" www.YourInsuranceOffice.com
877.633.0808
Of course...there's more to the equation. You CAN NOT EVER use affiliates. YOU MUST tell us your search terms. You must show us your landing pages.
Come on now chumps, you know as well as I do that the search terms are the golden goose of PPC. I would be happy to show you landing pages, but I would destroy myself if I gave everyone my ppc list. It is expensive to create a profitable PPC list in the insurance market. I would be willing to offer this for several months as a forum exclusive. Anyone interested in trying this out PM me and we will work out the details. Here is what you will be working with if you sign on.
Direct contact via phone... what you can call me? My guarantee that leads will not be resold to lead companies or anyone outside of this arrangement. If I do decide I am giving away to cheap all members of lead generation will be notified prior to any additions. All members will also be told exactly how many other agenys are receiving these leads. I will actively work with the agents to make sure leads are the highest quality. (this may mean prices go up as quality goes up) I don't think you guys have a problem with that. PM if interested. I would be happy to offer this as a forum exclusive.
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Originally Posted by djs
How would you measure this? Even the basics:
5 agents / 10 a lead, $150 avg commission per sale for homeowners.
Figure half the leads cannot be contacted, don't buy anything, whatever.
Also, figure each of the 5 agents sell an even amount (just for numbers sake). This means one lead out of 2 is sold, or, for each agent, one lead out of 10 is sold.
At $10 each, I'm spending $100 to hopefully earn $150. That is, at best, an ROI of 1.5:1, not counting any other expenses of working the leads.
Now, put real numbers in this, meaning only 50% can ever be contacted and only 50% of those ever actually buy (25% buy something from someone that the lead was sold to), the ROI is upside down.
This is why I don't work many P&C internet leads. The numbers really don't make sense for the agent. The only way you can come close is by making sure you can get credits for anything that isn't 100% a true lead.
By the way, health and life numbers work out different (not necessarily better, just different), but P&C is a brutal business.
Dan
Here is what will end up happening..........
These leads are all derived from ppc marketing (ultra targetted) sent out when a person fills a form. This is not the type of leads where you get someone who filled out a cruise card 8 months ago. Not everyone will close an equal amount because one or two providers will be better than the others, or have better pricing. The others will give up, I will increase the cost to the two or three providers who are making money and enjoy the ease and quality of the leads. Remember, I am selling hot leads. I could provide your business with only a 2.5:1 return on marketing, but at a scale that was higher, and the it was easier on you to sell. You would'nt be satisfied? I would rather take 100 sales at 2.5 to one than 20 sales at 4:1 any day. Just my thoughts.
Besides, this is simply an experiment. I am looking more for partners to market than simply credit card number in a database that I charge. The last thing I want is the type of client that calls me every time a lead did not turn out. These will be quality. No padding the numbers with garbage. Will their be a bad lead... Of course (once in a while). You have my promise that I will continually work to improve the quality of the leads. Someone take the plunge and see what happens.
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Almost forget,
No affiliate stuff. All leads would be generated directly.
Last edited by OrlandoSEO : 11-05-2009 at 07:47 AM.
Reason: Posts merged
I would be happy to show you that as soon as I make them. The only place we are currently generating insurance leads one of my clients websites. We didn't create the website, we are just marketing for them. Not a particularly amazingly converting lead page either.
This would be a from scratch project. The reason I am even considering it is that we do not come from a lead generation background. We go customer by customer. The one I have started his independent agency a year ago and while doing well, is still suffering from the short term cash constraints of a business start up. AKA he does not have a $5000 per month budget to produce large amount of leads from PPC and it is not worth our time to setup and manage anything under a $2,000 per month spend. I am not building these pages unless I have the interested parties. most likely I will go with something like these. I would have to skip the fake testimonials of course. New laws coming up soon and all. If I used the bottom one, I would actually sell the live chat and phone option separately and charge per live chat. The reason being is that many people just want to talk to a human and not fill a form. Let me know what you would be interested in paying per call or per chat guys
Last edited by OrlandoSEO : 11-06-2009 at 08:44 AM.
Re: Lead Service - Shhhhh, Top Secret!!!
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