What is the value of qualified set Commercial Appointments

[Insurance Guy 205]

Can someone tell me the value of having qualified commercial appointments set for them by a licensed Agent?
I understand telemarketing companies charge by hours or $400-$700 per appointment.

Thanks

[Shagster12]

IG 205,
In my experience of 15 years of telemarketing and appointment setting and 11 years as a broker, I find that having a [u][b]qualified[/b][/u] lead developed by a [u][b]QUALIFIED[/b][/u] lead generator has several advantages as opposed to only a couple of disadvantages. (Note the use of a [u]qualified[/u] lead generator - unqualified lead generation is costly at best and seldom advantageous unless it's done in training by a qualified lead generator...)
The disadvantages are readily obvious, besides the pure cost factor, and I believe you can find lower costs than the $4-700 per lead, you also have to be VERY detailed on the type of lead you're looking to develop or you can get in to leads you're not qualified to work or areas where there is only limited market access for the best coverages, good leads but poor prospects, or a number of other factors which create additional expense rather than generate revenue....

The advantages are;
[u]You[/u] don't have to spend the time to develop your own leads. And the typical law of numbers tells you that it will take you roughly 25 cold calls to develop a real prospective lead. And with the economy the way it is that number may be getting even larger. So if you consider it can take from 3-5 minutes per call you're looking at 1-2 hours of pure cold calling to develop 1 decent prospective lead. So then calculate how much your time is worth and check the balance. Then consider if you're trained and capable of the dedication you need to make 1-2 hours of pure cold calling a day to develop that 1 prospect, and more prospects = more hours. So I say if someone else can do it for you while you work other leads, prospects, and clients, then the cost is truly worth the trade off. I currently work about 50% cold calls and 50% generated leads and my closing ratios are higher (roughly 40%) on the generated leads versus my own cold calls (roughly 30%) and I am trained and experienced as a telemarketer...
So if you're sure the lead generator is qualified to work within the guidelines you would outline for their services, then I say you should give it serious consideration. I only recommend you ask for references before signing up and check them out first. Make sure they're providing the kind of qualified leads to their other clients that are paying off by getting sales!
Shagster..

[ericusn]

My experience with professional lead/appointment generating vendors has been uniformly bad. All the other agency owners I have talked to report similar results. The close rate is poor. I and others I have talked to have had better luck with hiring an inhouse telemarketer. I pay mine $100 an appt. I also pay a $10/hour. I have had mine working for me for over a year now. Recently I sent him thru a licensing course and got him licensed. Now i pay him $10 hour plus 10% fo the first year only commission.

[JustinReed]

Shagster is right on just about every point. At GMR, we specialize in appointment setting for both Commercial and Group Heath accounts. There are few if any agencies that can grow their business without making phone calls. The reason our firm and others exist at all is that it is typically more cost effective to have someone else make these calls for you so that you can spend your time servicing clients and writing more business rather than sitting on the phone for hours per day.

He is also correct about the pricing. I have been in the industry for over 6 years now and I have never heard of anyone charging $400 or more for an appointment; it is typically much less than that. I have not heard of their company so I can't give any information directly relating to their firm or how they do business. I will say that in most cases if a company is charging you hourly then it is probably not worth your time. You should only pay based on a guaranteed number of leads/appointments so that you know what you are getting for your money.

As for having a licensed agent making the calls, it is really not an issue either way. We have a licensed agent on staff here making calls and it may be a slight advantage in their understanding of the industry, but what you need is a skilled appointment setter and not a licensed agent. In most cases a skilled telemarketer will set more appointments and generate more leads than your average agent and will have a firm grasp on the inner workings of the industry as they spend 8 hours a day making calls related to insurance. In the case of our telemarketers here, they regularly communicate with our clients so they are learning every day.

Our programs are based on a guaranteed number of leads and appointments. You do not pay up front and you can cancel at anytime if you feel we are not performing as promised. The programs start at about $500 per month. If you have a few minutes to discuss this, feel free to give me a call. I can go over your goals with you and let you know what it would take to get you there.

[JustinReed]

My experience with professional lead/appointment generating vendors has been uniformly bad. All the other agency owners I have talked to report similar results. The close rate is poor. I and others I have talked to have had better luck with hiring an inhouse telemarketer. I pay mine $100 an appt. I also pay a $10/hour. I have had mine working for me for over a year now. Recently I sent him thru a licensing course and got him licensed. Now i pay him $10 hour plus 10% fo the first year only commission.

Just ot address this as quickly as possible. There are a lot of bad marketing firms out there, I won't deny that. Most of my clients have tried several firms already and had bad experiences. That it not rare at all. Paying up front, by the hour, or to a company that outsources their work accout for 90% of the bad experiences. As for close ratios the industry average is about 20%. I have seen close ratios at 90% and as low as 10%, but that is really dependant on the producer and their markets, and most importantly what they are going after. A firm can only guarantee a face to face appointment, not a sale. Sometimes this problem relates to a telemarketing firm setting appointments with no regard for the type of busienss that a producer is interested in. Of course if the marketing is not targeted correctly by the marketing firm, the producer will be at a disadvantage.

