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.”

Waldron insists there are four factors to making a sale, factors he labels AIDA: attention, interest, desire and action. It is a process. Too many advisors, he says, think a lead will take care of all four factors, but it really handles the first three. A lead means something has attracted a person’s attention, peaked his interest and created the desire for something. It is up to the advisor to get that person to take action – to purchase life insurance or LTCI or an annuity. And the advisor needs to be patient.

“Converting a lead into a client takes time,” Waldron says. “Advisors have to invest their time and drip market to the prospects that don’t buy initially.”

InsuranceOnly’s Howard says advisors can’t reasonably expect to convert every lead, and they shouldn’t be too quick to judge a lead generation company’s performance.

“Advisors need to be prepared to take at least 100 leads to rate a company,” he says.

Pearson agrees that advisors should give companies a chance to show a strong track record, but he cautions against investing too much upfront. If a company insists on an advisor paying for 30 or 40 leads upfront, the advisor should be leery of becoming too entangled with that company to get out.

“It’s pretty messy to force someone to buy something they don’t want,” Pearson says, which is what can happen if several dozen leads are paid for upfront and they are all bad leads.

One thing to keep in mind, however, is that what appears to be a bad lead may simply be a mistimed lead – one that is too early.

“A bad lead today may be a good lead 45 or 60 days from now,” says Marc Lankford, vice president of sales at Postmark DMS in Houston.

Situations change, says Postmark’s Larry Hook, vice president of sales and marketing, and prospects become aware of the need for certain types of coverage. Someone who isn’t interested in LTCI in February may look for just that coverage in July after his mother or a sibling goes through an LTC event. The advisor who stays in contact with prospects is the advisor who eventually will do business with those prospects.

Scrub down

One way to avoid buying bad leads is to make sure the company selling them has a rigorous process for qualifying each lead. Simply relying on the information provided may not be enough, especially if people feel obligated to fill out a form and then use bogus information. Companies that want to do right by advisors will take the steps necessary to make sure each lead is just that: a true lead.

InsuranceOnly puts each potential lead through its telemarketing process, wherein each prospect is called and asked qualifying questions concerning bankruptcy, their health and their work status. This allows the company to remove any duds before offering them for sale to advisors.

Postmark has representatives who confirm names and contact information. The representative also will go through a fact-finding process, asking what sorts of products make people most comfortable – variable products that contain some risk or fixed products with guaranteed return. The company then conducts an additional step.

“Agents can choose standard questions or create custom questions [for our representatives to ask],” Hook says. “That way, when the agent calls the prospect, he knows exactly what the person is looking for and what [the prospect] expects. Agents can even listen to the calls so they know things like exactly how to pronounce a person’s name. We try to give the agent as much information as possible to help close people.”

A good company should make sure the potential lead has enough money to invest in any given product. If a senior indicates he is interested in an annuity, but he only has $3,000 with which to purchase it, that lead probably isn’t any good. Also, lead generation companies should make sure the person has a firm grasp of the product he indicated interest in. Selling a long term care insurance lead to an advisor who calls only to find the senior is interested in single-premium life insurance is going to hurt a company’s credibility.

Most lead companies will substitute leads for leads that prove to be bad, but if the company takes the time to confirm the most basic information in the lead – especially the contact information – the advisor doesn’t have to waste his time with faulty leads.

To make sure an advisor gets the best leads possible, he should check with prospective lead generation companies about their scrub-down procedures. Leads that aren’t pre-screened are just names with phone numbers attached to them.

As 4InsuranceAgents.com’s Waldron says, advisors can spend their precious time chasing after leads, or they can invest their money in quality leads. Successful advisors make their livings by creating financial plans and selling products that protect seniors’ money, not by spending half of their time looking for new clients. Knowing how to determine what constitutes a quality lead will help advisors choose a partner in prospecting and lead the way toward profitability and prosperity. And remember: A lead is only as good as an advisor’s commitment to follow-up.