Consumers are price-shopping insurance policies online in record numbers. According to 2017 JD Power research, the importance of price has surpassed that of a good past service experience when a shopper considers or quotes a brand.
Though increasing price commoditization presents an enormous challenge for insurance agencies, our newest sales lead response research provides some hope. With so many insurance organizations falling short on sales lead response best practices, there is a major opportunity for agencies, regardless of size or type, to stand out from the competition and win new policyholders.
The Impact of a Winning First Impression
The first impression an agency gives a potential customer is very important – not only how quickly they follow up, but also what they say. Most potential customers see this first interaction as a leading indicator of a longer-term relationship with the agency.
Effective follow-up that is timely, appropriately persistent, with a message that adds value for the recipient can increase the chance of conversion. Research shows that:
- Calling a lead within one minute of an inquiry more than doubles conversion rates.
- Leads who are left two voicemails on six missed calls are 34% more likely to convert than leads who don’t receive any voicemails at all.
Insurance agencies may be under the impression that their contact strategies and specifically their lead response efforts are timely and effective, but Velocify analysis of actual calls, voicemails and emails shows that, for many of them, sales response tactics are more likely to be in need of an overhaul.
See also: 3 Great Apps for Insurance Agents
Here are some pro tips to help improve call and voicemail performance shortcomings identified in the Sales Lead Response: The Ugly Truth Behind Call, Voicemail, and Email Practices study.
Call and Voicemail Timing and Cadence
While there is no optimal, magic time of day to make a call, following up quickly and then at strategic intervals can improve outcomes. Our analysis showed that sales professionals are often miscalculating when it comes to the most effective communication cadence — the right number and timing of phone calls and voicemails.
Calling a lead within one minute of an inquiry more than doubles conversion rates, but only 7% of the prospects in the study received a call within one minute. Almost half of all prospects submitted didn’t even receive a voicemail. Of those who did, 40% received only one voicemail, and 34% received too many. One prospect even received 10 voicemails.
PRO TIP: Velocify’s six-call strategy suggests leaving a voicemail on the second and fourth call attempt. Leaving the first voicemail on the second call results in a 31% higher conversion rate than leaving that voicemail on any other call.
It’s important to weave voicemails into a company’s call strategy because missed calls can go unnoticed, and a voicemail is a good way to get a prospect’s attention. However, producers need to make sure to strike the right balance because research shows leaving too many voicemails before contact, as many as five or more, can actually be worse than not leaving any voicemails.
The Impact of Message Quality
Voicemail frequency can increase the chance of conversion, but agencies need to leave quality messages to maximize callbacks. Accordingly, the study evaluated voicemail quality on five basic criteria: context; clarity; length; personalization; and tone.
Only 18% of prospects received “good” voicemails that included all five. Almost half (46%) of all voicemails were scored “bad to terrible,” meeting three of the five criteria or fewer. On the opposite end of the continuum, 8% of the voicemails received didn’t even meet one of the five criteria.
See also: How Life Insurance Agents Can Be Ready
More Effective Phone Skills, Powered by the Right Tech Tools
Insurers can avoid inadvertently throwing money away by responding appropriately and learning how to more effectively maximize every prospect interaction. There are a number of technologies and techniques available that help improve process so agencies can more easily and effectively make a better first impression.
Which is the better marketing strategy? Buying a higher volume of low-quality leads or a lower volume of more expensive leads?
Purchased leads have an image problem in the insurance industry. Yes, they can be expensive. But instead of being viewed as premium, purchased leads are often associated with mediocre quality. In fact, 84% of lead buyers say that lead quality is something lead providers need to improve the most.
Low-quality leads can mean wasted sales rep time and decreased productivity, as well as lower close rates. But is the amount of skepticism around the quality of purchased leads really warranted?
Contrary to popular wisdom, successful insurers and other organizations tell us that purchased leads can and do yield favorable results. Velocify’s newest study, “Lead Trends Report” found that high-growth companies (those with 20%+ annual growth) are relying more heavily on purchased leads than any other lead source. In fact, purchased leads account for a higher percentage of total volume for high-growth companies, regardless of company size.
Not only do fast-growing companies have a higher percentage of purchased leads compared to flat or slower growth companies, they are also less reliant on referral and direct mail leads.
The discussion of third-party marketing partners and leads is especially pertinent in insurance given that most prospects (89%) who submit leads to third-party insurance sites do not visit a brand site beforehand. This path to purchase can make third-party leads a valuable option for capturing new, in-market shoppers who aren’t likely to visit an insurer’s site.
You Get What You Pay For
But why are high-growth companies more successful with purchased leads than companies experiencing less growth? The major difference is that fast-growing companies are more willing to invest more per lead to get high quality than are most other companies. The average spend reported by lead buyers was $42 per lead, but companies with significant revenue growth spend $86 per lead.
Another difference is that high-growth companies regularly and frequently re-assess the performance of their lead sources. The study found that high-growth companies are 125% more likely than flat/declining companies to evaluate new lead providers at least quarterly. Regular performance evaluations indicate disciplined processes for measuring lead source KPIs and a willingness to change up their marketing program to optimize performance.
In contrast, some flat or declining businesses even go a few years without evaluating new lead providers—a practice not reported by high-growth companies.
Before increasing your investment in purchased insurance leads, be sure you are ready to follow these best practices:
- Follow up as soon as you get the lead. Ensure you have a way to automate lead capture into a lead management system that can distribute the leads within seconds to an available rep. Speed is critical when responding to purchased leads. The Ultimate Guide to Inquiry Response shows that conversion rates more than double when leads are called in under one minute.
- Be persistent. Process and strategy are equally as important to success as speed-to-contact. Make sure you are not only following up fast, but also persisting beyond the first few contact attempts with multiple channels of communication.
- Prepare for duplicate leads. Understand the policy for duplicate leads going into a relationship with a new lead provider and have a way to report back to your lead provider when you receive duplicates.
- Frequently monitor key performance indicators (KPIs). Take time each day, or at least each week, to better understand the quality of leads you are purchasing. Track KPIs like contact rate, qualification rate, and conversion rate and adjust your spend accordingly.
- Meet regularly with lead providers. Keep an open dialogue with lead providers by meeting monthly, or at least quarterly, so you can tweak your program to meet lead generation needs.
See also: The Insurance Model in 2035?
Clearly, purchased leads can be a more impactful part of your customer acquisition program than conventional wisdom would suggest. The key is to invest in higher-quality lead sources like hot transfers, exclusive leads, and leads that are scored or qualified in other ways for quality. Though generating a high volume of leads from free (or near free) lead sources like referral and web channels is a good strategy, our findings show the value of purchased leads cannot be ignored.