Before the Internet was widely used, say prior to 1995, insurance agents employed off-line insurance lead generation systems such as direct mail, cold calling, telemarketers, seminars, etc. In fact, my firm purchased the assets of a company that did lead generation through newspaper ads. While these insurance lead generation methods still work (when done correctly), the Internet is a far more powerful and cost-effective method to generate insurance leads. I recall speaking to the manager of the long-term care lead generation system for a large insurer and he reported that the direct mail program was being disbanded due to excessive cost to generate each LTC lead. He said that when the cost per lead exceeded $28, direct mail became unprofitable. The Internet provides insurance leads for less and that’s why the Internet is the most used system for insurance lead generation. However, there are some offsets to this effectiveness as I explain.
Internet Lead Variability Greater than Off-Line Leads
Unlike direct mail where you focus on prospects to receive your mailer, any web surfer can see your ad on the Internet. You have no control over the quality of responses or respondents you get. That does not mean your Internet generated leads will be of lower quality–it simply means that you will experience greater variability of insurance lead quality.
For example, an insurance lead generation system produced for Charles Wood in Texas his largest client worth over $200,000,000. That size of whale from Internet leads is uncommon. Other insurance agents complain that the Internet leads are of low quality. With the Internet, your insurance leads will be both better and worse than when you use direct mail, seminars, telemarketers as these methods tend to produce homogeneous prospects (because you mail to people in the same zip codes, age range, house value, etc). When using Internet leads, you will also need to tolerate bogus leads as explained below.
More Bogus Leads from the Internet
Let’s say that you run your offer on a web site controlled by another party, or your insurance lead provider does. You or a lead provider is forced to run ads on sites owned by others unless you have a way to put up and own 5000 web sites. In this case, you (or your lead provider) agree to pay the web site owner per insurance lead delivered to you. Maybe this web site owner is not the most honest person so he hires kids to take the telephone white pages and enter the names, addresses and phone numbers of residents from the phone book as leads. These are real folks so the insurance lead information is accurate but these people never requested anything. The problem is when you call, the prospect says “I did not fill out that request” or "I did not order that item."
Very High ROI
So the low cost of Internet insurance leads is countered by the greater variability of rich and poor respondents as well as a larger amount of bogus insurance leads. As long as you understand that, you will be happy with results as you can easily earn a 1000% return ($1000 for every $100 invested) and be busy with insurance leads and a full appointment calendar.