In recent months, much has been made of the growth of warm transfer leads among auto insurance agents who are looking to acquire new customers—to the point that some in our industry have predicted the demise of traditional online insurance leads.
If you’re unfamiliar, an online insurance lead is generated when a consumer fills out an online form to request a quote for auto insurance. The form includes information about their driving history, their vehicle, and the contact details that agents can use to connect with them about the policies they sell. Then, lead providers share this information with agents who are interested in calling, emailing, and/or texting the consumer about the insurance products they have to offer.
By contrast, a warm transfer—also known as a call—occurs when a call provider does the work of reaching out to the consumer who has filled out a quote form. After asking qualifying questions to ensure the consumer is still looking for a policy, the provider will transfer the call to an agent so that they can speak with a live shopper who’s on the line. Typically, the call is transferred to the highest bidder, without consideration to whether the shopper has interest in connecting with a specific carrier or agent.
(For more on the difference between online leads and calls, check out our article on the subject.)
It’s true that warm transfers have become increasingly popular because they guarantee agents the opportunity to speak with a live shopper. By contrast, online leads always present the risk that the consumer will not respond to an agent’s call, text, or email. However, rumors of the lead’s demise have been greatly exaggerated. When we spoke with agents about the topic, we heard repeatedly that the cost effectiveness and flexibility of online insurance leads make them an essential part of any agency’s marketing mix.
Here are four reasons online auto insurance leads are far from dead:
1. Online leads often deliver a better return on investment than warm transfers
Results vary from agent to agent, but we’ve heard from plenty who see a stronger return on investment from their leads than they do from the warm transfer calls they buy. That’s because online leads are often far more cost effective.
For instance, let’s say you’re paying $80 per warm transfer, and you’re converting 20% of them into sales. In this hypothetical, your cost per sale is $400. But if you’re paying $10 per lead and you’re converting even 5% of them into sales, you’re going to have a far better cost per sale of $200.
In addition, a number of agents have expressed uncertainty as to whether they’re receiving the highest quality calls from providers. Others have wondered whether call centers might be incentivized to transfer as many consumers as possible—regardless of how interested each shopper is in purchasing a policy. The result is that you sometimes wind up paying a high price only to be connected with a confused consumer who doesn’t know why they were transferred and isn’t interested in a policy.
2. Leads offer a cost-effective way to build your prospect pipeline
While agents always want to close the deal with the leads they purchase as soon as possible, unsuccessful contacts can form the backbone of your prospect pipeline. If a consumer doesn’t respond to your call, text, or email right away—or if you connect with them and they’re not yet ready to buy—you can still convert these shoppers with a sustained outreach strategy over time.
In fact, some of our agents frequently sell policies to consumers whom they first contacted more than a year prior. The key is to create and execute a sustained pattern of contact, and to make sure you’re aware of when there will be changes that might enable you to offer the consumer a better rate. For instance, if you know a speeding ticket will come off a shopper’s record in two months, you’ll want to make a note to contact them right when you have a better price to show them.
While you usually receive the warm transfer’s contact information to call them a second time if you like, the cost of purchasing calls is such that it’s an inefficient way to build a large pipeline of contacts.
3. Leads are great for testing new audiences and training new employees
Because online leads are so affordable, they offer agents the flexibility for experimentation. For instance, you can use leads to test out whether you’ll be able to sell your insurance products to new audience segments or shoppers in areas you’re not already targeting. Similarly, leads are a great training ground for new auto insurance agents and producers who need experience cold-calling and selling your products to consumers.
Indeed, it probably doesn’t make sense to experiment with new audiences or producers when you’re paying $70 for each warm transfer.
4. Agents can’t get the volume they need without leads
Finally, most agencies simply cannot purchase enough warm transfers to generate enough new business to sustain their growth—unless they’re also adding a healthy portion of leads to the mix.
After all, there’s relatively few warm transfers available in the insurance marketplace, and they’re so expensive that most agencies can’t afford to buy too many of them even if they were available. That’s why any good lead generation operation requires agents to invest in leads to get the volume they need.
How do you feel about the future of online leads? Let us know in the poll below.
While warm transfers deliver the value of an immediate phone conversation, the agents we’ve spoken with have told us time and again that they still plan on making leads a big part of their customer acquisition strategies.
But we want to know how you feel, too. Let us know where you stand in the poll below.
Agents Lead Poll
If you have questions about online leads or transfers, our team of client success managers is more than happy to help. Simply reach out to your account manager to set up time to talk, or schedule a meeting to learn about our high-quality lead-buying platform on our website.