Pros and Cons of Buying Auto Insurance Leads

Fran Majidi
April 22, 2019
buying car insurance leads

Buying insurance leads is no longer considered an option, it is now a necessity. The fact is that agents and even larger agencies cannot compete with the volume and accuracy that many leads agencies can boast. Let’s face it: Buying leads is a necessary evil. With that said, not all leads companies are equal and neither are the quality of their leads. The best leads companies have a wide Internet presence because they are technologically on top of their game. This does not mean that you should not have a presence on the Internet, on the radio and even in print if you can. In fact, only after doing it yourself will you appreciate the time and money that goes into lead generation. Insurance agents have been hunting down leads for decades already but with the internet things have changed, so it’s not surprising that some companies are specializing in bringing leads to your doorstep. You will most likely buy leads at one point, so before you learn through trial and error, we’ve listed the pros and cons of buy auto insurance leads online These tips will help you make the most of your investment:

Pros

  1. If your lead company is generating ads through PPC programs like Google Adwords or from organic search results, the quality of the leads will likely be quite high with potential to yield lots of sales, unless they have keywords that do not align with your targets. SmartFinancial has the most targeted searches.
  2. Your leads generation company may work with affiliate partners to bring in large numbers of leads. Many leads buyers often stress that they only want organic leads, but these types of third-party generated leads can often be rich too. If the leads company you’re buying from says they get leads from multiple proprietary sites, that’s a good sign too.
  3. A good ad lead company will have lots of relevant information on the prospect, which helps you figure out what products to sell to that shopper.
  4. A good lead generation company will have a generous credit history because they recognize that bogus leads do fall into the mix and should be exchanged for a good one. If they do not have a credit history in place, you may be better off not working with them.
  5. A good lead company will have more positive reviews than bad ones. Everyone gets bad reviews but if the majority of agents seem happy using the source, you’re probably dealing with a legitimate company.
  6. Your lead company should be able to bring clients to you from a specific geographic area that you can do business in. Even though the occasional prospect that does not live in the areas you’ve mapped out, you can be sure that your leads are going to be in prime areas.
  7. You can control the volume of leads when using a lead generation company. It’s nice to use a lead company heavily during dry spells and then get a steady stream of leads or live transfer calls during busier seasons.
  8. With shared leads, a good lead company will have a good lead-to-agent ratio of 4 or 5 agents per lead.
  9. You can place filters on the leads you search for, which helps control the quality of the lead. With that said, you’re paying more per filter. The only way to know what works for you is by testing different filters and combinations of them (and no filter at all).
  10. If you begin working regularly with your lead company, ask for a volume price. They’ll probably be open to working with you for a good price on large numbers of leads. The more leads, the more chances at closing.
  11. The lead companies that seem interested in your success are the ones to work with, whether they offer advice and content suited to your career growth or if they have extensive training on how to make winning phone calls.
  12. If lead prices are too high, most lead companies will sell you shared leads at a much more affordable price. With that said, you’ll be competing with more agents on closing these deals so your chances of closing a sale are lower.
  13. If you don’t want any competition, buy exclusive leads, which your lead company will not share with other agents. Remember that shoppers want to compare auto insurance quotes so you will want to offer competitive rates.

Cons

  1. When trying to figure out who to buy leads from, you can easily get confused. One colleague raves about an agent’s service while another says they are the pits. And this happens with many leads companies. There are reasons why this happens. One reason is that the service may not be a good fit for a particular line of insurance or for a specific territory. For example, a lead generation company that has superior leads in auto insurance may not be as strong in the area of life insurance.
  2. Most agents do not give away their amazing leads source, especially if you live in near proximity to one another, so don’t rely too much on word-of-mouth if you’re looking for a reliable leads source. Check out their BBB ratings then try a few different companies and judge according to your success.
  3. If your close ratio is low with leads you generate, don’t expect a spike in closing rates because you bought them. Your numbers will likely be in the same ballpark, give or take a few, and in fact, your numbers may suffer if you don’t follow the leads company’s guidelines. These guidelines are in place for a reason: to get a sale from each lead, preferably with a cross-sell or even up-sell. Remember to ask if they want to bundle with home insurance!
  4. You have to pay for leads, even though it’ll still be cheaper than if you did your own marketing, wrote you own blogs, created your own videos and managed social media. Leads are not very cheap, unless you buy in bulk, which is not a bad idea if you want to do minimal work in creating your own leads generation system.
  5. You’ll have to spend some money before you know for sure if your leads company offers quality leads or really poor quality ones. You really won’t know for sure until you work with them.
  6. Bogus or fake leads will trickle in, even with the best leads companies. They just come with the territory. As long as the company you work with has a policy of crediting these, you should be fine.
  7. Even when you buy exclusive leads, sometimes other agents are biting on your bait because the prospect filled out forms for insurance on several websites.

Remember when selling auto insurance that homeowners insurance is just a step away: The best way into the garage is through the house!