Online Insurance and Leads

[colejustin]

Hi,

There is one question I've been seeking an answer to for awhile. At the time I was selling insurance I never purchased leads from lead services since I was able to generate them from a website. I no longer sell insurance but still work on the marketing end. What are the common drawbacks agents have experienced with buying leads online. Is it mainly the fact that most leads are shared? Is it the quality of the lead or the conversion rate?

Cole Sileven
Low Insurance and Security
P.O Bx 90234
Tucson, Az 85752
http://www.low-insurance.org

[sau]

All 3. The leads are often times shared. The quality can be horrendous at times and the conversion rate can be qquite low. If you have a solution, let us know.

[laidback]

Interesting question. I agree, all three. Many times the leads are agent shared, sometimes they are too late from the original contact date and many others have been "shoppers" especially in the P&C market. Many of the lead companies that contact me, I have told them to send me 5 or 10 of their leads and lets see if they are any good. If they want my business, they need to provide timely, qualified leads for the prices they want to charge.

[SteveAnderson]

Purchasing online insurance leads is working for some agencies, but only because they have a marketing system in place to manage the follow up process. Here are a few thoughts to help you begin strategizing about how you can develop a marketing program or enhance your existing programs.

Measure everything: Wasteful marketing can be a real drain on an agencies budget. Before you start any type of marketing, set up a way to measure the success, or failure, of each marketing strategy and tactic.

Have a good lead generation system: Never in the history of marketing as there been so many ways to attract customers to a website, or store front. The trick is to sort through the clutter to find what works for your agency and your customers. By knowing your customers, you’ll know exactly in which medium your agency should use to attract new consumers.

Know your customers: a successful marketing system isn't just about attracting new business. In fact, retention and account rounding can pay much bigger dividends to the bottom line than just concentrating on new business. Knowing what policies your customers have, and don't have, with you allows you to create a marketing process to get that business.

Create a follow up system: The biggest reason agents don't write more businesses they simply don't follow up. If agencies fixed this one thing in their marketing process they will automatically increase the number of new clients they obtain.

[volstrike3]

Steve makes some very good points. Your system to responding to the leads is critical. I have tried purchasing leads two separate times. The first time I was not prepared. I was somewhat new to personal lines, I didn't have a comparative rater, auto responders, great market access, etc. The hit ratio was 10-15% and I gave up after 90 days. I took about a year off only doing commercial lines before bringing in somebody with a PL background that has had some success online marketing. My current effort involves purchasing leads, linking that info directly to the online rater on my website (I have CPLive from EZlynx) and an auto responder with email follow ups going out immediately when I get the lead, the following day (after they have received the quotes), three days later, 7 days, 14 days and a final plea 21 days. I use Agency IQ for that. Getting the quote to them almost immediately is helpful and puts you ahead of the other agents. They are getting flooded with calls from 5/6 direct writers asking for more info but since you have sent them the prelim quote... you are more likely to get a response. We have a lot of people that don't respond immediately but do respond to our emails 14 or 21 days later. People are very busy so you have to stay on top of them.

You need to have very competitive companies. Travelers, Kemper, Mercury, Metlife, Oregon Mutual and Commerce West are very, very competitive in my area for auto. Online shoppers are looking for a good rate and having a low price will get them to take or return your phone calls... at which time you can start building a relationship and turning them into a true customer (by rounding the account out with multiple lines, increasing limits, etc).

You can grow through online leads but you need to be realistic. It is not a warm lead. 30% of the people are just not going to respond. With those prospects you need to be very aggressive in asking for lead credits to decrease your costs and increase your ROI. It seems like the lead companies allow you t oclaim 10-15% of your leads as lead creddits before they start rejecting your requests. They filled out the info online in the middle of the night because they are insomniacs but could care less about auto insurance the next morning and are turned off by the barrage of phone calls and emails they receive. Another 20-30% want to save money but are too lazy to follow through with anything. If you can convert half of the 40-50% of the leads that are seriously shopping then you are int good shape.

