For years, many long-time insurance agents have relied on referrals as their primary method for earning new business. It’s a simple, cost-effective formula: you provide great service to your customers, show up in your community, and reap the benefits over time whenever someone in your network is looking for a new auto insurance policy.
But sometimes, even the most established agents need to find new prospects outside their immediate referral networks—particularly during hard markets that make new customers more difficult to come by. If you’ve been in the game for a while, you might be used to using newspaper ads, postcards, and other local advertising tools whenever your business needs a boost.
Certainly, traditional marketing tactics like direct mail are great for making the general public aware of your agency and your value proposition. But your efforts will be far more effective when you pair them with a tool that allows you to identify and connect with the smaller group of consumers who are currently shopping for insurance. And that’s where online leads come in.
Direct mail is a great tool for building awareness—but agents need complementary tactics to maximize sales
To understand how postcards and leads work in tandem, it’s useful to think about where each of these tactics fit in the “marketing funnel.”
If you’re unfamiliar, the marketing funnel is a concept that describes the path consumers take toward purchasing your product. Over the course of progressing through your funnel, your customers become aware that you exist, consider your product against your competitors, and finally make the decision to purchase an insurance policy from you.
Here’s a visual representation of the funnel, with consumers entering at the top of the funnel as they reach awareness and exiting the bottom of the funnel after they make a purchase.
In this context, direct mail, newspaper ads, and highway billboards are all tactics best suited for the top of the funnel. They bring new prospects into your funnel by building awareness of your agency among a large number of people who see your messaging. And when it’s time for them to shop for insurance, they’ll be more likely to make your agency one of the choices they consider.
However, the consumers you’re reaching via these tactics are not guaranteed to be shopping for insurance—in fact, the overwhelming majority of them will not be. And even when they do shop for insurance, they’re not necessarily more likely than the average person to be a good fit for your agency. After all, you have no way of knowing what kind of car they drive, whether they’re a homeowner, what their driving record looks like—or any of the other details you might consider when deciding whether your rates will be competitive with a given consumer. That’s why you can expect to hear back from just 0.5% to 2% of the people you send direct mail to.
In short, you need a marketing tool that helps you move the consumer from the awareness and consideration phases to the finish line of purchasing a policy from you. In other words, you need a solution for the bottom of the funnel.
Online leads help you find and convert consumers who you know are shopping for insurance
If you’re unfamiliar, an online lead is the contact information and demographic details of a consumer who has filled out a quote form while shopping for insurance online. You can then use this information to call, text, and email the consumer with an offer for the policy that works best for them.
Whereas the people on your mailing list or reading a newspaper could be anyone, the consumers you reach when you purchase online leads have already indicated that they are interested in receiving an insurance quote. In other words, you’re reaching them at the bottom of the marketing funnel, where they are considering their options and getting ready to make a purchase. We call these consumers “high-intent” shoppers, since they’ve demonstrated their intention to buy a policy.
In addition to the fact that these shoppers are in-market, leads provide you with important information you can use to offer the consumer the right policy. For instance, you’ll learn about their driving history, the kind of car they drive, whether they’re a homeowner, and how many cars they drive. In fact, when you use a platform like MediaAlpha for Agents, you can even use our targeting features to hone in on the shoppers who are right for your agency—for instance, those who have never been in an accident.
Because our leads connect you with in-market shoppers at the very bottom of the funnel, they convert at a rate of about 4%. That’s considerably higher than the 0.5%-2% of shoppers you might expect to buy a policy after seeing your postcard in the mail.
For best results, pair traditional marketing tactics with online leads
Ultimately, the question of purchasing online leads or sending direct mail should not be an either/or situation for insurance agents. Rather, you’ll enjoy the best results by using these two valuable tactics in tandem.
For instance, your direct mail investments can help you build awareness among consumers who might not have heard of your agency, or might not already have your carrier or carriers among their top choices. Then, when those consumers begin looking for a new policy, you’ll be able to use online leads to connect with them and provide the right options.