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10 tips on buying leads

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Margie Barrie, a veteran long-term care insurance (LTCI) agent, marketer and educator, has been writing articles about long-term care (LTC) planning and related issues for years.

See 2 ways to increase LTC product sales and 7 ways to fight the holiday blues.

Here she gives a reader ideas about how to use services that sell leads. 

Q. I need to order leads so that I have more prospects to contact. I’ve never purchased leads. What suggestions can you provide?

A. Purchasing leads has become a significant part of many agents’ marketing budget. In order to take my sales to the next level, I have definitely decided to go that route. That’s why I was really fortunate to get guidance from Jonathan Gardenier, president of Sigma Marketing Services, a company that specializes in providing LTC and Medicare supplement leads. Before placing my order, I sent him a list of 10 questions. Here are his answers:

1. What is the first step for an agent looking to buy leads?

Make sure the lead company understands your practice, so they can recommend the right solution that fits your needs.Ask questions until you are very clear about what they are offering and how they will service you after your purchase.

2. Some agents have seen the prices of direct mail increasing but their conversion to sales decreasing. Is direct mail dead?

What agents are finding is that certain types of direct mail are in fact “dead.” With LTC, you are trying to reach an affluent consumer. The old pop-outs, bi-folds, and mini-letters from the 1980s don’t cut it anymore and agents are seeing that they don’t convert to LTC sales. Instead, consider using full-letter and legal-sized materials for LTC.

Tape measure

3. What can agents do to maximize their results with direct mail?

Make sure you have proper prospect selection. This goes beyond age and income filters. Ask about the modeling and the number of data points to rank prospects that the firm uses. (Jonathan recommends using at least 15 data points.) Make sure you have a large enough territory so you don’t have to remarket the same households too frequently. Some companies only restrict remarketing for 90 days. This is a fatal error that decreases response rates and increases your cost per lead.

4. What is the main factor that impacts response rates?

Territory has a huge impact on response rates. Many areas have been “over fished” and see response rates substantially lower than average. A good marketing company will advise you of this, and it is the reason so many agents are going virtual, so they can work a lead anywhere in the state or in other states.

5. What should an agent use to measure and evaluate their results with leads?

While response rates and cost per lead are important, they are only half the equation. Ultimately, you need to look at your cost per customer. The quality of the leads you purchase are just as important as their cost. Considering the time you invest working leads, most agents are better off with higher quality leads dollar-for-dollar. Also, only work with exclusive leads.

6. With more agents making the move to virtual webinar presentations, what lead types do you find work best?

If you want to sell virtually, you need a prospect who is tech savvy and comfortable doing business virtually. Agents will find better results with Internet leads and e-mail marketing leads than they will with traditional direct mail.

See also: How to Avoid Buying Bad Insurance Leads

George Washington on a dollar bill

7. What conversion rates can I expect?

Conversion rates will vary based on a variety of factors, all the way from where you are marketing to the skill set of an agent. Internet leads typically convert anywhere from 35 percent to 75 percent better than traditional direct mail.

8. What makes Internet leads convert better than direct mail leads?

Unlike a direct mail lead, an Internet lead is generally for a prospect who searches for the information. It’s a pull versus a push. This dynamic results in higher conversions to sales. Internet prospects are more adept at purchasing online.

9. How should I measure results?

To measure short-term results, track the percent of people you are able to speak with on the leads you get back and the percent of people who understand they were requesting information regarding LTC. People can change their minds, but most should still know they requested info on LTC. For the bigger picture, keep data on conversion – meaning the number of sales you make. However, this data will take longer to obtain.

10. How much should I budget to purchase leads and to get acceptable results?

Leads are an investment in your practice. You shouldn’t expect to have six-figure sales while only spending couple of hundred dollars for marketing. The top brokers and general agents know they are going to need to spend almost 50 percent of their comp on marketing. That is why getting referrals from your existing lead clients is critical to bending the cost curve down.

See also: Marketing 2.0: strategies for online lead generation