To give you an idea on how in housoe services compare to outsourcinig just look at the numbers below. Let's say your in hosue person sets 1 appointmetn per day. You're not only paying $180 an appointment to start, but also $22.50 an hour plus bonuses which could more than double that cost. I have only seen a few agencies with effective in hosue callers and the cost per caller runs between $50-$75k...for a telemarketer. That is before you factor in the taxes, work comp, cost to manage and train, and most inportantly the turnover rate (which tends to be high). So best case scenario you are paying about $250 an appointment, and more likely when all is said and done you are probably closer to $500 or more per appointment.

With an outside service like mine, you would pay between $175-$250 an appointment, the appointments are guaranteed, you don't have the headaches of managing them or finding replacements when they leave. And best of all, you can use the service when needed and cancel when you don't need it anymore or you have reached your goals. Much easier to start or stopl a program than to hire or fire a person.

[Insurance Guy 205]

This is all great feedback. In regards to the size of the Accounts I write-It is typically $15,000+ in revenue.

Are the telemarketing firms prospecting at that level?

I understand that having the experience and the ability to isolate accounts based on carrier, premium, and the ability to identify pain upfront can be of significant value as they say.

Most decision makers or anyone can quickly sort out a "telemarketer vs. a person delivering specific pain points specific to their company and not just Industry".

It seems that in this ultra competitive marketplace that I am in-Every single bit of information and edge could help.

Something they mentioned to me I though held some value.

How do you relay to a telemarketing company that carrier X is a waste of time but carrier y is worth the time?

How do you teach a telemarketing person to give insight into the ins and outs of paid loss retro work comp plans? or a Loss Triangle? or ways to self insure that may not have been brought up to the Insured? Captives? Etc.

Some may respond that their only job is to sell the appointment-But it seems to be a clear difference from walking in to see a Decision Maker who knows it is not going to be a waste of time based on the dialog of that phone call.

Still looking into this and the different companys.

[JustinReed]

Hi Insurance Guy,

Give me a call tomorrow or provide me with a number as I can address your concerns better in "real time" as opposed to e-mail so I can go into more detail with you. In the meantime, see below.

In my opinion, much of what they are telling you is what I would consider "fluff". Basically offering reasons why they charge more than others, while most of those reasons are actually the exact reason not to pay more for their service. The truth is, very few decision makers in the $15k premium level can pick out a telemarketer vs. an actual agency employee or agent. Maybe when dealing with $250,000 accounts, but not at this level. And, our telemarketers do not portray themselves as agents even if they are licensed. The fact is that no licensed agent working for another company is going to be as well versed in what you can do for the prospect as you are. In an appointment setting situation, less is more from our end. Our job is to qualify the prospect based on your criteria and to find an interested prospect that wants to discuss the insurance with you. If you are going to allow the telemarketer to address insurance specific questions, you are asking for trouble. Insurance differs greatly from area to area and specialty to specialty. Our licensed agent is licensed in California, but it would be unprofessional and possibly illegal for him to address specifics like that outside of California. Even if he were licensed in every state it would still be irresponsible for him to do this because he would still in no way be as knowledgeable as you in your specific field.

Any telemarketer with more than 3 months on the phone will know the basics of self insured programs and the difference between captives and independent agents; you don’t need to be licensed for that. As for knowing which carrier is a waste of time and which is not, that is your job (the client) to let us know. Most telemarketing firms work nationally, and because of this we have active accounts in dozens of states and cities. There is no way for anyone to possess that kind of information for every possible location without the client letting us know. It is all about communication between the client and the telemarketer.

Again, I have been doing this for a while and have worked at the highest levels in this industry and I can tell you that the more the telemarketer talks, the less chance you have of a sale. It is all about the 80-20 rule. Our job is to get the prospect to talk and share their information. That allows us to qualify them and find out their pain, and ultimately set the appointment so you can do the rest. If you are looking for a telemarketer to do this entire process for you , worst case I think you are going to find yourself overpaying and getting little in return, as well as possibly being liable for mistakes the telemarketer makes in their representation of your company. And best case you are going to lose out on some opportunities because the telemarketer is going to blow the opportunity before you ever get a chance to meet with them because they said too much.

Whether you contact me or my firm or not, I would do some more research? I can tell you there are literally hundreds of companies in the industry and only 10 real players. This company you mention is not one of those 10. Of the 10 real players, less than 5 will actually do what they say they will do. Unfortunately the reputation my industry has is in most cases well deserved. And remember that anyone can provide a reference, even a one man show working from home will have a couple references for you, and nobody ever gives a bad reference. Do your homework before making an investment, and do not pay the full amount or even half of the amount up front. And get a guarantee in writing. You will thank me later.

[Insurance Guy 205]

$15,000 in Revenue to the Agency not Premium.
In premium dollars it could be as much at $150,000 to approx.$80,000 in premium

[JustinReed]

Ok, I will address this as well. If there are any further questions please call or e-mail me direct, as I don't want to hog up this post.

