October 1, 2021

Lead Generation for Insurance Companies: Should Agents Buy Insurance Leads?

When it comes to insurance lead generation, quality will always trump quantity. On paper, having more leads makes sense. After all, the more leads you have, the higher your conversion rates. However, this couldn't be further from the truth. You could generate 12,000 insurance leads in a week, but if they don't have the intention nor the power to purchase your products, then they're a complete waste. On the other hand, you could generate only 1000 leads, and 800 of them convert. That's the power of quality leads!

Insurance lead generation takes a lot of preparation, an in-depth understanding of your target audience, and a lot of time. But what if the success of your insurance agency is highly dependent on getting leads at this moment? How do you get the leads you want without compromising on their quality? This is where buying insurance leads come into play. Here's the complete guide to buying leads and their effectiveness in the insurance industry. 

Is Buying Insurance Leads an Effective Lead Generation Strategy?

Yes.

The first few months of running an insurance agency are tough. You have to juggle between getting brand awareness, streamlining your internal operations, and making hiring decisions. This leaves you with little time to generate leads, and even if you had the time, organic leads take some time to start pouring in. Buying insurance leads is a great way of kicking off your marketing efforts. 

Keep in mind that there are bills and expenses to take care of. You'll need to generate income quickly, and at this time, your organic resources haven't gained the traction needed to supply you with enough leads. There's also a high chance that your sales are minimal, despite marketing your insurance agency aggressively. During your first year of operation, buying leads will definitely come in handy.

You should, however, note that this isn't a sustainable long-term strategy. You need to effectively turn your website and online marketing tools into lead generation tools. This way, they do most of the bulk work for you, and you only buy leads to supplement your sales. 

Where Can I Buy Insurance Leads?

Organic lead generation is often very difficult, and studies have revealed that 61% of marketers consider this as their top challenge. If this is your first time buying insurance leads, there are online vendors that can help you out. You simply provide them with information about your agency, the number of leads you'd like, and their geographical location. All you have to do is call them and convert them into customers. 

You can also partner with local lending officers and mortgage brokers. These are people who interact with your potential audience daily and are a great source of quality leads. They know clients who need insurance, and most of their leads are likely to convert. 

Key Tips for Buying Insurance Leads

When it comes to buying insurance leads, you need to make sure that they're of quality. Otherwise, most of them won't convert, and you'll have wasted your money. Here are practical tips you should consider.

Get Licensed in Multiple States

One of the factors that third-party vendors use to determine the cost per lead is your geo-targeting options.  They will charge you significantly more if they have to narrow down the leads to a particular state or town. 

If you get licensed in multiple states, you can easily negotiate to get a discount. You'll also get more leads from all over the country, increasing your conversion rates. This strategy is highly effective because most insurance agents are licensed in the state that they operate in. This then drives up the demand for leads and, ultimately, their cost. 

Buy Exclusive Leads

Exclusive leads are more profitable compared to non-exclusive ones. You'll be the only insurance agency with access to those particular leads. This will give you enough time to nurture the leads, increasing your chances of conversion. Studies have also shown that companies that nurture leads get 50% more leads that are ready to convert and at a 33% lower cost. 

On the other hand, buying shared leads means that you're not the only one with access to them. There's a high chance that the prospects are getting multiple calls a day from your competitors. By the time you reach out to them, they might be hostile and reluctant to hear you out. 

Don't Be Afraid to Take On High-Risk Leads

There are 2 main benefits associated with high-risk leads; they are highly profitable and very affordable. Due to the risks associated with them, few companies buy them. If you're, however, open to taking on the risk, they will result in high commissions and at a significantly lower cost. 

Buy the Leads in Bulk

Buying in bulk is a catch-22 situation. You're bringing the leads to make money, and on the other hand, you need money to buy them. Bulk buying is, however, more affordable and gives you access to more leads. If you don't have enough resources to buy a lot of leads on your own, you should partner up with other insurance agencies and split the costs. 

Be Realistic

Avoid viewing your bought leads as potential customers. This is simply data that helps you identify potential clients, so don't expect to begin making sales immediately. You should also try out different vendors to get a good sense of the quality of their leads before you settle on one. 

How Do You Determine the Quality of Your Leads?

The only way to test the quality of your bought leads is to simply test them. Some of the leads you get will probably be junk, but most of them should be legitimate. Most of the top vendors conduct lead filtering to ensure the leads you get are a good fit for your agency. They use factors such as;

  • How close the leads match your target audience.
  • Their geographical location.
  • The interest they have shown in similar businesses.

These types of custom filter options will likely increase your cost per lead, but the extra expense will be well worth it. 

Are All Lead Companies the Same?

No. 

Even though most lead generation companies have similar product offerings and claim to have extensive experience in the insurance industry, they are all unique. It's up to you to find a company that can fulfill the individual needs of your agency. 

One of the most critical factors you should use to determine a lead company's suitability is its specialization and expertise. There are companies that offer their services across the board; banking leads, insurance leads, real estate leads, etc. There are also companies that solely focus on the insurance industry. While the first lead generation company may have high-quality leads, the ones provided by the specialized lead company are highly likely to be more profitable. 

How to Convert Your Bought Insurance Leads

You've already bought your leads from a reliable vendor. Now what? The effectiveness of your bought leads is only as high as the effort you put into them. Assuming that they'll automatically convert without nurturing them is a recipe for failure. Treat the leads with a sense of urgency. Once you get them, your primary focus should be on reaching out to them. If one of the leads expresses interest, all your attention should be on them. The key to making a sale is being there when your customers need you most!  

Effective Ways of Nurturing Insurance Leads

You should focus on fostering and strengthening relationships with the leads at every stage of the funnel. This will create a sense of independence among them, making it easy for them to make the purchasing decision without much effort. 

Some of the most effective lead nurturing strategies include;

  • Using content marketing to build a loyal following and provide your leads with helpful information.
  • Using lead scoring to identify when prospects are ready to convert.
  • Leveraging SEO to drive website traffic.
  • Running ads to drive conversions.
  • Adopting omnichannel marketing techniques. 

Make sure you segment the leads based on their geographic location, stage in the sales funnel, and psychographics.

What Are the Top Insurance Lead Success Strategies?

Here are some of the best ways to increase your conversion rates.

  1. Assign the leads to your best agents: keep in mind that the leads have probably never heard of your company. Consider them as an investment and let your strongest agents nurture them through the sales funnel.
  2. Use a mix of strategies to reach out: don't restrict your conversion efforts to making calls. Consider a variety of contact options such as email, setting physical meetings, ads, etc., to find the most effective ones. 
  3. Use a CRM system: there are instances where a lead doesn't convert immediately. Not because they don't need your services but because the timing is wrong. A CRM system will keep you in touch with the lead until they're ready to make a purchase.
  4. Keep following up: dont give up on leads just because they didn't convert on the first try. Focus on nurturing them until they're ready to buy. 

The ultimate goal of running an insurance agency is making sales and being profitable. At first, this will prove challenging because you won't be generating a lot of leads, but you can solve this by buying leads from vendors. 

Are you looking for effective ways of optimizing your lead generation strategies? Streamline your insurance sales with InsurGrid today.

Charles is the co-founder and COO at InsurGrid. He has extensive experience at high growth tech startups. He's passionate about transforming outdated industries with technology.

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