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Pros and Cons of Buying Auto Insurance Leads

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Fran Majidi April 22, 2019
buying car insurance leads

Buying auto insurance leads is no longer considered an option, it is now a necessity. The fact is that most agents, even larger agencies, cannot compete with the volume of auto insurance leads that lead generation companies offer. Let's face it: Buying auto insurance leads is required if you want to consistently have a promising sales pipeline.

Not all leads companies are equal and neither is the quality of their leads. The best lead vendors have a wide internet presence because they dominate the search engines like Google, Yahoo and Bing. People gravitate towards their marketing strategy and seek their insurance services. This does not mean that you should not have a presence of your own on social media, on the radio and even in print, if you can afford it. 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, so it’s not surprising that some businesses are specializing in bringing leads to your doorstep.

Insurance agents have been hunting down leads for decades, so it's not surprising that some businesses 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 and end up with a stronger return:

Pros of Buying Auto Insurance Internet Leads

The Insurance Lead Source Matters

If your lead company is generating ads through pay-per-click 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.

Publishing Partners Are Okay

If the lead vendor you’re buying from says they get leads from multiple proprietary sites, that’s a good sign too.

Your leads generation company may work with affiliate partners to bring in large numbers of leads. Many lead buyers often stress that they only want organic leads, but these types of third-party generated leads can often be rich too. If the lead vendor you're buying from says they get leads from multiple proprietary sites, that's a good sign too.

Rich Data

If your vendor is generating insurance leads from Facebook contests, you may be better off finding another lead generation company.

A good lead company will have lots of relevant information on the prospect, which helps you figure out what products to sell to that shopper. SmartFinancial, for instance, compiles relevant information by having the insurance leads fill out a form. If your vendor is generating insurance leads from Facebook contests, you may be better off finding another lead generation company.

Credits on Auto Insurance Leads

A good lead generation company will have a generous credit history because they recognize that bogus leads do fall into the mix, especially with high lead volume. These insurance leads should be exchanged for good ones. If they do not have a credit history in place, you may be better off not working with them.

See What Customers Have to Say

A good lead company will have more positive reviews than bad ones. Every business gets bad reviews now and then but if the majority of agents seem happy using the vendor, you're probably not dealing with a legitimate company.

Geographic Filters

Your lead company should be able to bring clients to you from a specific geographic area that you can do business in. Even though you may get the occasional prospect that does not live in the areas you've mapped out, this should not happen often.

Lead Volume

You can control the volume of leads when using a lead generation company, based on how high you bid.

You can control the volume of leads when using a lead generation company, based on how high you bid. 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.

Shared Leads

With shared leads, a good lead company will have a good lead-to-agent ratio of 4 or fewer agents per lead.

Risk Profile

You can place filters on the leads you search for, which helps control the quality of the lead or risk profile based on what you can sell. 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).

Special Pricing

If you begin working regularly with your lead vendor, 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.

Customer Service

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.

Lead Price

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 so your chances of closing a sale are lower with shared leads.

Exclusivity

If you don't want any competition, buy exclusive leads, which your lead company will not share with other agents. Better yet, get live transfer calls if you want guaranteed contact with auto insurance leads. Remember that shoppers want to compare auto insurance quotes so you will want to offer one right away. Hopefully, you have competitive rates.

Call Centers

SmartFinancial has call center concierges located in most cities across the United States. Not all lead companies offer U.S based agents who transfer calls from insurance customers after qualifying their information. Making first contact has never been easier! These calls are pricey, but everyone in the auto insurance business knows they are well worth the cost.

Cons of Buying Auto Insurance Internet Leads

So Many Auto Insurance Lead Providers

It can be confusing choosing amongst various lead generation companies. One colleague raves about a vendor's insurance services while another says they are the pits. There are reasons why this happens. For instance, 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 or home insurance may not be as strong in the area of life insurance. Nextgen leads, like SmartFinancial leads, cover auto, home, health, commercial and more.

Another reason why agents have varying degrees with a particular lead generation company is that auto insurers have specific requirements so one agent may write lots of business with a vendor's insurance leads while another with stricter underwriting requirements may not have as much luck.

Even still, a less valuable insurance lead beats cold calling, right? If you're not sure, compare closing rates with both.

Finding the Right Fit

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 the lead vendor's BBB ratings then try a few different companies and judge according to your successes over the course of several months. You'll find that one company will serve your needs better than another.

Set Realistic Expectations

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 the leads if they want to bundle with home insurance for a discount!

Find a Comfortable Budget

You have to pay for leads, even though it'll still be cheaper than if you did your own insurance marketing, wrote your own blogs, created your own videos and managed social media and affiliate publishers. Leads are not cheap, unless you buy in bulk, which is not a bad idea if you want to save money.

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 for several consecutive months.

Returning Bogus Auto Insurance Leads

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.

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. Most agents still find ways to make a sale.

Cross Selling Opportunities with Auto Insurance Leads

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

If you're ready to meet insurance buyers today, put SmartFinancial on your list of lead vendors to test out. You will be paired with one account manager for the life of your account. Together, you will see progress and growth!