Can Your Lead Generation Strategy Scale with Your Agency?
As agencies grow, they face a lead-generation conundrum. On the one hand, they need enough leads to fuel growth and keep the sales pipeline full. On the other hand, they don’t want to pay for more leads than they can use, or worse, pay for leads they can never get in contact with. You need a lead-generation strategy that can scale with your agency.
You Need Leads to Succeed
Insurance agents have an impressive income potential, but fierce competition means that some agencies never reach that potential.
According to IBISWorld, there are 415,446 insurance brokers and agencies businesses in the U.S. In 2022, the business growth rate was 0.2%. That’s a lot of agencies, and not all of them will make it. According to Insurance Journal, the failure rate for new agents is high – around 50% to 70% or 80%, depending on the estimate you use.
Agents face many challenges. One of the biggest challenges for both new and established agents is finding a steady stream of leads. You can’t make sales without prospects, and you can’t find prospects without leads. As your agency grows, you’ll need to increase the number of leads to sustain that growth, but not all leads are equal.
Bad Leads May Be Stunting Your Growth
In the never-ending search for leads, some agents fall into the trap of quantity over quality. They buy cold leads and shared leads because these leads can be cheap – at least, they can seem cheap at first glance.
Money isn’t the only resource you need to think about. Your time is also valuable, and it’s limited. If you waste your time chasing bad leads, you won’t have enough time left to grow your business. When the whole point of buying leads is so that you can scale your business, this approach is counterproductive.
Controlling Your Cost per Acquisition
If you want to grow your agency, you can’t afford to waste all of your time on bad leads. At the same time, you need to control your cost per acquisition.
Yes, you may have to pay more for quality leads, but expensive isn’t necessarily better. If the expensive leads have a low close rate, your cost per acquisition can surge. That’s no way to grow your agency.
Another problem occurs if you buy more leads than you can actually use. You have ambitious growth goals, and that’s great, but what’s not great is overestimating the number of leads you can chase. If each lead ends up taking more time than you expected, you might not be able to reach out to all of the leads before they grow cold. That can result in a lot of wasted money. Once again, your cost per acquisition skyrockets.
There's controlling your CPA, but what about retention rate?
A major problem with the insurance lead generation market in recent years has been the increase in lead reselling in an already oversaturated lead market. When you are buying cheaper, shared leads, chances are the lead you purchased has also been sold 3-5-10+ other times. In some cases, a shared lead's journey can result in over 50 different purchasers.
While CPA is a primary KPI for agencies to focus on, policy retention rate is a key KPI for ensuring the longevity of your business. By relying too heavily on cheaper, shared leads, you run the risk of your policy retention rate declining - and fast - due to your book of business being resold by other agencies. By shifting your lead generation strategies to focus more heavily on high-quality, exclusive leads, you are strengthening your book of business, and therefore, your future profits.
Paying Only for the Prospects You Speak With
Let’s say you have a list of the leads. The leads are supposed to be qualified and exclusive, so you just need to call them up and you should have a good chance of making the sale, right? Not quite. Actually connecting with prospects can be hard. Many people just don’t answer their phone anymore. According to Pew Research Center, 81% of Americans say they don’t generally answer their cellphone if they get a call from a number they don’t recognize.
So you have a long list of these leads that you paid top dollar for, but you can’t connect with most of them. To make matters worse, you end up spending a lot of time trying the numbers again and again, and that makes it harder to get through the list.
If this sounds familiar, you need a better strategy, one that can scale with your agency without the cost per acquisition getting out of control.
Inbound call generation is that strategy. The calls come to you, so you don’t have to worry about not being able to reach leads. You only pay for the leads when you actually speak to a prospect, so your cost per acquisition is kept under control. Best of all, this method is fully scalable, so you can increase your call volume as your agency grows.
Fuel Your Agency’s Growth
The insurance industry is competitive. If you want to rise to the top, you need a lead-generation partner that can fuel growth while keeping costs manageable. Digital Market Media uses proven lead-generation methods that can scale with your agency. If you’re ready to say goodbye to bad leads, contact us.
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