Basically in my experience and in my opinion everything this firm is telling you is the wrong way to do things. I will explain why. And keep in mind that without naming names, we are currently working with 4 of the top 10 agencies in the country as well as a couple other big name shops that target $250k + in premium.

Having a licensed agent calling larger accounts can be a bad idea for a few reasons.

#1 - When calling these larger accounts it is completely acceptable and even expected that an agent will not call them directly making their own cold calls. All of our callers portray themselves as an assistant of yours and not an agent. The decision makers at this size company will expect that, as they are likely to have their own assistants that do the grunt work for them. It is not realistic in most cases for an agent who works this size account to be sitting at their desk making cold calls.
#2 - It is even more important not to have your caller misrepresent information at this level. It could put you and your agency in a very bad position.
#3 - These prospects know that you work on commission. If an agent calls them and gets them interested and then tells them some other person will be coming out to meet with them, your cover is blown. They now know that you are using a telemarketing service because an agent would not be sitting at his desk making cold calls just to hand off opportunities to another agent. In many cases the prospect is comfortable with the caller on the phone and will ask to meet with them directly. Being "just an assistant" is a perfect out in that we are just making calls for our boss, and our boss (you) is who they need to meet with.


Now, to play devils advocate here I went to the site of the firm you are talking to. My educated guess is this is a one man company and they are working from home. It is probably an ex-agent that is trying to capitalize on the fact they still have a license. The "website" is just a blog. It was created in July of 2008, one month ago. The e-mail is Gmail (free Google e-mail). There is no address for the business given, no phone number. Instead of COMPANY PROFILE, it says "MY COMPANY PROFILE". Again, if you choose not to use my firm it's OK, we might not be a fit anyway. I just want you to know what you might be getting yourself into. You are rolling the dice with someone who just started up, and from the advice they have given you I would say they still have a lot of learning to do. And again, there are only about 10 real players in this industry and just a few that are good at what they do. I can't sway for sure about this company as I have never heard of them, but just in looking at their wedsite I see a lot of red flags.

Thanks

[scott]

Cold calling wastes your time and sours your reputation with prospects. Paying someone to phone-spam for you is even dumber.

Do you like to be interrupted by a telemarketer? Do you choose doctors, lawyers, accountants, architects, or any other professional based on a cold call? Would you even consider retaining an accountant who phone-spams you?

Why do you think your clients are any different?

[JustinReed]

Cold calling wastes your time and sours your reputation with prospects. Paying someone to phone-spam for you is even dumber.

Do you like to be interrupted by a telemarketer? Do you choose doctors, lawyers, accountants, architects, or any other professional based on a cold call? Would you even consider retaining an accountant who phone-spams you?

Why do you think your clients are any different?

While I agrree completely when talking about personal lines, I can tell you from my epeerience and my clients experience this does not appply in commercial lines. Having a business call you when you are at work is much different than being called at home. Most businesses advertise in some way and they understand that being proactive in looknig for new business is the way to not only grow, but just to keep afloat in many cases. And if the program is worked correctly, the prospect will never even know they were contacted by a telemarketer.

The fact is that 90% of commercial and group heath agencies do some form of telemarketing, whether outsourced or in-house. If you are in that 10% that does not, you are at a disadvantage becasue your competition will be steadily picking at your book of business. No other kind of advertising or word of mouth can compete with the volume of sales that you can get from a good telemarketing program. Even my clients who do not believe in telemarketing know that it is a necessary evil just to make up for what is lost through their competitors telemarketing efforts on their own client base.

Justin Reed

[Shagster12]

Well Scott,
Your opinion is pretty clear. I guess you have some other magic formula for starting up your business and prospecting. But let me guess, that information is only available through thousands of dollars of consultations with your firm.... Yes that would be a much better option....
Everybody that I know in this business that has built a successful practice has prospected cold leads one way or another.
If you have a different formula for success then I would think you should not even have the time to monitor or respond to these posts, you should be richer than rich and spending your time in much better fashion...
And that you find no value in prospecting in this manner just tells me you've been one of the people who doesn't know how and tried it yourself, or hired someone who didn't know how and it failed in either case.
Once again I can tell you that I have built a comfortable book of business in 1 1/2 years about 50% of which was developed through in-house and outsourced lead development. I'd say that's not too stupid at all.

Shagster

[JustinReed]

Shagster, I agree. I have a client who must be dumb. He just e-mailed us yesterday that he closed a $279,000 account from one of our appointments that cost him $60. So far his investment with us is just a couple thousand and his return about 20 times that. I guess if he were a little smarter he would have given that to a "consultant". Go figure...

By the way Shagster, if you are ever in need of some more leads/appointments, feel free to give me a call.

[scott]

I do not wish to be interrupted by marketers. I therefore will not interrupt others as a part of my marketing. For me to do otherwise would be unethical.

Just because you have a phone does not mean that I am right to call and interrupt you for my own benefit.

My marketing approach is no secret. I have outlined it here many times. Simply put, make yourself a person of interest to those in your marketplace such that you are sought-out because there is the perception that you provide value.

[jzeledon]

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