Also, online lead companies are hurting and they are willing to deal. I have gotten leads in certain zip codes for $3 per lead. If you are getting 100 leads a month for $300-400 and converting 25%... you can be profitable.

Have a retention plan in place and write only annual auto policies that are ACH. Our agency management system links to our comparative rater so we reqote every account 60 days out from their renewal. Even hardcore price shoppers are comfortable with not shopping if you are showing them your work and they know you are looking out for them. When they get the email link to EZlynx quote with 12/15 companies quotes on there... they know you are earning your money. Why would they want to deal with a bunch of agents again if they know you are working hard for them?

[colejustin]

I really enjoy all the input everyone had on this subject. One thing I did learn about online leads is the importance of a quick response from the Agent once the quote is received. I like how volstrike3 mentioned how these leads are not warm leads; cuz it's true, these leads are not one of your current customer's cousin or sister. However online leads can be converted into customers but it's all about a fast response and a good reason for them to trust in your service. Depending on the customer, online leads grow cold very quickly. You should always call the lead before entering the lead info into the quote system. Keep them warm.

At this time I'm working on website system where auto insurance shoppers have the choice to getting an online quote, or a quote from a local agent. I found that plenty of shoppers do like having a local Agent they can turn to and that's what we want to offer with this system. How it works is, when the shopper on the site chooses to get a local quote they are given the opportunity to pick a specific agent in their area. So with this system, the selected Agent receives an exclusive quote request once the customer finishes the quote and presses submit. The request is sent directly to the Agent by email once submitted.

Instead of buying shared leads or buying leads in general, the Agent gets listed as an option in their city for an annual membership fee. Currently I have it set up for free memberships and paid membership listings. I would like to soon send a press release on insurancejournal introducing this system but first wanted to get some input to make sure I'm on the right track. Anyone who may want to learn more about it can visit the 'agency services' link on our front page.

Cole Sileven
Low Insurance and Security
P.O Bx 90234
Tucson, Az 85752
http://www.low-insurance.org

[DerekG]

A few things I wanted to add. I am a relatively new agent coming from a career in the IT industry. Naturally I turned to online leads to get me going fast. Went through 4 of the top companies very quickly as it did not work for me.
For starters I did not use one company because of the contract. There was no recourse if the lead was unreachable, or any other irregularity. The quality of the leads in all cases was questionable as I endeavored to speak to the prospect and some seemed to be unaware of the lead or denied ever requesting any quote online. In one case with a homeowner lead, the place had been sold 2 month prior. Another issue for me is that I am in Florida, a no-fault state. Here a person can be insured with just PIP (no-fault coverage) and PD. That is mandatory minimum coverage. It seems the lead producers do not take that into account so the leads always came with BI, UM coverage. They were classified as premium leads (at a premium price) when in fact the prospect only needed the mandatory coverage. Finally, I noticed that most prospects have no understanding of split limits, BI, UM, or any of the things agents take for granted. They understand terms like 'full coverage', 'state minimums' or 'mandatory coverage'. There is no place to enter those terms on the data collection sites of the lead producers. As a result they select something which is then passed to the agent as gospel. Hope this helps.

[d's insurance store]

There is a perception that the purchase of a web generated lead, will in fact, a majority of the time, lead to an constructive conversation about insurance coverage and rates, and that a close ratio will mimic what an agency producer sees as an average for organically produced inquiries. This perception further purports that in return for a certain amount of money paid per lead, that the quality of those leads will show value and profit for the buyer, and that although not every contact will end in a sale, there will be enough sales and revenue generated to prove profitable.

Lead companies will further put forth the premise that those not succeeding with using purchased leads are lazy and untalented, not calling immediately upon receipt of the lead, not following up or not having the sales skills to move the process along to a close.

