In talking with agents about leads the questions I am asked are all over the board. Questions such as “What are the returns I can expect,” “What is the closing ratio,” “What’s the cost,” and, believe or not, “How good are they?”
Any IMO, recruiter, upline manager who spits out an answer to these questions leaving you with the impression that their leads are the best around is lying to you. Let me explain taking on these questions one by one.
“What are the returns I can expect?” The honest answer you should get is – That depends on the area(s) you’re willing to work. The as well as whether you are working mortgage protection market or final expense more limited the area the lower returns you’ll realize. Successful agents go to where the leads are regardless of how far they must drive. For myself, depending on the time of year and the market I’m working I’ve driven 2.5 hours away because that’s where I’ll receive the best returns.
“What is the closing ratio? and “How good are they?” The answers are SOLEY base on your skills. Skills such as appointment setting, choosing the right product, listening, field underwriting, and your story telling. No two agents are alike. So, for an IMO to tell you flat out agents close 70% of our leads, should mean nothing to you.
The most popular complaint is the leads from XYZ source are terrible and no good. I can’t tell you how often I’ve heard this statement. My first response is asking how much further training they did to better their craft. Popular response: “…I’ve been doing this for some time and know how to close…” each and every time this response is given, I’ve passed on bringing that agent on board.
A lead, any lead has only one function; give you an opportunity to talk with someone. That gives you the chance to set an appointment and get you a referral. Both are a direct result of your skill set.
It is not a leads function to provide applications or guarantee an appointment. Each prospect is unique, therefore, listening and determining what they “need” tells you the story they will respond to. Your stories are what close more leads. Choosing the right carrier gives you commission.
“What’s the cost?” You might think this is a reasonable question to ask. I agree, this issue lies in why we are asking. Let’s assume the lead content between IMO’s is equal, they both say basically the same thing. Let’s further assume your skill set is about average, after all each of us good days and bad days and as we’re always looking for ways to improve our craft we’re moving forward.
We can also assume your commission level is within 5 to 10 points between IMO’s. That subtle of a difference isn’t going to make any significant impact on your bottom line. If we stop right there and only compare one IMO’s lead cost to another we are missing the point.
Incorporating those elements determining actual “lead cost” comes down to two factors: mentorship and goals. A good mentor comes from a place of experience. They’ve been where you are now. They freely pass along advice, it’s your decision whether to heed that advice or not. Experience has taught me to listen.
Your goals are where the rubber meets the road in determining actual lead cost. Let’s work backward and say your goal is to net $10,000 a month in income and your average sale is $1,000 AP, average comp is 100%. Legacy Agents are averaging $1,353 in AP in either Final Expense or Mortgage Protection. A good rule of thumb on marketing is 25% of total income. Therefore, to net $10,000 in premium we need to do $12,500 in actual income. $2,500 is our marketing budget (10,000 x .25 = 2,500; 2,500 + 10,000 = 12,500) or $625 a week.
The advertised lead cost is irrelevant. It comes down to knowing your area and your skill set. Meaning whether you spend $7 per lead or $70 doesn’t matter, directmail or internet leads, aged or fresh doesn’t matter.
It’s about consistency and your skills. Just keep the 25% in marketing cost the same regardless of the type of lead you work. That includes referrals...where you spend that money is the only difference. It should be in social media advertising, website, business cards, flyers, etc.
When generating referrals for leads it’s about establishing creditability. The further away the relationship a referral is from your existing client the more important this becomes. Close family members of a client as well as your personal close family and friends are some of the best referrals you can obtain. The existing relationship with your client, family and friends is your credibility.
Having internet searchable elements to your business is a great way to add credibility. Agents that have a web presence are more likely to acquire leads then those that just pick up the phone and call or door knock a referral. Having these programs in place will also open other opportunities to do paid advertising to generate leads down the road.
© Copyright Legacy Secure on MI Inc