How to survive your first 12 months in Final Expense: Leads (Part 2)

Over the last few years I have had dozens of agents contact me about coming to work with my agency.  During the interview, there is one question I always ask, "What are you looking for HERE that you don't have in your current situation?"  9 times out of 10, the agents respond with : LEADS, TRAINING, OR COMMISSION.  In this section we are going to talk about leads.

Leads... everybody want them, but nobody wants to buy them.  Let me make one things clear, AGENTS ALWAYS PAY FOR THEIR LEADS! Either you pay for them with your own money or you pay with a lower contract.  For example, if you are on a large contract 100%+, chances are your leads are YOUR responsibility. If you are on a lower contract 95% or less, you should have a manager or IMO helping you with your leads.

Direct mail leads are the most common source of leads for final expense sales.  Leads come from direct mail campaigns that are sent out to thousands of prospects. The prospects who are interested reply to the advertisement by requesting information and sending the lead card back to the agent. The agent receives the lead, visits the prospect, and makes the sale.

Pay per thousand leads
Agents typically pay per thousand cards mailed. For example, XYZ Lead Co charges $425 per 1,000 leads dropped (mailed). If only one person replies to the mailer, the cost of that one lead was $425.  If 10 people reply, the cost would be $42.50 per lead. As you can see the more prospects who reply, the cheaper the leads cost. 

Response rates
Response rate for direct mail leads vary from state to state and area to area.  You should expect to get a .75%-2% response on your mailers.  I have personally seen responses as high as 8% but this is a rare. There are several factors that will determine a lead mailing response. Frequency of drops, style/copy of lead, demographics of area, time of year, holidays, and frequency of competing companies’ drops are several factors that will increase or decrease the number of people who respond to a lead.


 Pay per lead
There is another system of direct mail leads that may be more appealing to new agents because of the reduced risk.  In areas that have low response rates, agents should consider buying leads through a company that charges per lead instead of per thousand.  

Set prices per lead prices will vary. You should expect to pay $20-$30 per exclusive leads and $3-$5 for shared or aged leads. Exclusive leads are only sold to one agent while shared leads are sold to multiple agents.  If you are buying an aged leads are often called ‘Class B’ leads and that means they were purchased and worked by 1-5 agents who didn’t get the sale.  You can buy the worked leads at a discount price.

Class B leads are great for new agents to practice with. Don’t be fooled by the low price. They are sellable but you have to work more leads to get the sale.  Just because one agent didn’t sell it, doesn’t mean you can’t.  These leads are valuable and they are very inexpensive.

There are still a few companies that offer set price leads but as response rates decrease, more and more of these companies are changing the way they do business. Many are switching to price per thousand because they aren’t getting a big enough return to make money.

Nervous about leads?  Don't worry, you can always knock houses door to door.  You can always work with lists as well.  Prospect list can be organized into walk sequence or even printed on actually lead cards.  The best part is you can probably gets these lists for free.  If you would like tips on how to maximize lead drops or lead how to better work your leads, check out our training program.