Agents or producers spending their money for these leads, without prior experience working paid leads, or desparate for immediate results seem astonished that the reality differs from the perceived, and that promises of high quality from one lead vendor to the next often don't deliver and that many leads, once received, usually don't even lead to any sort of contact, let alone a sale.

I offer my conclusions based on my own experiences, having spent thousands of dollars on leads, each time hoping the outcome will differ from the prior, wanting to believe the phone sales people from the lead companies and relying on their promises of making good what I consider to be 'bad' leads. I've been there and done that, and my conclusion is that for the most part, especially in high population and web savvy areas, is that the vast majority of paid leads are garbage and a waste of money and time. There may well have been a place and time when internet generated leads for P&C actually produced a high percentage of contacts and a fair chance of making a certain number of sales. But I velieve that time has long past.

I understand the mindset of not having the phone ring and feeling that somewhere out there is a place where only those really interested in a quote conversation fill out those lead forms and none of them are named Mickey Mouse or have email addresses of fake@email.com, but sadly, I have concluded no such place exists.

Trying to superimpose a list of reasons for this disconnect from reality is a waste of time. And judging from the numbers of solicitations for deals from lead companies that cross my email, many others are coming to the same conclusions as I.

I would welcome stories of success...

[michga11]

i see that our mod is modding. good job, joshy.

also, apparently the poster above is a possible halfy spammy. it's like he doesn't know anything about insurance, and then BAM, he pulls something off the internets, written by someone else, and posts it as his own, as if he like is in the KNOW. heh.

[michga11]

hey mod. you should at least be deleting the spam too. or is it just me? am i that special? i think i am. thanks for thinking so too, pal.

[Josh]

Thanks michg11,

I've removed Alex's post.

Copying articles from another site and posting them here as your own is not acceptable.

[michga11]

i got your back, buddy. i hate spam. especially when there are so many typos. drives me crazy.

[Pathway]

Our agency has been purchasing Internet leads off and on for years. Here's the problem that I have found with some lead companies:

Some companies use third-party websites where people can have the chance to win prizes if they ask for an insurance quote. The problem with this type of lead is the prospect is barely interested. Lower mybill.com is one such website that provides leads to some of the top players lead providers in the business.

The quality of those leads are horrendous. I have found only two companies that will reimburse you for leads purchased when they were induced to ask for an insurance quote: Insureme.com and quotewizzard.com

The only way that an agency can be truly successful when purchasing Internet leads that are being shared with four to eight other agents is when you have absolutely the lowest prices on insurance in your area, and a willingness (or a sales staff) to follow up on all those leads up until 9 p.m. in the evening!

I personally am working on search engine optimization and generating organic leads from our website, we are having some success but it's a slow process. Additionally we have a sophisticated follow-up system that we use to follow-up with prospects automatically. (It's not for sale, it's not a subtle plug for some excessively expensive marketing company.)

Using autoresponders in key selling messages being delivered to prospects automatically until they to tell us to jump in the lake is instrumental to our selling success. (It's working very well- last week I closed a deal on an account that no one in my office has spoke with for two years, but they have been on our drip-mail newsletter since we obtain the lead.

Jack Thomas
http://www.pathwayinsurance.net

[d's insurance store]

In my continuing journey to learn all I can about web marketing, and my willingness to allow myself to be put on certain email lists, I have come accross an incentivized web offer that will pay a person five dollars to go to one of the web sites and fill out information for an automobile insurance quote. Of course, the company sending out that web offer is making probably $15 for each quote generated and is willing to share $5 with the person filling out the quote form.

So, I have finally found a source for many of those crappy leads that I paid (not recently...but in the past five years) for.

If the above poster is achieving success with web leads, albeit with the intensive marketing investment of time and labor, the I say congrats. But, with all due respect, my days and nights of making calls until 9pm are over, and if that's all that's left to the personal lines auto market, then I need to sell out, don a vest and start greeting people at the local big box store.

[patstanley]

For me, conversion rate is something which you would not be sure about. Follow up on such leads will be crucial.