Let’s Talk Leads: “Free” vs. Purchased vs. Generated

As insurance agents, we depend on leads to help grow our business. Yet all leads are not created equally. In fact, some leads can be detrimental to your business if not properly acquired or contacted. Today’s article breaks down the types of leads Medicare insurance agents often hear about or try to acquire and provides insights & recommendations for each lead type.

Free Leads

Many FMOs promote “free leads” to newly contracted agents. What that FMO or NMO partner is likely doing, however, is buying leads en masse in order to distribute a small portion of the available pool to downline agents on a newly-contracted, monthly or annual basis. The quality of such leads is usually questionable for understandable reasons. After all, if these leads are so fantastic, why haven’t the prospects been contacted and sold to already? The reality is that these leads truly belong in the “Purchased” category and are usually old or cold, neither of which is good. The bottom line is buyer beware: there’s no such thing as free leads!

Purchased Leads

Buying leads is a tempting proposition for many agents. This alternate approach to prospecting forgoes investing in events, marketing and brand building in order to allocate those dollars upfront into purchasing lists of people who’ve already expressed interest in the product. While this may appear to be a legitimate tactic for reaching Medicare-eligible prospects, there are a couple significant obstacles of which agents should be aware. First, it’s extremely difficult to gauge the quality of the lead: how old is it? How many times has it been distributed? Did the prospect express interest in this line of insurance specifically or was the lead derived from a different list? These and many other questions abound and are difficult to answer without heavily investing both time and money to find out.

The second issue at hand pertains to Centers for Medicare & Medicaid Services (CMS) compliance guidelines. There’s no real way to verify if a lead was compliantly received. As an example, a lead company could use uncompliant language like “Free Medicare!” in their ads to get people to respond and, if this is found to be the case, the insurance agent’s license status could be on the line. In short, the insurance agent is responsible for how their leads are obtained and bear responsibility for any compliance infractions, not the company selling the leads.

Generated Leads

“Organic leads” or “produced leads” are interchangeable terms for generated leads. Call them what you will, these leads stem from an agent’s marketing and networking efforts. It’s no surprise we consider these leads ideal and there are several reasons why, foremost being that generated leads are most likely to convert to sales and help grow an agent’s brand within the community. And – when the marketing methods & materials used are checked against CMS guidelines – agents can proceed with the sale confidently knowing that their leads were compliantly obtained.

While generated leads are certainly optimal, there can be a time and place for purchasing leads; agents just have to be extremely careful and attentive when doing so. Purchasing leads may be a good way to ensure new business comes in as agents invest resources into new marketing efforts. For example, if an agent were to pursue establishing an effective business-to-business network which requires a significant time investment, they may want to supplement current marketing efforts that require time with purchased leads as an interim measure. With that said, in the event an agent can acquire a source that produces both compliant and quality leads, the leads are likely costly. And when leads like this cost $100 or more each, agents then have to conduct a thorough ROI (return on investment) analysis.

In summary, we’ve established that “free” leads really don’t exist and that generated leads are far superior to purchased leads for obvious reasons. There might be occasions when purchased leads can fill a gap in an agent’s lead pipeline, however such a source likely requires significant investment and must be approached carefully to ensure the leads are of good quality and compliantly obtained. There are literally dozens and dozens of ways agents can generate quality, compliant leads organically, and we recommend these efforts first and foremost. We believe in the old adage: “Give a man a fish he eats for a day. Teach him to fish and he eats for a lifetime!”

As a National Marketing Organization that works with thousands of independent agents, we understand you must generate leads in order to grow your business. That’s why we work diligently to provide the resources necessary for successful marketing. If this information is valuable and you want to know more about the services we provide our Medicare agent partners, please contact us at marketing@berwickinsurance.com or 888-745-2320.

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