How to Pick an Online Lead service

By Martin Fleischmann | Published January 15, 2008
From the January 2008 Issue of
Senior Market Advisor Magazine

Insurance agents are like any other salespeople - they want great leads that they can turn into more sales. In the old, purely offline days of 10 years ago, the best customers tended to be the ones who were serious enough to seek out help first, not wait for someone to solicit them. That usually meant customers referred from word of mouth, or walk-in business.

In today's online world, an inbound customer means something very similar: someone has come to a search engine, found a Web site with helpful information, then filled out a form to ask to be contacted for further help.

Unfortunately for the agent, most people aren't searching for an agent in their geographic area at first - they may just type in a generic phrase like "life insurance quote" or "life insurance rate" or even just "life insurance." When it's time to get down to seriously considering a policy, they may feel comfortable enough to talk with someone in a call center a thousand miles away. More likely at that point, however, they would rather talk to someone locally who they assume will be more responsive and accountable.

But how will a local agent get a customer if they've gone to a national site? The answer is to be buying leads from a lead service that attracts these inbound customers and has local agents in their network follow up.

The dilemma in picking a service

Many services exist to fill the need for leads, and invariably they all trumpet to agents that their leads are the best. Clearly agents want the best return on their investment, but almost always lack real data or knowledge on what the differences are in lead quality between companies. They may try a company a friend has used, but still can't judge how their experience will compare to others. Just like buying a new stock, they struggle with the conflicting forces of fear (of potential loss) vs. greed (of potential return).

So most agents, especially ones newer to buying online leads, tend to discount the competing claims and decide which service to try based on the only difference they can see easily: Price per lead. They figure that they're taking less risk to pay less per lead and potentially risk less money. If/when it does not work out well, they may then conclude all online lead services don't work well, which is just not the case.

Look for quality processes

However tempting a cheap lead might be, more experienced agents (experience usually born from pain) understand that better quality rarely comes cheap. They further know the lead quality side is much more important than price. That's because aside from caring about cost per sale, they care most about the return on their precious time. And they're right. Wouldn't you rather pay twice as much per lead and have just as many closes from half the leads and maybe half the time?

So here are the three major factors the smart, experienced agents have learned to look for:

1. How the leads are generated. This is the most important driver of lead quality - and best proxy for close rates aside from their peoples' sales ability and effort. As discussed right off, inbound search leads work much better than ones obtained through soliciting, whether by e-mail offers, incentive offers ("Enter here to win an iPod or iPhone!"), pop-ups, or co-registration. Certainly be careful if a network of smaller "publishers" or "affiliate" sites that are potentially using these methods supply any lead service.

2. How quickly, widely, and carefully the leads are assigned. Leads need to be sent close to real-time as the half-life of the customer's attention can be hours long. Sending a request to too many agents (four is too many) often makes a customer feel harassed and not want to do anything. Top lead services have found from years of experience in working, generating, and selling leads that two to three responders each offering different options is a sweet spot that works best for everyone.

3. The lead service should have some basic filters. There will always be some weird leads that come in. The system should not automatically send out leads where the phone number or name looks wrong or suspicious. The service should attempt to have humans look at suspicious leads before they are sent out, not just send anything on through and have you spending too much time sending obviously bad ones back or totaling up credits. That said, there will always be a certain percentage of leads that are very hard to reach or are not serious. That's just part of the mixed bag of seriousness and built into the price, but it shouldn't be a majority.

Follow these pieces of advice, but remember to give any new lead service a little time to show results. Generally you'll want to know how you are doing after a statistically significant 30-40 leads, and have had time to review your process to make sure that you or your people are following up quickly and effectively. After all, even the best quality online leads are just potential customers until you do a good job reaching them and convincing them you can help.

Glossary of Less Sound Lead Generation Methods:

• Affiliates – An affiliate program is a network of smaller sites that send traffic or leads to a larger lead service, which then sells/distributes the leads.  The affiliate is paid for leads delivered, but usually isn’t asked how they’ve generated them, allowing for plausible deniability by the lead service.  Sometimes an affiliate will sell the same lead to more than one lead service, or the lead is traded around.
• Banners/Pop-ups – Some lead services have used ad banners and annoying pop-ups to solicit the consumer. However, people have grown consistently oblivious to banners and annoyed with pop ups, making these tactics more ineffective.
• Co-registration – When web surfers sign up for a free newsletter or service or have bought something, they often also get the option to sign up for other offers.  Sometimes visitors aren’t even asked, there is just some small print saying that the info. can be used to offer other services.  Obviously, these leads are rarely serious.
• Emails – Similar to banners and pop-ups, e-mail marketing has taken a direct hit due to spam filters and other tools designed to filter them.  Too bad that so much spam still gets through, but even the people who respond to legitimate campaigns have been solicited and don’t tend to be as serious. 
• Resold from a different service – These are older leads purchased from other lead companies or wholesalers. Traded around leads are usually useless, either because the person is not very serious or has already had 5-10 places call them.

Questions to ask lead services:

• What information do you as an agent receive from each lead?
  It is vitally important to have as much information as possible in order to follow up correctly and be better prepared for a conversation. You should get all relevant personal and contact info possible, info on customer intent and decision timing, previous or existing coverage, and demographic info like occupation, income, conditions, and needs where appropriate.
• How quickly do you as an agent receive the leads? 
  A good rule of thumb is to remember that the older the lead, the less viable it is for you.You want them either real time or only slightly delayed for quality checking, not batched or sent every few hours or once/day or several days after submission.
• How widely are the leads shared?
  Most lead services share leads with multiple agents. However, to get the best value for your money, make sure to ask how many times each lead has been shared. A lead given to 2-3 agents is OK, but a lead shared more than 4 times is unacceptable.
• If exclusive, is the lead newly generated or just recycled?
  If you are receiving a lead exclusively, ask how recently the lead has been acquired to avoid receiving stale or already sold information.  Exclusive from one service may not mean that it’s never been called by another!
• Is there a carrier-exclusive policy in place?
  A reputable lead service will never sell a single lead to agents representing the same carriers in the same area of the country. You clearly do not want to compete with agents within your own company, and it’s not helpful to the consumer either.
• What are the policies for billing, crediting, and terminating? 
  Most lead services have you charge up an account and then buy a minimum number of leads to assess your results.  That’s fine, but make sure you aren’t roped into long-term contracts if lead quality starts to take a sudden nosedive, especially after an introductory or “free” initial phase that may be skewed.