My business partner, Reda, and I met while networking in Dallas. We were both highly motivated and building careers in the final expense vertical, so we compared our numbers and discovered that Reda was making more sales than I was, despite the fact that I was making more money than he was.
As it turned out, Reda had a knack for reaching customers, and I had a knack for knowing which customers were worth the investment. He was generating an impressive amount of business but spending too much money on leads. Conversely, I had far fewer leads but a higher conversion rate.
High-quality leads boil down to a mathematical formula in which your customers' lifetime value justifies their cost per acquisition. Combining our talents enabled us to achieve the best of both worlds and scale exponentially.
Improve the quality of your leads with pay-per-call and data leads
The lowest-quality leads are those that go unvetted. For example, I see many insurance agents rely on pay-per-click advertising rather than pay-per-call. I'll admit that in e-commerce, pay-per-click provides powerful results, but in many verticals of the insurance space, leads acquired through pay-per-call are much higher-quality. After all, which customers have a higher conversion rate — the ones who find your sales funnel through a click or the ones vetted through human interaction?
When you acquire leads through telesales, you know a conversation has affirmed interest. This vetting decreases the cost of acquisition by increasing your ratio of high-value prospects.
When using internet ads, data leads allow you to reach out through online forms. This allows agents to vet contacts based on useful data points and contact clients they know are worth their time. Agents selling home insurance, for example, can include space on the form to ask prospects if they live in single-family homes, apartments or duplexes. Contacting prospects who offer the highest lifetime value means you're getting the most out of your acquisition costs.
Improve the quality of your leads with targeted outreach
Anyone can generate content and splash it across the internet. And at times, that haphazard marketing can result in a decent amount of web traffic. Still, the bottom line is that if those prospects do not convert into customers, you've wasted your time, effort and money.
To increase the quality of your leads, target the audiences you know are already interested in your products and services. To accomplish this, craft your messaging and offers specifically to reach leads who are more likely to convert into paying customers.
The insurance space involves a wide range of verticals, each of which has a different audience. To increase your conversion rate, learn everything you can about your target audience and where you can reach them with your marketing.
See also: "Intelligent Decision-Making" Is the Future
Improve the quality of your leads by considering each customer's lifetime value
Improving the quality of your leads involves more than just lowering customer acquisition costs. You can also enhance the quality of your leads by increasing their lifetime value. One way to do this is by attracting customers with a low-barrier offer, learning more about their needs, then offering other services or products that will benefit them.
For example, auto insurance is a low-ticket product, meaning you must sell a high volume to make a profit. The lower your commission, the less you can spend on each lead. Because of this, auto insurance agents often lack the cash flow to acquire their first leads. Many start with referrals from friends and family or attract new customers with an enticing, low-cost offer before cross-selling other products to generate the cash flow they need.
Another way to increase the lifetime value of your customers is to take advantage of back-end monetization through other business opportunities. Your customer base is a valuable resource. Agents in other insurance verticals and people in other industries would benefit from access to your clients, and you would benefit from access to theirs. Networking with a non-competing company can be a win-win.
For instance, if you sell life insurance, your clients are often in the market for retirement planning, wealth management and tax deferral strategy. You probably already know financial advisers and accountants who offer these services, but perhaps have yet to realize how much you could help each other. If you team up to send each other referrals, or host a joint webinar to cross-pollinate your audiences, you can grow both your companies at once.
As you generate leads, remember that quality trumps quantity. Your number of leads is far less important than your cost of acquisition and the lifetime value of those leads. Success in the insurance industry is about working smarter — not harder. Learn the math that allows you to take on quality leads by either decreasing your customer acquisition cost or increasing your customers' lifetime value.
