(Photo of LeadsCon slide from “Aim Small, Miss Small” session by Eric Peschke)
Recently I attended a conference and sat in on a few sessions that I found to be very interesting. One of the speakers put this slide up and I had to laugh because I’ve had this exact conversation with some clients.
Every customer wants the best leads for the cheapest price. Many are willing to dig through large amounts of, well, just crap as long as the leads are cheap. They are fixated on the cost of the lead and not looking at the cost of the sale.
The speaker I was listening to was in home remodeling and roofing, so I’ll give a different example than what he shared.
Let’s say you use a very generic mailer that costs $540 per 1,000 to print and mail and that averages 2% response. It probably will not have any disclaimers that are required by different state insurance departments or by CMS. It probably won’t be approved by a carrier’s compliance team. And the language might be slightly misleading. But your per lead cost could be $27 per lead. If you convert 15%, your cost per sale would be $135.
Ok, now let’s compare it with a less generic piece. Language is more direct and not misleading. Appropriate state and/or CMS disclaimers are included. It might even have your name and phone number on it. Let’s estimate a 1.2% response. Your cost per lead would be $45 per lead. That’s terrible, right? WRONG. Most agents report that they convert at higher rates on leads that have less consumer objections. They don’t think it is from the government. It was clear you were going to contact them. So now, you might be converting at 30%… or higher. At a 30% conversion rate, your cost per sale is… $135.
You spent less time chasing people who didn’t know what the mailer was really about. Isn’t your time valuable? If you take int account your time, your cost per sale might even be less.
Obviously, these numbers are subjective. Conversion rates will vary, response rates vary by mailer. So, it’s also very important to monitor your marketing efforts. Track not only the responses that come in from mailings, but calls you get, digital responses you receive. Track the lead to appointment ratio and then the appointment to sale too. If your current CRM doesn’t track that, give us a call. Our CRM does! Stop digging through the giant pile of dinosaur dung… stop focusing on finding the cheapest leads. Track your leads down to the cost per sale, NOT cost per lead, and find out where your true success is coming from.
