All leads are not created equal

Sonny Waldron likes to talk about leads. In fact, Waldron turns an old sales axiom on its ear. He claims nothing happens until a lead is generated; not, as popular wisdom says, until a sale is made. And Waldron says too many advisors spend too much of their days prospecting instead of purchasing leads and working them.

“Either you spend your time or you invest your money,” says the president and owner of 4InsuranceAgents.com. “And time is a precious commodity.”

Waldron’s Roanoke, Va.-based company doesn’t sell leads; it helps agents find companies that sell leads. He acts as a go-between for agents and lead generation companies, saving senior advisors precious time in the search for leads. Waldron says advisors are too good at what they do – create financial plans and sell – to spend time prospecting.

“If a [senior advisor] invests his money the right way, he greatly reduces the need to prospect,” Waldron says. “But only if the advisor invests in the proper lead programs and systems.”

Many advisors still aren’t sure what the lead generation game is all about and what it takes to be successful generating leads. For more information on that aspect of the prospecting process, see “Lead generators” on page 96. Another piece to the prospecting puzzle is the topic of what constitutes a quality lead. Lots of companies will tell advisors they have hot, quality leads, but simply finding the name, phone number and address of a person 55 or older doesn’t mean the lead is quality.

What are some of the things advisors need to look for when seeking quality leads?

Lead qualities

The best lead, according to Brad Howard, director of brokerage operations for InsuranceOnly Inc. in Denver, is one that converts, but that cannot be guaranteed. Next to that, the best leads are leads gathered from people who have expressed interest in a particular product or service, either by returning a piece of direct mail, clicking on a particular online ad or filling out an online form.

Chris Pearson, president of ABCLeads.com, says how the person is acquired is important. Pearson’s East Greenwich, R.I.-based company deals exclusively in Internet leads. He says people acquired through organic searches are good leads. An organic search lead arises when a person goes to a search engine, types in LTCI or annuities or life insurance, and clicks on one of the companies that appears in the search results. If that person fills out a form requesting more information, that lead is about as good as it gets.

That person, Pearson says, “is already fairly well down the sales cycle. Something triggered them to look for a very specific product. They may not be ready to sign on the dotted line, but they are interested.”

Internet leads also can be attained through co-registration, where a senior may be looking for elderly housing, for example. He fills out the elderly housing online form, which then prompts him to check any number of other boxes for products he may have some interest in, such as LTCI or annuities. This is still a good lead for an advisor, but not as strong as one obtained organically, and not as strong as it is for someone offering senior housing services.

Howard says a good lead is someone beyond the age of 40 (that number changes for advisors, depending on the audience they want to reach) for whom his company has captured income information, typically more than $30,000 to $40,000; in addition, the person is looking for $250,000 or more in face value for life insurance (that number will change, too, depending on what product the advisor is looking to sell). Finally, Howard says quality leads are those with more than one phone number, either a home phone and a cell phone or an office phone and a home phone.

The next factor that constitutes a good lead depends on the advisor himself: exclusivity. Some companies will sell a lead to only one advisor, making it more valuable and more expensive. Other companies will sell the same lead to several advisors, dropping the cost down as a result. ABCLeads.com deals in exclusive leads, but Pearson recognizes that’s not the only way to go.

“I’m not saying one is better than the other,” he says. “Non-exclusive leads cost less. Advisors have to measure if the reduction in cost per lead is worth competing with other advisors for the same prospect.”

Advisors who act on leads immediately may find they are able to save on the cost per lead by purchasing non-exclusive leads.

“Some non-exclusive leads are good,” Howard says. “If someone is an aggressive agent, he can make a non-exclusive lead good.”

Be realistic

Even aggressive advisors have to keep realistic expectations for the leads they work. An advisor’s conversion rate isn’t going to shoot through the roof simply because he starts purchasing quality leads. The conversion rate may go up, but it still depends on his skill in drawing up a plan and meeting a prospect’s needs.

“Most agents aren’t realistic about leads,” Waldron says. “The prospect’s checkbook won’t be on the table when they get there. They have to be willing to take the steps. The steps are: ask questions, identify problem areas and offer solutions. We have two ears and one mouth – we should use them accordingly.”