There are about a half-dozen local insurance agents that perpetually send introductory mail to my home. Stereotypically a tri-folded flier with an agent head-shot, I always appreciate the unique strokes of style within each agent’s unique pitch. Although most consumers will effortlessly dismiss the letter as “junk mail”, we can all appreciate the intensive planning, coordination, and investment it takes to make any marketing campaign a reality. But any marketing mix involves optimizing programs that work, and I wonder if agents that send direct mail to my house are truly analyzing the performance and ROI on their traditional campaigns.

AgentInsider’s online lead generation program enables agents to quickly measure performance and react with flexibility — unlike any traditional insurance marketing program. If a particular ZIP code is generating more mutli-line policies, the agent can instantly increase his/her lead volume in that area, perhaps shifting away from an underperforming ZIP code. Agents have stated that their close rates from AgentInsider™ leads average between 8% and 12%. We have demonstrated in a previous article that at 10% (closing one-in-ten leads), an agent could yield a 375% ROI. In contrast, the same investment in direct mail yields a much lower return: 90% in our example — even with an exceptional response rate (1%) and close rate (50%). With the same marketing budget, our example shows that an agent could generate 250 AgentInsider™ leads ($8/lead) compared to a direct mail campaign’s 12 ($166/lead).

The $2,000 Challenge Direct Mail Budget: $2000 Cost: $0.60/each Letters: 1,200 Response (1%): 12 leads Close rate (50%): 6 policies 3-Year Revenue: $1,800 Cost per lead: $166 Cost per policy: $333 3-Year ROI: 90% Internet Leads Budget: $2000 Cost: $8.00 Leads: 250 Close rate (10%): 25 policies 3-Year Revenue: $7,500 Cost per policy: $80 3-Year ROI: 375% 3-Year Revenue based on $1,000 premium with a 12% 1st year commission and 9% for the 2nd and 3rd year renewals.

Disregarding traditional marketing's substantial investment and modest response rate, I believe agents value campaigns like direct mail because the consumer is responding to them. Although this is a hard earned benefit, such a wait-and-see approach is probably better suited for walk-ins and referrals. Internet leads are exactly the opposite. They turn the onus of response rate inside-out since the consumer already did his/her part by submitting the lead. Internet leads are hard work though, and successfully working 250 leads instead of 12 is a challenge that requires the agent to be proactive and steadfast.

Like prospective customers that literally walk into your office, Internet leads demand the same resolute attention. No agent in their right mind would simply hand this prospect a business card and casually follow-up a week later. Likewise, as soon as an Internet lead is received, it is vital to your success that you contact that consumer immediately and provide him/her with a competitive quote along with quality service. If you are unable to immediately generate the quote, you could save a sale by simply informing the consumer that you will follow-up shortly. Although AgentInsider™ cannot guarantee that every online consumer is going to immediately purchase insurance, we do know that they are motivated and looking for competitive quotes.

Internet leads can be hard work, but agents willing to put in the time to manage and close the leads will find that the economics easily favor Internet leads over other traditional acquisition sources. The cost of following-up on an Internet lead is substantially less expensive than the cost of actually acquiring the lead. Your path to success may not lay in marketing harder, but in marketing smarter—with AgentInsider™.