Why Cheap Life Insurance Leads Are Hard to Find
If you’re an insurance agent or representing an insurance company you are probably always on the lookout for new prospects and leads. In the world of insurance it is a normal procedure to look for leads everywhere and you’re even hiring outside companies to help you find enough prospects for you to call or contact in whatever way possible. The first choice will also be to find cheap life insurance leads of high quality. In other terms it is all about finding people that are looking to buy a life insurance policy without you having to pay much (if anything) for them. If you have been in the life insurance business for some time you’ll probably already know that it is very rare to find a combination of high quality and low cost. Agents or companies selling high quality prospects often know what they should cost and leads like that are not cheap.
Instead of focusing on finding these potential customers at low cost it would be wiser to look for someone that you will profit from selling life insurance to. The best way to figure out what you can pay for these leads is to first make sure you know how much you will make in profit from an average life insurance signup. Most people will not change life insurance that often so you will need to figure out what you will make in total profits on average in the total period that you have the average customer. Now I keep using the word “average” because some clients will not be with you for that long while others will stay with your company for many years.
The profit margin will vary from company to company but to use as an example I’ll pretend that an average life insurance lead that becomes a customer will make you about $2500 in total profits over time. Now this number might be different in your situation so you’ll need to adjust to fit your situation. If a life insurance customer will make you $2500 in profit will this mean that you can spend $2500 to get a lead? No! In most cases you’ll not be able to signup everyone you call or meet so you’ll need to factor in how many leads you’ll have to contact to get one customer. If you need to take to 10 leads you’re only able to pay a maximum of $250 per life insurance lead and if you did that would only be a break even situation and you’re in this to make money so that would not be a great result.
If you’re better than 1/10 you’re able to pay more for one lead and if you need to talk to 20 you’ll have to find leads that are cheap enough for you to make a profit. But since the whole point of this article has been to talk about cheap life insurance leads I am going to ask you this question:
If you are able to make a sale to one person out of ten and your total profit from a sale will equal $2.500, would you consider a price per lead of $100 to be cheap?
I know I would! If I were able to generate profits of $250 per lead I spoke to and I were able to buy them for $100 a piece I would buy as many as I could possibly have time to contact. Every single time I had spoken to a life insurance lead I would make $150 in profits. I hope you see the point in this because I don’t know how else to explain it to you. So even though paying $100 for a potential customer that would still be a good deal. So finding cheap life insurance leads might not be as hard as you had imagined but it is how you look at it (and your statistics) that determine whether it will be cheap or not.