The most common mistake that agents who are new to purchasing leads will make is picking a provider based on price. Yes, price does matter, but actually has very little effect on the ROI when all is said and done. Buying cheap leads with a low conversion rate may be somewhat easier on your bottom line, but this begs the question, why aren’t you converting the leads? In fact, it’s doubtful that your conversion rate has anything to do with your cost of the lead. A low conversion rate typically results from:
- Noncompetitive pricing
- Slow response in making the first contact and first quote
- Inability of the agent to establish any rapport with the prospect
- Below average phone skills
If we agree that lead conversion has very little to do with pricing, then what are the other must-haves when it comes to choosing a lead provider?
Unless you can quote every product under the sun, you are going to need filters on the leads you receive, especially if you are selling commercial lines. It appears that commercial leads are a little easier to filter because every industry class is assigned an SIC code. This does not mean that the lead provider will allow you to filter by each specific code, but many will allow you to filter by class. For example, if you carriers are big on main street retail, and your pricing is really good, then that class of business will result in better conversions if contractors are not included. If you are very competitive with general liability, but do not have a market for product liability, then you need the ability to filter out that code so you’re not paying for leads that require product liability. Without the proper filtering, you could be inundated with absolutely worthless leads that you’ve spent very hard earned money to purchase. It’s not unusual for most agents to throw away two out of ten leads simply because they do not have the product that the prospect is looking for.
Returns for Credit
Nothing is worse than paying for a lead that has bad or bogus information on it. What makes matters worse is when the lead provider assumes that you are trying to get away with a refund you don’t deserve and fights you every step of the way. Make certain that you understand and agree with providers terms for returns up front, not after you’ve asked for five returns on leads with bad or bogus information. What lead providers need to understand is that the agent shouldn’t have to pay for the prospect’s stupidity. How many times have you gotten a lead asking for general liability when what they need is product liability? Or, you get a lead for a personal auto policy from an Uber driver. Unless you can be all things to all prospects, you need to expect that you will be throwing away a certain amount of leads that you should not have been charged for.
Know Your Competition
Nothing is worse than to finally get in touch with a prospect only to find out that they are sick of getting calls from so many agents. Sure, some lead providers will guarantee that you and only four others will get the same lead, but how do you know? The best way to find out is not when you’ve reached an angry prospect that is ready to hang up on you. The best way to find out is after you’ve made the sale, made a new friend, and have the opportunity to discuss how many different agents called or tried to call and how many emails your new customer received from other agents.